CTO Point of View
These technology revolutions have also delivered significant economic growth. During the 19th century, the global economy grew eleven fold. But this was nothing in comparison to the exponential growth in ‘mankind’s muscle power’ when computing technology and the internet took hold. Between 1970 and 1990, the world economy expanded 37 times to reach a staggering $75 trillion in GDP, driven in large part by the ability of humans to compute and communicate large amounts of information at great speed.
We are now witnessing the emergence of an even more powerful force embodied by the digital age and the fourth industrial revolution. This is more than just one trend and technology. Rather, it is manifest in the interplay between technologies, from AI and Robotics to social media, mobility, pervasive computing, cloud, big data analytics, and the Internet of Things.
By 2050 it is estimated that there will be 50 billion devices connected to the Internet, creating a Hyperconnected age.
Going by past trends, each technological shift results in increased connections between people – and when people connect, economies grow. But the current shift is far more significant because the connections are between machines themselves as well as amongst humans and machines. These connections will enable the economy to grow at an even faster pace, to an estimated US $150-170 trillion in just over 30 years.
What is commonly known as AI or machine learning is at the heart of many of these advances, with its transformative impact becoming a mainstream topic at boardrooms across the world. It was a major theme at this year’s meeting of the World Economic Forum, for instance, placing it firmly on the agenda of business and policy leaders.
But while there is great interest in the nascent technology, there is no clear consensus about what AI is and how it will impact the world around us. At TCS, we take this as a sign of growing awareness and excitement, but also an indication of the need for further insights and discussion. After all, AI is already here, whether through Apple’s Siri, Amazon’s Echo or the call center at your insurance company which automatically tracks your data to improve the customer experience.
We invested in a major study based on the views of 835 business leaders from companies around the world to understand how people see AI impacting their organizations. While the study is extensive, there are four key areas that stand out:
Firstly, the study shows there is a clear correlation between investments in AI and business impact.
The leading corporate investors in AI outspent others by a factor of five, resulting in a 16% or more increase in revenue and corresponding cost reduction, whereas those investing at a slower pace saw a modest 5% increase in revenue. The business case for AI speaks for itself.
Secondly, companies don’t just see AI as nice to have – they see it as “essential” with 84% of respondents stating its major role in driving competitiveness, and a further 50% seeing the technology as “transformative.”
Thirdly, impact is spreading beyond IT departments. While 68% of companies use AI for IT functions, by 2020, 70% believe AI’s greatest impact will be in other roles, including admin, back office and sales and marketing. Finance and accounting were also identified as significant sectors for AI applications, with 27% using the technology for financial trading and customer credit problems.
And finally, while the overall view of AI’s impact is unanimously positive, there are important considerations to bear in mind. Not least perceptions around the impact on jobs.
Our study found that these fears may well be overblown: While the technology will inevitably lead to certain roles being automated, business leaders are also confident that there will also be an upswing in new types of jobs. Leaders placed much higher importance on getting employees to adopt the technologies, using the new systems to boost executive decision-making capabilities and harnessing AI to identify new revenue opportunities. The focus, it would appear, is not on displacing existing jobs, but working with employees to gain the most from the new insights that AI’s cognitive abilities offer.
I also think it’s important that amidst the excitement around AI we don’t forget it is one aspect of a wider trend towards digital transformation. AI is one of a myriad of technology areas that is transforming business – from the internet of things, to big data and mobile applications. Working with organizations of all sizes, we increasingly see a need to find a way of integrating these moving parts. And while there’s no easy fix, it’s my strong belief that much of the answer lies in building a robust digital core – the foundations from which digital solutions like AI can be built.
This includes everything from digital-ready systems to next generation applications; and from a cloud-first approach to robust security. But it’s equally about getting the workplace right and making sure an organization has the right people and specialized skills. Only once the digital core has been strengthened can an organization truly explore where new digital innovations such as AI can take their business. And that’s where we’re seeing a great deal of demand – helping customers put in place the strong foundations around the core and seeking advice on how to develop and evolve digital solutions – including AI – that meet their business challenges.
As technologists helping organizations grapple with the challenges and opportunities of digital transformation, I’m an optimist when it comes to the positive impact nascent developments such as AI can have on business and society. Our study clearly shows that we’re not alone in the expectation of the significant impact it will have. Businesses are getting their heads around where the best application of this technology will be, and that’s no easy task. What’s clear, however, is that big investments are being made and that almost no corner of a firm’s operation will be left untouched.
At TCS, we’re committed to harnessing the power of digital technologies to create a fairer, more inclusive society and we strongly believe digital technologies serve as both a vital and dynamic force for good.
This means we all have a responsibility to think about the opportunities and find solutions to the challenges. But I for one believe there are great gains ahead for us all if we embrace this new paradigm the right way.