It's time to embrace the robots, or at least admit you've been holding hands with them for some time.
From the personal assistants in our mobile phones to the profiling, customization and cyber protection that lie behind more and more of our commercial interactions, AI touches almost every aspect of our lives. And it's only just getting started.
Drawing on the most detailed analysis of the business impact of AI ever carried out, our analysis challenges the hype around AI. Whether you love the robots or fear them, there's five things you need to know.
It's about more than just automation
The greatest commercial potential of AI is doing things that have never been done before, rather than simply automating or accelerating existing capabilities. While disruptors like Netflix have used AI to reshape their sectors and start-ups such as Climate Corporation have built new business models around it, AI still operates at the fringes of many businesses. We now have systems that can see, hear, speak, smell, feel, understand our gestures and interface with our brains. These 'senses' channel data to 'brains' capable of processing volumes of information that are beyond our human comprehension. To be successful, it's important to implement AI as part of your business transformation strategy.
AI is helping make better decisions and solve problems.
In a PwC survey of 2,500 consumers and business decision makers in the United States on their attitudes to AI, more than 60 percent said they believed it could help provide solutions for many of the most important issues facing modern society, ranging from clean energy to cancer and disease. Indeed, our new analysis shows healthcare, automotive and financial services are the sectors set to receive the biggest boost to product value from AI, reflecting the openings to increase customization, enhance quality and save time for consumers.
It's personal, so trust matters even more.
Our research found that 60 percent of the economic impact of AI will come from impacts on consumers and their behaviour. AI enhanced products and services will be more personalized, of a higher quality and save consumers time. At the heart of the commercial potential is the ability to turn data into insights, insights into decisions, decisions into actions, and action into outcomes and, hence, open up opportunities for innovation, personalization and improved functionality. As consumers, we need to understand AI's decisions, and how it is using our data. From an organizational and governance perspective, we need to be thinking about what frameworks need to be in place for transparency around the role of AI – whether it's in how it will be deployed, regulated, or the data it analyses and manages. AI should be able to explain its logic in a way that the common person can understand. Regulation will have to speed up and be responsive to both consumer, business and societal needs.
Machines need friends too
One of the main advantages of AI comes from humans working with machines, helping us to learn better and faster than either one alone. It allows us to draw connections and bring data and learning together, faster and with more insight. Our analysis also shows that as AI improves productivity, the amount of national income paid to workers stays remarkably constant in most sectors and countries, including in China, the US and wider North America. This not only implies that real wages will rise substantially with productivity, but also that fewer jobs will be lost than many studies have anticipated as new jobs are created that work with AI.
It's about new approaches, not a new economy
AI is a continuation of the economic boost from digitization, rather than some magical new breakthrough. Now that the internet, big data and increases in computational power are embedded into the global economy, their contribution to growth is receding. AI is stepping into the breach by sustaining and, in some areas, accelerating the economic boost from digitization. Companies that exploit the 'machine learning advantage' stand to become the leaders of tomorrow.
The unsupported hype that so often surrounds AI compounds strategic uncertainty in companies and consumers about the role and impact of AI. It's not ripping up the rule book, it's writing new pages.
Responsible and responsive leadership - the theme this year in Davos - and how business and society adapts to a digital world, particularly around AI, is one of its most high-profile tests.
Policy makers have a role in proactively creating an environment where AI is responsibly adopted, encouraged and applied, to ensure the transition protects livelihoods and prevents the widening of inequality due to the application of technology.
In the same way that no two friends are the same, don't make the mistake of looking at AI as just one thing. This is an evolution in how we use information. We'll get as much out of the relationship as we put in.
Anand Rao, Global Leader of Artificial Intelligence at PwC