Artificial intelligence (AI) is a hot topic in business. Experts estimate that the AI market will grow exponentially, becoming a $36 billion business by 2025. Are companies ready for this revolutionary change? How can they take advantage of intelligent systems to become more competitive?
This article is based on research by Esteve Almirall
All companies, without exception, are searching for the same holy grail: finding a sustainable competitive advantage that allows them to build temporary monopolies and move away from the relentless struggle of the "red ocean," where companies are stuck competing against each other for the same market space.
"Real competitive advantage doesn't come from competing with similar products or ideas, making processes more effective or increasing productivity. This approach will never get you anywhere, as you'll only achieve a limited competitive advantage," warns Esade Associate Professor Esteve Almirall.
"Real competitive advantage appears not from competing with similar business proposals, but with disruptive ideas that hold great potential, and this is only possible with innovation."
Innovation and artificial intelligence: the holy grail of business
Companies can use innovation to compete in many ways – not necessarily through technology. However, when disruptive technologies promise a whole new universe of potential solutions, these can become the number-one key to gaining a competitive advantage in business.
Technology and data are leading the way to a promising AI future
"Artificial intelligence emerged in the sixties and it has experienced ups and downs – 'hype' periods followed by drought winters. The reality hasn't lived up to the promise just yet," says Almirall.
What has changed since the sixties? How will advances in AI accelerate in the near future? According to Almirall, two main areas – technology and data – are leading the way to a promising AI future.
Technology and artificial intelligence
In 2012, when Andrew Ng presented his results at the Google X Lab after examining 10 million YouTube video thumbnails, his results started a revolution that was dubbed "deep learning." Andrew used a neural network based on 16,000 processors and one billion connections that allowed him to identify human faces with an 81.7% successful match rate. This technological revolution later led to self-driving cars and algorithms that can transcribe voices better than humans or beat humans at any game.
Data and artificial intelligence
"Data is the second element that is leading the way to a promising future for artificial intelligence. Data is the new oil, we often hear, especially big chunks of data. Yet data can be meaningless if not used properly," says Almirall.
He offers a word of caution: "Having access to large amounts of data doesn't automatically give companies a competitive advantage. It is not about how much data you have, but about your capacity to use the data in an effective way that creates value."
Data and artificial intelligence are reshaping how businesses compete. The new deep-learning algorithms in artificial intelligence have two unique characteristics: they require a large amount of data and they are capable of learning without supervision.
"Companies that have access to technology and have a business structure in place that allows them to extract value from data will be the ones that benefit from a sustained competitive advantage, improving their capacities constantly and autonomously."
3 ways artificial intelligence can set your business apart
1. Universal technology
Artificial intelligence is a universal technology – it can be applied to any business, regardless of its scope or area of expertise. Adding artificial intelligence to any process or product, no matter what it is, will bring value to your business.
2. Marginal cost close to zero
At scale, the marginal cost of applying artificial intelligence is close to zero. Once sufficient scale is reached, the cost of adding an additional search, detecting another face or identifying another car on a highway is practically zero.
3. Infinite scalability
Since new functionalities are implemented in code without human intervention and these implementations normally take place in cloud platforms, it is possible to scale and de-scale extremely quickly and at a very low cost.
This article is based on knowledge insights published in Harvard Deusto.
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