September 8, 2017
High expectations mask large gap between understanding of artificial intelligence and its implementation
New research published by the Boston Consulting Group and MIT Sloan Management Review suggests that there remains a wide gap between the understanding and adoption of artificial intelligence (AI) at most companies. The global study of over 3,000 firms and industry experts claims that almost 85 percent of executives believe AI will allow their companies to obtain or sustain a competitive advantage. However, only about one in five companies has incorporated AI in some offerings or processes. The new report claims to identify the key characteristics of AI leaders and offers companies a starting point for developing an AI strategy.
According to the report, expectations for artificial intelligence (AI) are high, but there are questions about what organisations are actually doing to meet those expectations. According to its authors, the goal of the report is to present a realistic baseline that allows companies to compare their AI ambitions and efforts. The research is based on a global survey of more than 3,000 executives, managers, and analysts across industries and in-depth interviews with more than 30 technology experts and executives.
The gap between ambition and execution is large at most companies. Three-quarters of executives believe AI will enable their companies to move into new businesses. Almost 85 percent believe AI will allow their companies to obtain or sustain a competitive advantage. But only about one in five companies has incorporated AI in some offerings or processes. Only one in 20 companies has extensively incorporated AI in offerings or processes. Less than 39 percent of all companies have an AI strategy in place. The largest companies — those with at least 100,000 employees — are the most likely to have an AI strategy, but only half have one.
The research claims there are already large gaps between current leaders in innovation – defined as companies that already understand and have adopted AI – and laggards. One sizeable difference is their approach to data. AI algorithms are not ‘natively intelligent’ according to the report. They learn inductively by analysing data. While most leaders are investing in AI talent and have built robust information infrastructures, other companies lack analytics expertise and easy access to their data. The research claims there are several misunderstandings about the resources needed to train AI. The leaders not only have a much deeper appreciation about what’s required to produce AI than laggards, they are also more likely to have senior leadership support and have developed a business case for AI initiatives.
AI has implications for management and organisational practices. While there are already multiple models for organising for AI, organisational flexibility is a centrepiece of all of them. For large companies, the culture change required to implement AI will be daunting, according to the report. The survey’s respondents and interviewees are more sanguine than conventional wisdom on job loss. Most managers surveyed do not expect that AI will lead to staff reductions at their organisation within the next five years. Rather, they hope that AI will take over some of their more boring and unpleasant current tasks.
Yesterday, IBM and MIT announced that IBM plans to make a 10-year, $240 million investment to create the MIT–IBM Watson AI Lab. The lab will carry out artificial intelligence research and seek to propel scientific breakthroughs that unlock the potential of AI. The collaboration aims to advance AI hardware, software, and algorithms related to deep learning and other areas; increase AI’s impact on industries, such as health care and cybersecurity; and explore the economic and ethical implications of AI on society. IBM’s $240 million investment in the lab will support research by IBM and MIT scientists. The new lab will be one of the largest long-term university-industry AI collaborations to date, mobilising the talent of more than 100 AI scientists, professors, and students to pursue joint research at IBM’s Research Lab in Cambridge, Massachusetts — co-located with the IBM Watson Health and IBM Security headquarters in Kendall Square — and on the neighbouring MIT campus.
Image: Taken from HBO series Westworld