AI – companies will gain competitive advantages
Over the last eight months the general public has been inundated with news about Artificial Intelligence with the development of ChatGPT; protagonists hailing its praises and detractors, including its developers, warning that it could spell disaster for mankind.
Anyone who was a fan of Stanley Kubrick’s Space Odyssey 2002 and the menacing Hal or Terrance Dicks and his Cybermen and Daleks creations in the BBC TV series Dr. Who in the UK will realise that the idea of AI was in the pipeline in the 1960s and 1970s.
The term AI was actually coined in the 1950s and refers to the simulation of human intelligence by machines. It covers an ever-changing set of capabilities as new technologies are developed. Technologies that come under the umbrella of AI include machine learning, deep learning and ChatGTP.
“It will introduce great differences to and between companies; between those that adopt it and those that don’t. Those that do will gain a huge competitive advantage on those that don’t which will face a huge quantitative disadvantage”, said Professor João Ralha, a senior management consultant to the Blockchain Institute of Technology (BIT) – the world standard for blockchain education and certification.™
João Ralha was addressing the business elite at a lunch organised by the International Club of Portugal (ICPT) recently when he remarked that AI will help companies and organisations achieve 10 times the amount of work at the same quality in a wide range of areas in both the private and public sectors, in industry, science, technology, medical research, management, accounting, law, and the list is endless.
For example, a company can create a presentation by an avatar generated from a photo and it will soon reach a level of sophistication that it will be difficult to tell the avatar from the actual person or generated person it was modelled on. It doesn’t take much imagination to leap a few decades forward to see the creation of androids like ‘Ash’ which featured in the film Aliens.
ChatGPT – the public face of AI
Until last year, AI was for many a misty concept dominated by the tech geeks and nerds that inhabited large tech companies. Everyone knew what AI was, but the general public couldn’t see it as something tangible. ChatGPT has changed all that. Now it is real, tangible, fascinating and frightening at the same time.
Chat GPT developed by OpenAI – The organisation is headquartered in San Francisco and was founded by some prominent players — including Elon Musk, Sam Altman, Peter Thiel, OpenAI chief scientist Ilya Sutskever, Jessica Livingston, and Linkedin cofounder Reid Hoffman.
ChatGPT, announced in October 2022 and financed by Microsoft to the tune of US$10Bn, is an application that permits a dialogue between the searcher and the application which is trained by data and can establish links between vast amounts of data on almost any question. It is the first commercially available generative AI application.
For example, when asked how a club, such as the International Club of Portugal, can boost its membership from 10,000 to 15,000, ChatGPT comes up with five strategy areas of action on how to increase membership for each potential target segment of the public and explains them. However, it’s no that simple. You still need to know about social media and online marketing to know the right questions to field in the first place.
And it could also theoretically help consultant companies that help other companies to refocus their production, expand their client base, help the CEO prepare for a TV or newspaper interview, or a candidate for a job interview. This not to mention the applications for medical diagnostics, research, and other medical analyses.
According to a study by Accenture in the US, AI opens the way to many opportunities with over 60% of companies “experimenting with AI to determine the “significant opportunities for value creation”.
The analysis further shows that most companies (63%) are AI Experimenters, barely scratching the surface of AI’s potential with an AI maturity score of 29. AI Innovators (13%), scoring 50, and AI Builders (12%), at 44, are somewhat advanced in their level of AI maturity, but are still leaving the full value of AI untapped.
“We believe every part of every business must be transformed by technology, data and AI, in some cases resulting in total enterprise reinvention,” said Sanjeev Vohra, global lead for Applied Intelligence at Accenture. “AI Achievers are showing their peers what’s possible when you release the full potential of talent and technology, working in tandem, supported by a clear vision and commitment to change. But even this most mature group has plenty of room for growth. And while most industries have AI Achievers, they vary greatly in how AI-mature they are overall and the leaps they will make.”
AI is also increasing but in some sectors more than others. Not surprisingly Tech, Automotive, Aerospace, Defence and Life Sciences lead the way in investment. What was shocking is that the Banking and Capital Markets sectors are at the bottom in terms of AI maturity.
Of course, large companies are also ahead of the game since they have the financial and staff resources to advance much further than small and mid-cap companies.
IKEA – a model example
IKEA is a good example of a company embracing AI while showing concern for the future of its call centre staff whose jobs will be replaced by the technology. IKEA is training 8,000 call centre workers to become interior design advisers as the Swedish furniture giant aims to offer more home improvement services and hand run-of-the-mill customer queries to an artificial intelligence bot called Billie.
In April, IKEA expanded its interior design services to the UK and United States, after previous launches in parts of Europe, Australia, the United Arab Emirates and elsewhere. In the UK, customers pay £25 ($31.44) for a 45-60 minute interior design advice video call and suggested product list, and can pay £125 for three workspace design consultations, a floorplan and 3D visuals.
“We’ve never had such a vast encyclopaedia as ChatGPT, with the great advantage that it can cross reference all areas making links between them and come up with an answer that is probably statistically correct,” says João Ralha who regularly lectures at Universidade Lusófona – Centro Universitário Lisboa.
But while any one of us will be able to use AI applications such as ChatGPT, the applications are much wider and potentially game-changing for Portuguese companies, especially given that EC funds through the Portugal Resilience and Recovery Facility are available to groups of companies for certain projects linked to AI, Digitalisation, modernisation and up-greening.
“There is a group of Portuguese companies which have invested in AI and are benefiting from this (RRF) including the Pestana Group, Sword Health, Delta and Sonae and will benefit from AI. By 2025 Portugal will receive around €78 million to invest in AI projects which will generate 215,000 jobs and millions of euros in exports by 2030”, said Professor Ralha.
“I think this is a very expensive investment, but I hope that some interesting applications emerge from this investment”, he concluded.
Quotes of day and ideas from the floor
Robots v Humans
“There are some things that robots are more intelligent at doing and others they are not. They will never be like humans in my view”. Professor João Ralha.
“On projects such as the new Lisbon International Airport, AI applications will prove useful in determining criteria through information obtained about all the other airports in the world and the characteristics an airport should have. This will help planners, architects and commissioners take better decisions. AI won’t take decisions for us; it will help supporting us to make decisions more rapidly”. Professor João Ralha.
Open AI and Education
Investment in Open AI is tremendous with a recent study by McKinsey suggesting that Generative AI’s impact on productivity could add trillions of dollars in value to the global economy. Its latest research estimates that generative AI could add the equivalent of $US2.6 trillion to $US4.4 trillion annually across the 63 use cases it analysed—by comparison, the United Kingdom’s entire GDP in 2021 was $US3.1 trillion. This would increase the impact of all artificial intelligence by 15 to 40 percent. This estimate would roughly double if one includes the impact of embedding generative AI into software that is currently used for other tasks beyond those use cases.
America has 50% of the new tools, followed by China, Canada, France, Germany, and the UK. The question is what Portugal is doing to capture the capacity and potential of AI. Does the Portuguese government have an investment strategy for AI to be better placed on the world stage?
“Portugal is a small country and investments in Portugal pale in comparison to those in the US. Portugal does have €78 million for AI and over €60 million earmarked for Blockchain in the RRF. I have no doubt that Portuguese companies that are competing internationally will clearly take a lead but face stiff competition in these areas, particularly construction. Obviously they should invest in these tools and use them when competing internationally and some of their international competitors are already operating in Portugal.
“Therefore it is urgent that companies invest in this area, regardless of the RRF funds, and education will be essential to understanding how these tools can be used to get the best from them to benefit companies”.
“We have a problem in Portugal when it comes to education and studying, but studying is for all ages and it is fundamental in terms of training and applying resources to see how these applications can help our companies”. Professor João Ralha.
“This technology will be a game-changer for both the public sector as well as the business sector, particularly in drastically reducing the bureaucracy of the State, improving the performance and productivity of the public and administrative sector sectors. I should stress the application of these technologies and accelerated training in this domain to improve the public sector which governments directly control”. (Eduardo Catroga, Acclaimed economist and former Finance minister)
“Changing the bureaucracy and administration of the State is very complicated and from my point of view public company work should be outsourced through concessions and managed by private companies. This would, to my mind, rapidly increase (and I am talking about PPPs) the productivity of these applications.” (Professor João Ralha)
“This technology will take away a lot of people’s jobs but will create new ones. We know robots have been working in industry for years, but what will the workforce be like in a few years from now? (Dr. Jorge Fonseca)
“It will require a huge effort in terms of training and learning on the part of the State, individuals and companies. Since the time of the Industrial Revolution and the Luddites people’s jobs have changed. E-commerce, for example, has completely changed the way retail operates, but new opportunities will arise”. Professor João Ralha.
AI and Author’s Rights
It has long been the posture of the US Copyright Office that there is no copyright protection for works created by non-humans, including machines. Therefore, can the product of a Generative AI be copyrighted?
“In terms of author’s rights there is a problem. It is a matter that is extremely controversial at the moment, is on the table and will be dealt with. All of us can become creators with his technology and potentially make financial gains from it”.