In the realm of technological advancements, Artificial Intelligence (AI) stands as the next uncharted frontier, poised to revolutionise the way we live, work, and interact. Many of the recent advances can be attributed to foundation models that contain deep layers of artificial neuron networks (ANNs) and deep learning.
Recent deep learning models in generative AI can process extremely large and diverse sets of unstructured data, as well as perfrom multiple tasks. Foundation models thus gave rise to new capabilities including the generation of images, video, audio and computer code. AI can now classify, edit, summarise, answer questions, and create new content, to name just a few.
The most recent generative AI applications have proven their competence in various mundane tasks, like organising and categorising data. However, it is their exceptional ability to write text, compose music, create code, and generate digital art that has captured media attention, and encouraged business and individuals to explore and experiment with these capabilities.
With its unparalleled ability to rapidly analyse vast amounts of data, learn from patterns, make intelligent decisions, and create content, AI has the potential to unleash the next wave of productivity across industries and propel humanity into a new era of progress and economic growth.
Impact of AI
As AI continues to evolve, its impact on various sectors becomes increasingly evident. In the business landscape, AI-driven automation is leading in redefining traditional workflows. Repetitive and time-consuming tasks can now be entrusted to AI-powered algorithms, freeing up employees to focus on strategic decision-making and creativity. This liberation is fostering a culture of innovation within enterprises, empowering them to stay competitive in an ever-changing global marketplace.
In healthcare, AI-driven diagnostics and treatment plans are demonstrating remarkable accuracy and efficiency, enabling medical professionals to detect illnesses at early stages and deliver personalised care. Moreover, the integration of AI in agriculture is revolutionising farming practices, optimising crop yields, and ensuring sustainable resource management.
Education, too, is experiencing a paradigm shift through AI. Intelligent tutoring systems and personalised learning platforms are tailoring educational content to the unique needs of individual students, unlocking their full potential.
Accruement of value
From enhancing efficiency in industries to streamlining daily tasks, AI's potential to elevate productivity has captivated the attention of both experts and enthusiasts alike.
The resultant economic impact of AI can be significant. According to McKinsey (The economic potential of generative AI, 2023), generative AI’s impact on productivity could be trillions of rand – an incremental increase of 35% to 70%.
Currently 75% of the value created by generative AI are in four areas, namely, supporting customer interactions and operations; generate creative content for marketing and sales; draft computer code for corporate IT software engineering and product development; and support of product research and development. Some typical benefits are:
– Operational improvements: Customer self-service through chatbots; reduced response time; and increased sales.
– Marketing and sales: Enhancing personalisation, content creation and sales productivity. Potential benefits of using generative AI in marketing are: Efficient and effective content creation; enhanced use of data; search engine optimisation (SEO); product discovery and search personalisation. The potential benefits of using AI in sales are: An increased probability of sales and an improvement of lead development.
– Faster generation of computer code (software engineering): AI functions as a coding assistant. Peter Cihon found that software developers using Microsoft’s GitHub Copilot completed tasks 56% faster than those not using the tool.
– Product R&D: Reducing research and design time; improving simulation and testing. Typical improvements are: Enhanced design and improved product testing and quality.
Value creation can not only be contributed to the content generated by AI, but also the velocity of the AI systems. For example, in May 2023, Anthropic’s generative AI, Claude, was able to process 100,000 tokens of text, equal to about 75,000 words in a minute - the length of the average novel. This can indeed improve the productivity of workers, but can also be a threat to their work security.
Potential impact on the workforce
Generative AI may unlock trillions of rand in value, but will surely transform the anatomy of work. The capabilities of individual workers will be augmented by AI through the automation of many activities that currently take up 60% to 70% of their time.
The recent acceleration of the automation of many tasks can be attributed to AI’s impressive ability to understand natural language. This enables teams to retrieve knowledge by formulating queries in normal question format. This could empower teams to quickly access relevant information, enabling them to quickly make better-informed decisions and develop effective strategies. The rapid reading capability of AI of corporate information, fine-tuned by a skilled human, can vastly increase the efficiency and effectiveness of workers.
However, generative AI could also improve productivity and value by collaborating with workers; augmenting their work to accelerate their productivity. A typical example is the analysis of huge datasets to support product development and decision making.
It is thus logical that generative AI will have a much larger impact on knowledge work that is typically associated with higher paid wages and educational qualifications.
Without doubt the pace of workforce transformation will gather speed in the future. According to McKinsey, half of current work activities could be automated by 2045. Due to automation, numerous roles across business functions will change dramatically.
Therefore, despite the unquestionable benefits AI brings to the table, concerns about potential job displacement remain prevalent. While some jobs may indeed be automated, history has shown that technology also creates new opportunities, requiring reskilling and upskilling to adapt to the evolving workforce landscape. Additionally, stringent data protection measures must be put in place to safeguard sensitive information and preserve individual privacy.
Support of workers
Generative AI and work automation could lead to a productivity growth of 0.1 to 0.6 percent annually and when used in combination with other innovative technologies can even be as high as 3.3%.
However, the dramatic change in roles and skills entails that workers need to be trained in new skills since many will change vocation. Only if these worker transitions can be managed properly, will generative AI considerably contribute to the economic growth of South Africa.
The future of AI lies not in an autonomous, self-governing entity but as a collaborative tool working hand-in-hand with humans. The symbiotic relationship between AI and human intelligence holds the key to unlocking unprecedented possibilities for our society.
Embrace AI responsibly
In conclusion, AI is undeniably the next frontier of productivity, offering boundless possibilities to revolutionise industries and elevate human potential. Generative AI has numerous benefits and could increase productivity and economic growth. However, business leaders have several challenges to deal with, such as ethical risks, training employees in the new skills and capabilities, redesigning core business processes, and developing new business models.
As businesses embark on this transformative journey, it is essential to embrace AI responsibly, ensuring that it serves as a force for fostering progress and enriching lives across the globe. With the right approach, AI will undoubtedly be the catalyst for a more innovative, prosperous, and sustainable future.
Professor Louis C H Fourie is an Extraordinary Professor in Information Systems at the University of the Western Cape.
BUSINESS REPORT