Artificial Intelligence for Business

Dr. Siby Abraham

Agricultural revolution

When? Around 10000 years back.

How? Domestication of animals.

What? Muscle power.

Impact:

Food production improved.

Population growth
Large Human settlement
Formation of cities.
Industrial revolutions (I 1.0)
When? 1760-1849

How? Invention of steam engine.

What? Mechanical power.

Impact:

Canals, trains.
Movement of people
Rapid urbanization
Improvement of living standard.
Industrial revolutions..(I 2.0)
When? 1870-1914

How? Electricity.

What? Electrical power power.

Impact:

Mass production
Movement of people
Rapid urbanization
Improvement of living standard.
Industrial revolutions..(I 3.0)
When? 1969-2000+

How? Computer, semi conductor,

internet.

What? Digital power.

Impact:

Digitized world
Global Village
New service based industries.
 Impact of revolutions…

History is boring..! (2nd Machine Age)

What bent the curve?
Industrial Revolution (I 4.0)

• Sophistication and integration of digital technologies.

• Transformation of the world.

• Coined in 2011 at Hannover Fair, Germany.

Design principles of I 4.0

• Interconnection: Physical, biological, digital (IOT)

https://www.mckinsey.com/Videos/video?vid=6156405806001&plyrid=HkOJqCPWdb&aid=2783C1C6-CC17-4B30-A8F1-A805BA5151C1

• Information Transparency: Information access to all for decision making.

• Technical assistance: Systems support for human. Eg: Siri

• Decentralised decisions: Autonomous decision making by cyber physical systems.

Human intervention in exceptional cases. Eg: RFID toll booth
 Why I 4.0 differ? Speed.

I-phone:
2007
Why I 4.0 differ? Scale
• ???
Why I 4.0 differ? Cost
• ???
Why I 4.0 differ? Complete disruption
Nayib Bukele, El Salvador’s president, announces bit coin as a legal currency on 1st June 2021.

Cash based economy, 70% do not have credit cards/bank account. Remittance: 20% of GDP.
Around 10% commission and delay in transaction.
Why I 4.0 differ? Elephant in the room
Performance of Machine vs Human
• Object Detection
Performance of Machine vs Human
• Answering questions based on a document
Performance of Machine vs Human
• Speech recognition from phone audio records
Performance of Machine vs Human
• Chess: Beat World champion Kasporov in 1997
Performance of Machine vs Human
• Jeopardy ! Quiz: Beat earlier winners Ken Jennings
and Brad Rutter in 2011
Performance of Machine vs Human
• Go: Beat World champion in 2016
Performance of Machine vs Human
• Skin cancer identification: System trained on 129,450 clinical
images of 2,032 different diseases. Compared with 21 board
certified dermatologists
Economic context
Falling GDP rates across developed countries

• Source: Oxford Economics

Decreasing efficiency of capital
Decreasing/inefficiency of labour
 • Capital and labor do not drive production.

• AI can be a production factor.

• Source: Accenture
Factors enabling AI growth
• Unlimited access to computing power.

• Growth in data: 50% increase since 2010.

• Data of 2025 = 10 * Data of 2017

• AI is the new electricity.

• Data is the new oil.

• Marriage of AI + Big data

Impact of AI

• Source: McKinsey 2016

• Source: McKinsey 2016
Susceptibility of jobs

• Source: Standard and Charted Bank 2016

Susceptibility of jobs

• Source: Standard and Charted Bank 2016

Hard facts
Fortune 500 1955 Now
Companies

Average age 55 14
years years

• Companies are not permanent

• Jobs are not permanent

• Life long Employment vs life long learning

What to do?
• Prepare to co-exist with AI
Challenges
• Poor understanding and leadership.

• A diverse set of individuals and communities

• Possible Indiscriminate use (video)

Drivers and mega trends
• ……