5 September 2017

  |  CBI Wales

Update

AI can make crucial contribution to growth and jobs

When you think of artificial intelligence (AI) you might picture the rather farfetched portrayals in films like the Terminator or 2001, the reality is thankfully a lot more prosaic writes CBI Wales Director. 

AI can make crucial contribution to growth and jobs

Written by Ian Price for the Western Mail 

When you think of artificial intelligence (AI) you might picture the rather farfetched portrayals in films like The Terminator or 2001. The reality is, thankfully, a lot more prosaic but it doesn’t mean the emergence of AI can be ignored.  

Essentially, AI can be defined as “when a machine mimics cognitive functions that humans associate with other human minds, such as "learning" and "problem solving".  

Examples today include Siri in your IPhone, Google Translate, self-driving cars or autonomous surgery. These are the most recent examples but financial institutions have quietly been using artificial neural network systems to assist in trend analysis for some time.

The concept of technology challenging the status quo is not new. Why AI is raising eyebrows today is both the pace and scale of the change that could well occur.

Predictions are wild and varied. The reality may be more mundane but failing to plan is planning to fail.

Wales, as a country, needs to be prepared. We need to investigate the likely advantages and disadvantages the emergence of AI would have on our economy and society. The pace of change may take us by surprise, leading to unplanned and surprising consequences.

We cannot let Brexit, as serious as it is, completely crowd out a serious and long-term discussion on the impact of AI, and more broadly, the fourth industrial revolution will have on Wales.

One of the most dramatic fears associated with technological advancement is unemployment. Indeed John Maynard Keynes popularised the term ‘technological unemployment’ in 1930s.

AI introduces the potential – and only the potential – for increasingly sophisticated functions to be automated.

In the past, our economy has broadly adapted well to technological developments but we all know the impact sudden and unplanned changes – like the closing of coal mines – can have on our communities. And many believe AI operates in accordance with “Moore’s law”. An observation originally made by Intel co-founder Gordon Moore in 1965 when he noticed that the number of transistors per square inch on integrated circuits had doubled every year since their invention. That is a pace of change quite unlike any other.

As Stephen Fry said at this year’s Hay Festival “technophobes” have been too slow to react to developments like AI. "Whether it is winter that is coming, or a new spring, it is entirely in our hands so long as we prepare."

Innovation in business is essential for advanced economies such as the UK. It is the chief driver of sustainable economic growth and a major source of productivity gains. It also pulls in overseas investment, supporting thousands of jobs across the country.

Companies across the globe are constantly investing in innovation to improve products and services and stay one step ahead of their competitor and AI is a powerful new tool for them to utilise.

Indeed a new CBI survey of 160 businesses in association with IBM revealed last week that nearly half of firms believe the current wave of Artificial Intelligence will be transformational and widespread; fundamentally transforming the industry and markets they work in.

However, only a third feel their business has the skills to adopt data-driven technologies, so Wales and the UK must act quickly to bridge the knowledge gap as international competition heats up.

Technologies like cloud which were seen as niche just a few years ago have matured to now underpin much of the UK business infrastructure. Investments over the last 12 months – Cloud (73%), Mobile Technology (79%) and security (71%).

Artificial Intelligence (AI) investment is gaining momentum with 42% of companies planning to invest over the next five years (Internet of Things – 42% / Advanced Analytics – 51%). That’s on top of the one in five companies (21%) who already invested in AI during the past 12 months.

UK businesses are directing resources into new technology, with cloud, mobile and security investments forming the UK’s digital backbone. But a major shift is on the horizon as AI gains momentum with half of firms believing their industry will be completely transformed by it in the years to come.

The digital gap risks becoming a chasm with AI set to transform the face of UK businesses.

It is clear the world stands on the brink of technology-driven change. A change that will arguably be bigger than Brexit. New business models, digitally enabled trade and automation will pose real and tangible challenges to how we do business.

New innovations, like AI, will transform the relationship between businesses, citizens and government.

Today it’s more important than ever that we listen to each other.

We must remember that citizens are concerned about how we can manage new technology, in a world where the pace of change can mean some people feel left behind. This is an important message for business and policy-makers alike. If we ignore these voices and only appeal to innovation-hungry pioneers, then we’ll fail to bring people with us.

We are currently at a tipping point where AI is becoming mainstream so now is the time for Wales to gain global leadership by seeing it as a creator of economic value. As our country gets ready to forge a new direction we have a tremendous opportunity to seize an early competitive advantage.