Artificial Intelligence (AI) is having an ever-growing impact on global business. Infact, Artificial Intelligence will soon become a NECESSITY for businesses that want to compete in the global market. To understand how AI is disrupting global business, we first need to understand what AI actually is. When people hear the word Artificial Intelligence – some of the first things that come to mind are personal assistants like Alexa, or an evil robot that wants to take over the world. However, AI is much more than that. AI has so many uses and areas where it can make an impact – the potential is huge. Britannica has my favorite definition of Artificial Intelligence: “the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings” (Copeland, 2018). The simple truth is that just about any repetitive task that an intelligent being could do, an Artificially Intelligent machine can be trained to perform those actions just as well or sometimes even better, non-stop!
So, why is Artificial Intelligence becoming such a key part of global business? One word: efficiency. When expanding globally, companies need to be as efficient as possible because expanding globally comes with increased complexity and demand that you need to fulfill in order to be successfull. Traditionally, the solution to this has been hiring more and more employees. However, there is only a certain amount of employees a company can hire before it becomes a logistics and management nightmare. As the number of employees increase, the overhead cost of managing and paying these employees also grows larger. This is why many companies have begun looking for other alternatives, and Artificial Intelligence has been the answer. AI is the key for companies to take their business to the next level. By automating processes that were otherwise thought impossible to automate, companies can manage the demands much better while not having to hire more and more employees. Artifical Intelligence is helping to make the world even flattener. Companies who are able to leverage the power of AI gain a huge advantage and are able to expand into horizons that were not possible before.
By taking a look at history, we can see that the world has been getting flatter and flatter. In other words, globalization has been steadily increasing. For example, with industrialization, companies were able to start mass producing products. This gave them the power to fulfill demand at a rate never seen before. A couple decades later, there was the rise of the Internet. Communication and collaboration became much easier, and there was suddenly a wealth of valuable information available to businesses. In each of these eras, we can notice that the key to global growth has been efficiency. A concept or product was introduced that drastically improved efficiency in businesses. Efficiency is what has driven the constant ‘flattening’ of the world. Artificial Intelligence drastically improves efficiency, and hence is the next flattener of the world.
One excellent example is Amazon’s use of the Kiva Robot. Kiva is an artificially intelligent robot that helps fulfill orders in a warehouse. These robots are much more efficient at retrieving items in a warehouse than having humans walk all over the warehouse. The potential global impact of robots such as Kiva is incredible. Infact, the impact is already visible! Many large retailers use automated robots in their warehouses already. Hence, it isn’t surprising that Amazon actually acquired Kiva and took them in-house almost immediately. Amazon recognized the competitive advantage that these artificially intelligent robots can bring, so they let Kiva’s current contracts with other retailers expire without renewing them. Kiva has now become “Amazon Robotics”.
Over the years, there is no doubt that Kiva has been a key part of Amazon’s growth. Going global is one part, but actually being able to fulfill the insane amount of orders is another. Kiva helps orders go from “placed” to “shipped” much faster. There is no need for dozens of workers to be walking around a warehouse, searching, and reaching up to high shelves. Kiva can coordinate with all the other robots to find the robot nearest to the item, choose the shortest path to get the item and bring it back to the worker who requested it. Especially with the rise in online shopping, retail businesses need to be able to fulfill much more orders in a shorter period of time if they want to keep expanding globally. By 2016, Kiva had already cut operating expenses at Amazon by about 20%. This is mostly attributed to improved warehouse efficiency; cycle times where cut from 60 to 75 to roughly 15 minutes with Kiva robots (Kim, 2016). This is a clear example where Artificial Intelligence is having a huge impact on global business.
More and more, we are seeing businesses pursuing automation of their key processes with Artificial Intelligence. One example is Uber, who has been on a multi-year chase of their dream to take their ridesharing service driverless – at least partially. One idea floating around is that Uber needs to deploy self driving cars before they run out of money. Uber’s founder and former CEO Travis Kalanick has called self-driving cars “basically existential” for Uber (Coren, 2018) and claims the technology could reduce fares by up to 80%. This is understandable, as Uber currently makes about 20-30% commission from drivers (Huet, 2015). Without drivers in the picture, Uber would be able to lower their prices drastically, and still make more than they are making now. The huge advantage of this is that it is easily replicable. Once perfected, Uber just has to invest in some cars, “copy and paste” the AI technology and they can instantly have tens of thousands of self driving Ubers all over the world. This truly shows the potential that AI has for global business.
Another big advantage of AI in global business is that human error is minimised. Factories are very intense environments, and without technology, it would be impossible to keep up with demand at the global level. With the rise of the 24-hour economy, we are seeing more robots replacing humans since they can complete the tasks more efficiently, conveniently and ultimately at a lower cost (Rossi, 2016). Since it is becoming more and more economically feasible to replace humans with robots, what is going to happen to all the human jobs? The common answer is that the millions of repetitive jobs will be replaced by more meaningful jobs. Will there be enough “more meaningful jobs” for everyone?
When considering an idea, we always have to look at other points of view to full understand the issue. In the introduction, I mentioned that “AI will soon become a NECESSITY for businesses that want to compete in the global market.” This may seem like a very outlandish statement. However, it is important to consider that AI could also be harmful to global business if the power is not distributed equally. The potential of AI is so great that businesses and countries with access to the most advanced Artificial Intelligence would completely outcompete other countries. This would then have the opposite effect. Rather than leveling the playing field, AI would allow certain businesses and countries to control large parts of the market.
However, it is arguable that AI is different than previous “flatteners” of the world. Previous “flatteners of the world” required substantial investment and infrastructure built around it. With AI, all you need is the will and you can have the power of AI at your fingertips. There is a large amount of open source knowledge and software that makes it easy to create your own AI applications that could impact your business. Hence, I would argue that the most powerful aspect of AI is not its potential to harm global business, but its potential to become a great equalizer around the world. Services that were once reserved for privileged people can be automated with AI and distributed to the masses. 71% of consumers believe AI will provide educational help to disadvantaged schoolchildren, 122 million of whom are functionally illiterate worldwide (Bothun, 2018).
Some agriculture companies are already using Artificial Intelligence to become more efficient. With increased efficiency, their product output increases and they can export more, making it easier to expand globally. In India, some farmers are already receiving automated voice calls and text messages that give them information on their crop’s risk of pest infestation, recommended sowing dates, soil deficiencies and more (Microsoft, 2017). Microsoft developed this AI application that predicts sowing dates. They fed the Artificial Intelligence model historic climate data spanning over 30 years, and it learnt how to predict the optimal sowing period. The increase in yield of more than 3,000 farmers ranged from 10 to 30%!
An often overlooked benefit of AI is when it comes to interacting across cultural barriers. Expanding to other regions of the globe is more than just setting up shop and opening for business. There is a large amount of research required to successfully expand into a new market, such as researching about the culture, norms and public policies. This isn’t easy. It is difficult to predict what customers from other corners of the world would actually like. Artificial Intelligence can make this all easier. For one, AI allows for more automated personalization. Instead of trying to constantly change the product to suit customers, AI software can learn what customers actually want from the customers’ own habits. This AI software would then be able to predict future behaviors and provide more personalized experiences for the user. This type of personalization is valuable when segmenting users from all over the world. Users’ cultures, preferences, values, and more, all need to be taken into account. By having technology that actually learns and shapes itself to the individual, we can better suit our product to that individual. Additionally, thanks to AI techniques in language understanding and translation, it is much easier to conduct business in different languages. For example, you don’t need to hire customer service representatives for every single language. You can train AI chatbots that can communicate in multiple languages. These chatbots are powerful – they can communicate with clients, no matter what language they speak, and direct the serious leads to your busy sales people. AI breaks down the barriers of doing global business.
All in all, Artificial Intelligence is going to completely change global business as we know it in the next couple decades. Like any new disruptive technology, there are the winners and the losers. Companies must adopt Artificial Intelligence into their business practices as soon as possible, so that they can be on the winning side. Artificial Intelligence gives companies the power to be more efficient, adapt to new cultures, communicate more efficiently, and manage demand at unprecedented levels. Artificial intelligence is a powerful arsenal that modern businesses must equip to prepare for global business in this era.
References
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