Artificial intelligence is related to digitization like fossil fuels to industrialization. - Taylan Erdogan
Artificial intelligence is the fuel of digitization. It will determine the next era of digitization and shape our society. It is already a significant part of our everyday life. In 2019 alone, AI contributed to sales of over 200 billion USD in Germany. By 2030, economic growth of 430 billion USD is possible thanks to AI-based technologies; worldwide it is around 15 trillion USD. China and North America have the greatest potential. Even if the idea of AI and the first simple applications go back to antiquity, the fifties of the last century are considered to be the hour of birth of AI. Immense progress has been made to date, but the digital age will be the breeding ground for AI to flourish.
The business landscape will be completely transformed. Automated manufacturing is only part of the value chain that is dominated by AI. Autonomous interaction with the customer, which extends from marketing and offers to processing and shipping, brings innumerable possibilities. The links of trade will be linked to one another in a highly efficient manner. Production, sales and marketing will become part of a holistic and dynamic algorithm that will minimize human intervention. Like most technological developments, this is also associated with the loss of many jobs and the creation of many new ones.
In 2019, the number of companies dealing with AI in Germany more than doubled. Almost half of the German companies have established machine learning. It is the large companies in particular that are responsible for this development. 95 percent of companies with over 1000 employees either use these technologies or plan to introduce them in the foreseeable future. For companies with less than 500 employees, this proportion is 78%. These numbers show that AI will be an essential part of the market in the future. A gap opens up, especially for medium-sized and small companies, as they only use the potential of AI to a limited extent for their companies. An approach that is feasible for these companies from an economic point of view and that entails the lack of know-how could be profitable for external service providers.
In addition to financial resources, there is also awareness of the importance and necessity of these technologies in the future market. The relatively simpler processes and the small size make small companies more susceptible to the idea that they do not need this development in their business area. Over time, the increasing efficiency in production and customer relationships of competitors who use these methods would drive other companies out of the market. Another advantage for small companies is that the company size-dependent market entry barriers can be reduced by AI in special situations. This allows smaller companies to penetrate business areas that were previously only available to large corporations.
Managers of large corporations use the potential of AI for their entire business areas, while the majority of medium-sized and small companies see AI only as optimization of their marketing and customer service. This can be seen from the fact that medium-sized companies mainly use AI for behavior-based forecasting and identification of target groups. Small businesses focus on big data analytics and hyper-targeting. Large companies also use AI for speech recognition, image and text analysis, and machine translation. However, the full potential that AI harbors for the market does not seem to be entirely apparent to managing directors of many large companies. Because almost 60% believe that there is enough to do in terms of AI, while the AI experts still see a lot of catching up to do (over 80%).
Since this is a relatively new field for most companies, the IT departments are not ready to do everything independently. Thus, the importance of external IT service providers is at a historic high. Almost 70% of companies work with external service providers, most of them with more than one. This also applies to medium-sized and small companies. A good example of good use of AI in medium-sized companies is a German Internet platform for legal advice with around 3 million hits a month, which thanks to AI reduces 60% of the time its specialists spend on the same service. The challenges for the use of AI in companies are the know-how, the data evaluated by the AI and the traceability of the conclusions that AI draws from this data. DeepTech is a key concept for solutions of this kind.
Many companies have an action plan to advance the digitization of their business with the help of traditional software, but no AI-related end-to-end business strategy to be really well-positioned in times of digitization. AI needs to be built into the overall strategy. It is slightly productive to improve individual aspects in the existing model using AI. A holistic new approach shaped by the new opportunities can leverage the potential of AI for the company. The employee landscape will inevitably change. The homogeneity will give way to a mix of specialists from different areas.
The necessity of using AI has been known to many corporations for years. This awareness has not fully penetrated the middle class, which will change after a few years. If you act now and look for ways to optimize and grow your business with the help of AI, you will have a clear advantage over companies that were a few years ago be given the choice of adapting to the times or of being pushed out of the market. Today you have the opportunity to act instead of being forced to react in a few years. My recommendation to you: Take the reins in your own hands and take the plunge!