41% of UK firms fear their business models wont exist in 5 years due to AI
Over two-fifths (41%) of British companies believe their current business models will cease to exist in the next five years thanks to artificial intelligence (AI), according to a new survey.
The research, from Microsoft, also found 51% of UK business leaders do not have an AI strategy in place.
The survey, entitled Maximising the AI Opportunity polled more than 5,000 business leaders and employees of large enterprises across the United Kingdom.
The research found 45% of employees are concerned their job could be taken by AI, yet 51% are not learning skills to help prepare for changes in the workforce.
In the introduction to the report, Cindy Rose, CEO, Microsoft UK, said: “Our research reveals that two in five of the UK’s business leaders believe their current business model will cease to exist in five years’ time. However, fewer than half of the UK organisations we spoke to have an AI strategy in place.
“Organisations investing in AI are already significantly outperforming those who are not. But there is a growing gap between the number of employees calling for support in developing the skills to work with AI and the number of organisations actually providing it.”
The report wasn’t all doom and gloom when it comes to the impact of AI on the workforce. Organizations that used AI technology outperformed other businesses on factors like productivity, performance and business outcomes.
It found companies that develop strategies around the ethics of AI are even more productive.
Technology companies can take a leading role in helping develop safe and ethical AI platforms, for example by ensuring that human bias isn’t built into algorithms. Microsoft, like other tech giants including Amazon and Google, is making big investments in its AI capabilities.
In the report, Microsoft urged business leaders and decision makers in public sector bodies to regard AI technologies as a collective process of continuous learning and improvement.
For the UK to make a success of AI, the report stated this learning exercise should be approached with transparency, excitement, and healthy scepticism, and guided not just by organisational concerns but by social ones too.
“Only then can organisations of all shapes, sizes and sectors build an AI strategy that delivers the right outcomes – for both themselves and the employees, customers and societies they serve,” Microsoft said in the report.
Commenting on the findings, John Gikopoulos, Global Head of AI and Automation at Infosys Consulting said that the Microsoft report is yet another reminder that businesses must adapt and think big when it comes to AI – or they will be overtaken by the competition. He addresses the impact on the marketing function, and how it has changed (and will continue to change) in the age of AI. Please see below for the full comment.
“The AI game is evolving. The Microsoft report is yet another reminder that business leaders must adapt and build large-scale, ambitious AI strategies,” Gikopoulos said. “Right now, executives are adopting a minimum level of innovation to test the waters rather than drastically change their operating models. In doing so, they run the risk of becoming dinosaurs, extinct in a world that will have overtaken them at lightning speeds.
“New start-ups with fresh ideas or existing corporations with large innovation appetites – and budgets – are changing the rules of the game. It comes as no surprise that 2 in 5 companies said their business models will be revolutionised by AI. There’s no escape – this is happening across every industry.
“Take marketing for instance. Only a few years ago, talented marketers employed focus groups, retrospective analysis and sometimes good old intuition to optimise product-buyer matching. Today, with the advent of advanced analytics, machine learning technologies and clever data scientists – that are able to either choose or write the correct algorithms – companies can reach their target audience with the right product, through the right channel, at the right time. This will irreversibly change the marketing function within the next five years.
“To avoid catastrophic impact on business models, every executive must be a leader, not a follower. The AI locomotive is running at high speed: every business needs to jump on or face being left behind.”
Johan Den Haan, Chief Technology Officer at Mendix discusses how retailers can practically implement AI within their day-to-day operations: “The retail sector is navigating some challenging market conditions, and experimenting with new technologies like AI can sort the winners from the losers. Rivals are no doubt racing against each other in the path to mass AI adoption, but successful uses can only be achieved if organisations take the time to carefully consider how they’ll practically implement AI within their day-to-day operations.
“Working with external developers might seem like the best way to do this, but that approach often delivers solutions that aren’t built for purpose, fail to match business expectations, or both. Starting with the applications they develop and rely on a daily basis, retailers must instead ensure their IT teams have the right tools to both experiment and incorporate AI into their organisation. The speed and success of AI implementation rests on getting this right.
“New approaches to software development like low-code enable retailers to more easily experiment with technologies like AI, combining speed with the ability to scale up and modify applications as and when required. Ultimately, to see a real boost in productivity, and income as a result of AI, retailers must be able to deliver fresh ideas to market in weeks, fast-tracking business innovation now and into the future.”
Anne Sheehan, Enterprise Director at Vodafone UK, said: “AI holds huge promise for UK businesses, enabling them to automate many tasks while bringing an unparalleled level of analytical power to others. However, to enjoy the benefits of this powerful technology, we think it’s important that businesses deploy it in a way that retains a human touch. For example, in our own use of our AI chatbot, known as TOBi, we make sure customers are aware they’re not communicating with a human; and that they have the option to talk to a real person if required.
“Moreover, AI is fuelled by data of course – and this has implications. Should a data set contain bias, the technology will embed these biases into the way it works. To combat this, we’re working with recognised research authorities to understand the potential for AI bias – and not only from a technical perspective. We’re creating diverse AI teams with broad ranging skillsets, to ensure we judge the impact of potential deployments from a variety of perspectives.”
Rupal Karia, Head of Public and Private Sector at Fujitsu UK & Ireland, said: “New emerging technologies are fundamentally changing the way we work and engage with businesses. The UK’s new industrial strategy puts technology and particularly AI at the heart of its success and we are already seeing a number of new and exciting innovations stem from its use. British companies are at the head of the pack for driving innovation in this space, with AI having the potential to be truly transformative, empowering businesses and enabling people to thrive in a digital world.
“Yet, with the pace of change increasing rapidly, there is an expectation that businesses will be able to adopt new technologies at the same rate as they have previously done. And while UK businesses are undoubtedly excited about the digital journey we’re on, there is currently a risk that many will be left behind if they’re not able to adapt their business model to embrace technologies such as AI. Indeed, it was our own research which found that half (49 percent) of UK businesses have no plans to implement AI in the next year.
“To ensure the UK remains at the heart of digital transformation, it is not just the responsibility of the government to support businesses with this change and help them on this journey; the tech sector should join forces with government to ensure the UK remains a global leader in an increasingly digital world.”
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