Market Trend Analysis of Artificial Intelligence At a Glance

Artificial Intelligence will become one of the most transformative, general-purpose technologies over time

The rate at which artificial intelligence is advancing, developing, and disrupting industries around the globe is tremendous. As the technology is gaining strong-hold more than ever, understanding its disruptive factors is imperative as it enables more accurate forecasting and better planning for civil society, policymakers as well as businesses. Exploring the key levers that drive the adoption of AI applications can help expedite many optimistic use cases in the pipeline, including optimized renewable energy distribution at scale, machine learning disease diagnosis systems in healthcare, and more.

The evolution of powerful, economical computer technologies, advanced algorithms, and massive amounts of data on almost any subject have propelled AI beyond early adopters to a broader marketplace. Some expect that AI will be the biggest commercial opportunity for companies as well as countries over the next coming years, and will have a potential impact on the global GDP growth.

AI will become one of the most transformative, general-purpose technologies like the steam engine, electricity, and the internet over time. The adoption of this technology will likely follow a relatively slow start in the early years, as it is in its infancy, and most firms are yet to learn how to best leverage AI for their business value.

Market Adoption

The adoption of AI continues to increase as businesses seek to generate more returns. The use of AI in standard business processes is soaring rapidly year over year. In its survey of 1,900 IT and business executives from seven countries and a variety of industries, Deloitte revealed that 65% of respondents reported that AI technologies are enabling their organizations to move ahead of the competition. On the other hand, 63% of executives already perceive AI as "very" or "critically" vital to their business success, and that number is projected to grow to 81% within two years. Additionally, 57% expect that AI will substantially transform their company within the next three years. AI is taking center stage at every business strategy and demonstrating huge potential across a wide variety of business operations.

Today, the development of new products is being embedded with virtual assistants, while the use of chatbots is experiencing immense implementation from businesses, answering customers' questions on everything. Meanwhile, companies like Google, Microsoft, Salesforce, and others are capitalizing on AI as an intelligence layer across their entire tech stack. Enterprises are deploying AI for excerpting social data, driving engagement in customer relationship management, along with optimizing logistics and efficiency when it comes to tracking and managing assets.

Applications of AI have been spreading from consumers to businesses, improving productivity and strengthening development. To get the most out of their AI implementation, businesses must revisit their digital strategy and make progress on their digital journey. They must scale the impact of AI across the enterprise and see the development of an enterprise-wide portfolio by putting key enablers in place.

Artificial Intelligence Adoption by Industries

Based on the industry-wide adoption of AI, most progress has been made in a few years. Here are a number of factors that explain this trend:

Manufacturing: Manufacturing is one of the early adopters of AI. Since the industry deals with vast quantities of data owing to its use of sensors and networks, the industry is primed for AI adoption in order to drive business value. AI in manufacturing can create new opportunities and enhance operational capabilities by expediting processes and making organizations adaptable to changes in the future. As the manufacturing sector shows high hopes for AI, a Deloitte survey found, that 93% of companies believe AI will be a pivotal technology to drive growth and innovation in the sector. Moreover, 87% of manufacturers have adopted AI or planned to do so within two years, while 83% hold that AI will make a tangible impact on manufacturing and management in the following two to five years. Another report from Capgemini Research Institute shows that Europe leads AI adoption in manufacturing operations, with 51% of manufacturers implementing AI. The number is followed by Japan with 30% of AI adoption, the US with 28%, and Korea and China with 25% and 11%, respectively.

BFSI: The banking, financial services, and the insurance industry have undergone a dynamic transformation as the industry requires improvement in areas like fraud detection, wealth management, and insurance processing. The use of AI has great potential to transform the industry. By adopting the technology, BFSI firms can meet strategic objectives like improving customer experience, cost, and efficiency optimization, delivering personalized services, and improving speed-to-market for offerings. This AI-led transition of the BFSI sector can also enable companies to keep pace with changing regulations and counter competition from new entrants. While AI is becoming mainstream in Financial Services within the short term, the report found that 85% of all respondents surveyed are currently using some forms of AI, with FinTechs being slightly ahead of Incumbents in AI adoption.

Healthcare: AI promises exhilarating opportunities to transform the healthcare landscape. It offers enticing prospects for faster, more precise clinical decision-making and augmented R&D capabilities. As the interoperability of data is one of the most critical challenges for AI in healthcare, the technology development for healthcare applications is surging at a rapid pace. The potential benefits of AI applications in healthcare include automating tasks and assessing big patient datasets to deliver better healthcare faster and at a lower cost. While 30% of healthcare costs are associated with administrative tasks, AI has the ability to automate some of these tasks, like pre-authorizing insurance, following up on unpaid bills, and maintaining records, to ease the workload of medical personnel and eventually save them money. According to a KPMG survey, 53% of healthcare executives believe that the healthcare industry is ahead of most other industries in AI adoption. 89% of respondents reported that AI is already creating efficiencies in their systems, while 91% said AI is increasing patient access to care.

Retail: Undeniably, AI adoption in nearly every industry in the past year has seen enormous uptake. And the retail sector has the largest share in it, as retailers have embedded at least one AI capability in one or more functions or business units. Retailers can also make and save billions of dollars by embracing Automation, Robotics, AI and Drone services. They can even save billions of dollars in the future by scaling AI implementations across the entire value chain. A majority of retail businesses are already adopting AI-powered intelligent automation at a breakneck pace, and that process is only about to stimulate. Companies primarily use intelligent automation to perform discrete internal processes that rely on existing rich datasets, such as demand forecasting and customer intelligence. IBM divulged that 85% of retail, while 79% of CPG companies plan to transform their Supply Chain using intelligent automation. By leveraging the technology, they expect to grow their revenues by 10% or more in the next 2-3 years.

Transport and Logistics: AI is relatively new in the transportation and logistics sector. Despite this, a myriad of companies has already begun capitalizing on AI-based systems. As logistics, transportation, and supply chain have ushered in the era of profound transformation, AI has a crucial role to play in the industry. It can upsurge productivity and revenue since the technology is already revamping the industry in different aspects. AI can also streamline and automate various logistics and transportation processes and analyze huge data sets. Companies that have already adopted AI are enjoying huge profit margins. According to Mckinsey's research, the logistics industry has adopted AI mostly across four business functions, including service operations, product and service development, marketing and sales, and supply chain management. These four business units cover 87% of AI adoption in logistics.