2021 – The Golden Year Of AI

Here’s a New Year’s resolution to keep an eye on: Investment in artificial intelligence (AI) will reach an all-time high in 2021.
The COVID-19 pandemic has upended the status-quo of daily life, forcing companies to take drastic measures to meet customers’ needs and adjust to a new normal. While AI has had previous cycles of investment with over-promise and under-delivery, 2021 will be different because life is different. Traditional industries will be forced to jump on board the AI train, taking advantage of more powerful cloud infrastructure since AI platform-as-a-service providers offer increased speed, availability, and scale through packaged architecture (hardware, software, networking), allowing businesses to make informed decisions without the need for significant capital investment or data science capabilities.
According to Babak Hodjat, V.P. of Evolutionary AI at Cognizant, “This time, the scale and scope of this surge in corporate attention to AI is much larger than ever before.” The Organisation for Economic Co-operation and Development (OECD) estimates that more than $50 billion was invested in AI from 2015-2020. Allied Market Research predicts $169 billion will be invested in AI technology throughout 2021 alone. This surge is because AI is now perfectly positioned to help businesses in all industries more easily interpret the predictions it generates, allowing companies to take the actions needed to transform their businesses and take full advantage of AI’s benefits.
The first AI wave (2015-2020) included several new e-business models with bolder algorithms which were able to tackle more ambitious problems. These have evolved to better understand, design, and test AI in the marketplace. Fast moving digital disruptors have devastated traditional, incumbent brick-and-mortar businesses. They improved online shopping experiences, automated customer interactions, provided real-time assistance, and through data mining, provided more detailed tactical information and predictive analytics. The American mall has been bulldozed. Amazon and Walmart are the only two viable retailers remaining.
AI has enabled this disruption through four new digital business models: E-Commerce (Amazon), On-Demand (Uber), Subscription (Salesforce), and Ad-Supported (Google, Facebook), which have all enhanced their value propositions. In 2021, the dominant US sales funnel will begin with Google and conclude with Amazon.
Covid-19 was the true acid test for these new e-business models. Companies like Amazon, Facebook, Google, and Salesforce pivoted and consolidated their e-business playbooks and prospered throughout the crisis, while “Digital Darwinism” forced traditional incumbents to perish. The internet was the first true catalyst, and the Pandemic became the second, accelerating AI implementation and transforming the way people now work, live, and interact with each other. The pandemic has also accelerated the innovative role of AI, pushing it into new frontiers, including remote work, image recognition, expert systems, and algorithmic technology.
The World Economic Forum estimates that Covid-19 has cost global business approximately $12 trillion. AI advances will easily recover that number through the end of 2021, making it an integral component of economic recovery and revitalization.
The expansion of AI will provide opportunities for many Americans to flourish in a changing economy. In the beginning, the biggest players in the AI market will lead – Amazon (marketplace portal), Apple (personal productivity), Spotify (freemium), Visa (fraud detection), Robinhood (stock optimization), Facebook (ad revenue generation), Google (personal search), and IBM (Watson). These big data companies will be the first to take advantage of AI to make smarter strategic decisions based on more meaningful AI-driven information.
Americans’ futures will forever be intertwined with AI since it focuses on the development and analysis of algorithms, which perform intelligent behavior with minimal human intervention. Let’s examine some current applications of AI, which just a few months ago might have seemed like science-fiction. Over a period of weeks, the general public embraced tele-medicine simply to avoid the risk of contagion. Subsequently, throughout 2021, holographic doctors, lawyers, and engineers will be making virtual appearances whenever and wherever necessary. And after endless Zoom calls, the time has come for fatigued workers to experience superior forms of advanced AI driven virtual communication.
AI will revolutionize operational business processes and entire business models, leading to transformational changes in the world’s economy. Many professional occupations will be impacted, if not eliminated, while others will be stimulated. At the operational level, AI and robots are cheaper than humans and their cost is rapidly decreasing. Robots can operate around the clock, increasing economic productivity and never tiring, giving rise to “lights out” plants, factories, and distribution centers that are fully automated. Robots are more precise and eliminate human error. Robots are custom built to suit the required size of any job or workplace. They can be used in highly hazardous conditions and offer superior manufacturing efficiency. In short, they are just better than any human can ever be.
The word ‘automation’ understandably strikes fear in millions of Americans who are concerned about their job security. But while AI technology is groundbreaking, disruptive technological advancements are not. From the Industrial Revolution to the dot-com bubble, we have faced and overcome massive societal shifts, and we can do it again. But this requires action. Lawmakers and business leaders must develop solutions that both support the innovations of our economy and protect American workers. Measures such as investing in education and adapting the social safety net will allow the United States to aid workers through the economic transformation and thrive in the new economy.
By the end of 2021, many of the operational level processes and models we accept as normal today will be augmented or replaced by a variety of intelligent AI systems. This train left the station in 2020 and will gather unprecedented steam in 2021. While there will no doubt be skeptics and critics, I suggest you hop aboard - the train isn’t stopping for anyone.

Keith Wright is a Professor of Accounting and Management Information Systems at the Villanova School of Business

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