Singapore: Businesses that successfully apply Artificial Intelligence (AI) could create up to US$215 billion in Gross Value Added (GVA) in Singapore by 2035, according to a new report from Accenture. Business services, financial services, and manufacturing look set to benefit the most out of the 11 industries studied in Singapore.
To capitalise on the opportunity, the report ‘Artificial Intelligence: Driving Future Growth in Singapore’ identifies eight key strategies for successfully implementing AI that focus on adopting a human-centric approach and taking bold and responsible steps to applying the technology within businesses and organisations.
The report, developed by Accenture Research in collaboration with Frontier Economics, measures the potential economic impact of AI on GVA, a close approximation of gross domestic product that accounts for the value of goods and services produced. The research compared the economic growth rates of 11 industries by 2035 in a baseline scenario showing current assumptions of expected growth, to an AI scenario showing expected growth with AI integrated into economic processes.
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Of the industries studied, business services, financial services, and manufacturing are the three sectors that will gain the most GVA in an AI scenario, with US$46.3 billion, US$45.8 billion, and US$29.8 billion respectively by 2035. This translates to an additional US$121.9 billion in GVA by 2035 for these three sectors alone.
As a capital-labour hybrid, AI can drive growth in three different ways:
- Intelligent automation, which creates growth through a set of features unlike those of traditional automation solutions.
- Labour and capital augmentation, which results from enhancing the skills and abilities of existing workforces and physical capital.
- Innovation diffusion, which trickles down throughout the economy in the form of increased total factor productivity.
Regardless of industry, companies now have a significant opportunity to apply AI and invent new business capabilities for growth, profitability, and sustainability. To prepare for a successful future with AI, business leaders should consider the following eight strategies:
- AI strategy and leadership – attaining value from AI will demand recognition and action from the top of the company; therefore, the benefits must be made tangible to the C-suite and a roadmap is essential.
- Reinvent HR into HAIR – the chief HR officer’s role will not only be about managing human employees, but will evolve to also manage human-machine interaction – or Human AI Resources (HAIR).
- Learn with machines – to adapt their businesses to the changing nature of learning and employee training, business leaders must focus on the needs of their workforces, particularly in the area of agile skills development.
- Appoint a chief data supply chain officer – this position will be needed to construct an integrated, end-to-end data supply chain.
- Create an open AI culture – trust, openness and transparency are key for human and machine relationships to work well; business leaders must shape the corporate culture and guidelines to minimise the risks of a hybrid workforce while maximising the opportunities.
- Take the crowd into the cloud – the next phase of innovation will combine crowd-sourced data in the cloud with AI capabilities to create new and disruptive business opportunities.
- Step beyond automation – with recent strides in AI, companies need to take a step beyond to harness the intelligence of dynamic, self-learning and self-governing machines.
- Measure your return on algorithms – Unlike traditional assets that depreciate over time, AI assets gain value as time passes so CFOs will need new financial metrics to properly assess the ‘Return on AI,’ which could include the value generated from each algorithm or a combination of initial outlay and ongoing costs.
This report builds on previous research that examined the economic impact of AI across developed economies. The research revealed that AI could increase Singapore’s annual economic growth rate from 3.2 percent to 5.4 percent by 2035 and boost labour productivity by up to 41 percent by fundamentally changing the way work is done.
To access Artificial Intelligence: Driving Future Growth in Singapore, visit www.accenture.com/aiboostsprofitsSG