Businesses in Singapore that successfully apply artificial intelligence (AI) could create up to US$215bn in gross value added (GVA) by 2035, with business services, financial services, and manufacturing set to benefit the most out of the 11 industries studied in a new report by Accenture.
The report, titled ‘Artificial Intelligence: Driving Future Growth in Singapore’, was developed by Accenture Research in collaboration with Frontier Economics and identified 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.
According to the report, the eight strategies are AI strategy and leadership, which states that 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, reinventing human resource into HAIR, as the chief HR officer’s role will evolve to manage human-machine interaction, learning with machines as companies need to adapt their businesses to the changing nature of learning and employee training, appointing a chief data supply chain officer to construct an integrated, end-to-end data supply chain.
Businesses must also create an open AI culture, where trust, openness and transparency are key for human and machine relationships to work well, take the crowd into the cloud as 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 to harness the intelligence of dynamic, self-learning and self-governing machines.
Finally, businesses must measure their returns on algorithms as 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.
The report also measured 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, comparing 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.
Business services, financial services, and manufacturing are the three sectors of the industries studied that will gain the most GVA in an AI scenario, with US$46.3bn, US$45.8 bn, and US$29.8bn respectively by 2035. This translates to an additional US$121.9bn in GVA by 2035 for these three sectors alone.
“We firmly believe that technology-driven and analytics-led strategies, such as leveraging AI across industries, will bring tremendous growth opportunities for Singapore,” said Alison Kennedy, managing director of Accenture Strategy for the ASEAN region.
“To harness its potential, businesses will need to synthesise AI into their strategies and create a new playbook. This means adapting traditional company structures to AI, and more innovative thinking when it comes to both operations and business models. Clients must view technology as the competitive differentiator to seamlessly shift from doing things differently, to doing different things.”
The report also stated that AI can drive growth in three different ways, which includes intelligent automation as it creates growth through a set of features unlike those of traditional automation solutions, labour and capital augmentation as it results from enhancing the skills and abilities of existing workforces and physical capital and finally innovation diffusion, which trickles down throughout the economy in the form of increased total factor productivity.