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How AI Boosts Industry Profits and Innovation
UNLEASHING AI POWER
The steady decline in business profitability across multiple industries threatens to erode future investment, innovation and shareholder value. Fortunately, a new factor of production—artificial intelligence (AI)—is emerging that can help kick-start profitability.
Following an earlier Accenture Research study into the impact of AI on 12 developed economies, we assessed the effect of AI within 16 industries. Our research shows AI has the potential to boost rates of profitability by an average of 38 percentage points and could lead to an economic boost of US$14 trillion in additional gross value added (GVA) by 2035.
How AI will reverse falling profit growth
AI can reverse the cycle of low profitability across industries through three channels:
INTELLIGENT AUTOMATION
Whether enhancing the production chain with improvements to supply chain management or streamlining the sales process, AI offers huge advantages over traditional automation.
LABOR & CAPITAL AUGMENTATION
Workers can delegate low value-added tasks to AI and be more productive in their main tasks. AI can also help businesses maximize their asset utilization rates.
INNOVATION DIFFUSION
By accelerating the development of new products, AI helps to increase innovation, eliminate redundant costs and generate new revenue streams to increase profitability.
“#AI could boost average profitability rates by 38% and lead to an economic increase of US $14 TN by 2035.”
FUELING INDUSTRY GROWTH
AI has the potential to markedly increase industry growth. Information and Communication, Manufacturing and Financial Services are the three sectors that will benefit most from the application of AI.
Baseline
AI Steady State
Annual growth rates in 2035 of gross value added (a close approximation of GDP), comparing baseline growth in 2035 to an artificial intelligence scenario where AI has been absorbed into the economy.
Source: Accenture and Frontier Economics
AI offers unprecedented profitability opportunities. For example, manufacturing has a forecast share-of-profit increase of 39 percent due to AI-powered systems whose ability to learn, adapt and evolve over time can eliminate faulty machines and idle equipment.
Percentage increase in industry profits with AI, compared to expected baseline profit levels in 2035.
Source: Accenture and Frontier Economics
EIGHT AI STRATEGIES
To help organizations prepare their AI strategies to lead in the new, consider how to:
Augment
your people
- AI strategy and leadership from the top of the company is critical to attaining value from AI.
- Reinvent the CHRO role to manage humans and supervise AI.
- Adapt learning and training to fully exploit the combination of human and machine intelligence.
- Appoint a chief data supply officer to construct an integrated, end-to-end data supply chain.
Advance
your business
- Create an open AI culture to cultivate trust, openness and transparency that supports human and machine relationships.
- Step beyond automation strategies to use self-learning and self-governing machines for competitive advantage.
- Combine crowdsourced data in the cloud with AI capabilities to create new and disruptive business opportunities.
- Build new financial metrics to properly assess the “Return on AI”.
ABOUT ACCENTURE RESEARCH
Accenture Research shapes trends and creates data-driven insights about the most pressing issues global organizations face. Combining the power of innovative research techniques with a deep understanding of our clients’ industries, our team of 250 researchers and analysts spans 23 countries and publishes hundreds of reports, articles and points of view every year. Our thought-provoking research—supported by proprietary data and partnerships with leading organizations such as MIT and Singularity—guides our innovations and allows us to transform theories and fresh ideas into real-world solutions for our clients.