Introduction: Will your job be replaced by Artificial Intelligence (AI) in the future? Which industries will be disrupted by AI technology? Will AI companies become a new “hotspot” for investment?
The development of AI technology, while attracting more attention and enthusiasm, has also raised a wide range of questions. Recently the Taihe Institute and the Institute of International Technology and Economy (IITE) of the Development Research Center of the State Council jointly held the second session of the “TI Tech Dialogue”. Experts from different fields had a lively discussion on the theme “Disruptive Reform of AI” and put forward ideas to help the development of China’s AI industry.
Key points of the discussion are summarized as follows:
List of Keynote Speakers:
I. AI Accelerates Industrial Development and Encourages Various Industries to Usher into a New Era of “AI +”
AI is still at Artificial Narrow Intelligence (ANI) or Applied AI stage at present, where its future development needs to be driven by data and supported by stronger computing power and algorithms. AI has superb machine-learning capabilities, adopts intelligent strategies and heuristic algorithms. It is equipped with “human-like” thinking capabilities to solve practical problems, which can dramatically reduce costs while greatly improving efficiency. AI is also predictive and iterative.
The technology industry currently has the highest use of AI at 37% with other industries accounting for a higher share including:
Professional services at 18.2%
Financial services at 16.6%
Retail at 9.1%
Healthcare and pharmaceuticals at 8%
The list is followed by industries including consumer packaging, telecommunications automotive and assembly, infrastructure, travel, logistics and transportation.
The concepts of AI have already been ahead of its applications. Things like mature business logic and profit model have yet to take shape. Hence most AI companies are still at loss.
Meanwhile many companies are only at the stage of “+AI” instead of “AI+”. In China, the main commercial applications of AI are as follows: intelligent taxi-hailing software and autonomous driving; unmanned store and online shopping; accounting robots used in accounting and bookkeeping as well as money collection and payment; AI monitoring and analyzing system used by wastewater treatment enterprises.
In the future, with the development of AI technology, many more companies are expected to use AI as a basic tool and combine it with traditional industries to create new business applications. “AI+” will become a crucial pathway for the future industrial upgrade.
II. The Challenge of AI to Human Work
Every disruptive technology has an impact on the existing labor structure and employment pattern. AI is considered as a “major threat” to workforce. Participating experts made following observations in this regard.
1. Jobs and Industries Likely to be Replaced and Disrupted by AI in the Future
There are four main categories of human jobs that are most likely to be replaced by AI:
First, the repetitive works. AI is far more efficient and accurate on highly repeatable tasks.
Second, works require "fast thinking". Fast thinking relies on human brain’s ability to make decisions and quick reactions, while AI's “five-second rule” can be used to replace human decision-making process.
Third, works require low level of coordination. This means the work is repetitive and manageable within a single person or two.
Finally, the high-risk works. For instance, occupations related to nuclear radiation and heights.
Based on the data attribute of AI, if data of one industry can be defined and the work procedures can be identified, AI will significantly transform the way the industry works.
For example, in the healthcare industry, the rise of networked medical devices, as well as assisted analysis of big medical data allow doctors to consult remotely, make diagnoses and also enable patients to see a doctor at home.
Then comes the financial services and insurance industry, where AI can predict fraudulent transactions, identify high-value customers, streamline the approval process for customer loans and improve the efficiency of credit assessment. Additionally, AI has the potential to overwhelm industries including logistics, retail, transportation, marketing, security and cybersecurity.
2. Industries that May Not be Disrupted by AI
With the development of AI, it is possible that all kinds of non-creative works can be replaced in the future. However, works involving creativity, personality and emotions are difficult to be replaced.
Th first example is the highly intellectual strategic consulting industry. Although AI can make predictions based upon data, the development of consulting market is a combination of human thoughts and behaviors, which is hard to quantify and make judgement. Second, the highly regulated industries that are characterized by the direct involvement of the Administration Department. The works in such industries are subjective and dynamic, which are beyond the reach of AI. Third, industries based on a combination of individual services and creativity, such as art, cultural and creativity industry, and film and television industry.
III. AI Companies at Different Development Stages Need Different Capital Injections
Enterprises can be generally divided into four stages: start-up, growth, maturity and decline. AI enterprises are of no exception. Enterprises at different stages need to be matched with corresponding financial services, whether it is a bank loan or equity investment,
For AI companies at early stages, bank loans require high collateral and guarantee, and the risk control model is of low risk, thus choosing venture capital (VC) or private equity (PE) funds is relatively appropriate. Financing options for companies at growth and maturity stages are wider.
In general, the complexity, long-term nature and high investment of AI technology and its R&D together make it more compatible for long-cycle investment. Nevertheless, on the other hand, this means more difficult for relevant start-ups to get social financing. If the central government wishes to encourage and guide the development of AI industry in terms of funding, new policy bank loan products based on the characteristics of AI shall be considered. Also, setting up guarantee institutions, funds or policy measures at the national level can also make relevant start-ups receive timely “blood transfusion” during the critical stage of R&D.
IV. The Task of China’s AI industry: Identifying “Pseudo-Intelligence” and Promoting “Real AI”
In the previous years, the AI industry stood at the apex of investment and received substantial investments.
With rapid changes in the industry and market in recent years, capitals have become more rational and a large number of “pseudo-intelligent” companies have been gradually eliminated. Nowadays science and technology among major powers is intensely competitive, leaving limited time to leverage advantageous resources on fundamental theories and key technologies.
Therefore, to develop and support the AI industry, we must first have the ability to identify whether it is a real or fake intelligence. This requires further improvement of our relevant theoretical system and knowledge structure. Secondly, we must focus on the immediate needs of people's livelihoods, such as strengthen the integration of AI in agriculture, healthcare and information security, and stick to the development concept of “leveraging technology to serve peoples’ needs”.
China has now formed the world’s largest fundamental information, data, communication network and computing system, equipped with an advanced Internet service base. This provides a sound foundation for the growth of AI.
Furthermore, China’s labor population will decline in the future, the course of improving production efficiency and upgrading productivity has become more urgent than ever for which AI-related technologies and applications provide key solutions.
However, the development of AI industry still faces challenges in technology, talents, law, governance, security and other areas. This requires the cooperation of multiple parties including industries, academia, government, research institutes. The establishment of a long-term effective communication and interaction mechanism can enable the rapid and healthy growth of China’s AI industry which ultimately benefits the entire international community.
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