Impact of AI on local businesses, economy

Artificial Intelligence (AI) continues to change the way businesses are being conducted. While AI offers significant opportunities for innovation and efficiency, it also raises ethical, societal and technical challenges, including concerns about privacy, bias, job displacement and the potential misuse of AI-powered technologies. In this interview, Nation Publications Limited Business Editor CHIKONDI CHIYEMBEKEZA engages Partha Dutta, a chartered accountant who has more than 15 years of international experience in finance, to explain the intricacies of AI and how Malawi can take advantage of this new phenomenon. Excerpts:

Q

:Would you explain what AI is and its relevance on the economy?

A

:AI refers to the simulation of human intelligence in machines that are programmed to think, learn and perform tasks typically requiring human intelligence. AI encompasses a wide range of techniques, algorithms and methodologies aimed at enabling machines to mimic various aspects of human cognition such as problem-solving, pattern recognition, decision-making and natural language understanding.

AI has numerous applications across various industries, including healthcare, finance, transportation, manufacturing and entertainment. Some examples of AI applications include personalised recommendations in e-commerce, fraud detection in banking, autonomous vehicles in transportation, medical diagnosis in healthcare, and virtual assistants in customer service.

Q:How has AI revolutionised business processes and how can Malawi leverage on this potential?

A

:AI-powered automation is revolutionising traditional business processes, enabling organisations to achieve greater efficiency and productivity. Machine learning algorithms analyse vast datasets at unprecedented speeds, facilitating data-driven decision-making and optimising resource allocation. In Malawi, for example, routine tasks such as data entry, customer support and inventory management can be automated, freeing up human capital to focus on higher-value activities.

AI technologies can optimise supply chain operations by enhancing visibility, forecasting demand and automating logistics processes. Smart sensors and Internet of things devices track inventory levels, monitor equipment performance and detect anomalies in real-time, enabling proactive maintenance and minimising downtime.

Q:To what extent can AI enhance innovation and boost revenue for businesses?

A

:AI fosters innovation by enabling the development of intelligent products and services that meet evolving customer needs. From autonomous vehicles to personalised recommendations, AI-driven innovations are disrupting traditional business models and creating new revenue streams. Companies in Malawi can embrace AI as a core strategic initiative to gain a competitive edge by delivering innovative solutions that drive growth and differentiation.

As per the various market reports, the global artificial intelligence market size was valued at $136.5 billion in 2022 and is expected to grow exponentially in the upcoming years backed by mounting investments in AI technologies, digital disruption and competitive advantage in this fast-growing global economy.

The impact of artificial intelligence on business is profound, as it is transforming the way companies operate and creating new opportunities for growth. With its ability to process vast amounts of data, it is able to boost key performance metrics such as revenue, productivity, business growth, digital transfor-mation and efficiency.

Q

:Should people be afraid of losing their jobs due to the usage of AI?

A

:AI can help automate routine tasks, freeing up employees to focus on more creative and strategic work. It helps to make better decisions by providing accurate and timely data analysis. In the case of Malawi, AI can improve the customer experience by personalising interactions and providing more tailored recomme-ndations and support.

AI can reduce costs by optimising processes and identifying areas for efficiency improvements. It can also aid in fraud detection and prevention by identifying patterns and anomalies in data and can also improve the accuracy and speed of predictive maintenance in manufacturing and other industries, reducing downtime and saving money.

It can also help to gain a competitive edge by identifying trends and opportunities that might otherwise be missed. Local firm can use AI to enhance cybersecurity measures by detecting and responding to threats more quickly and effectively. It can also enable businesses to develop and deploy new products and services more quickly, accelerating innovation and growth.

AI has identified opportunities within their data that would otherwise have been overlooked.

Additionally, 80 percent of businesses believe artificial intelligence has helped create jobs and that 72 percent of executives say AI has allowed its employees to focus on more meaningful work and that 64 percent of busness-to- business marketers consider AI a valuable asset to their marketing and sales strategies.

Q:What is the impact of AI on local industries such as banking and mining, among others?

A

:When considering applications of AI within the mining industry, we see a transition from a people-focused operation to a process-oriented one. This change can help to improve overall conditions for mineworkers, increase accuracy, decrease environmental footprints and provide faster decision-making abilities in an environment where any error could result in significant repercussions.

The banking sector has introduced AI to help with fraud detection, enhance customer experiences with online banking applications, personalisation of customer services, more efficient customer credit analysis and improvements with compliance. .

AI in accounting helps enhance the efficiency of internal accounting practices, purchase orders, invoicing, procurement, expense reports and accounts payable or receivable functions. Accounting is driven by data and in many instances, accounting-related tasks such as banking reconciliations are repetitive and time consuming.

Q:Are there potential threats for using AI in business operations?

A

:While AI offers numerous benefits to businesses, there are also potential threats and challenges that need to be addressed. One of the most significant concerns is the potential displacement of jobs due to automation driven by AI. Routine tasks across various industries such as manufacturing, retail and customer service are at risk of being automated, leading to job losses for workers in those sectors. The increasing reliance on AI and automation will require workers to have new skills and competencies to remain relevant in the workforce. However, there is a growing concern about a widening skills gap, where the supply of workers with AI-related skills does not meet the demand, leading to labor shortages and inequality.

Q

:In conclusion, what is the take-home message on the importance of AI on businesses?

A

:Technologies such as AI have already shown great potential to improve customer experience and engagement. More and more organisations are choosing to interact with their customers via voice interfaces and chatbots and as the technology improves, these applications will be able to conduct seamless customer service conversations at any time of the day or night.

For decades, companies have been forced to deal with industrial machines breaking down during the production process. Now imagine being able to perform predictive maintenance based on previously inaccessible insights into their operation.

That is just one of the benefits of machine learning algorithms, which, along with AI, are allowing companies to tap into volumes of information generated across their business units, partners and third-party sources.

AI is revolutionising the way businesses operate, enabling them to unlock new efficiencies, enhance customer experiences and drive innovation.