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Is the window for AI competitive advantage closing for early adopters?

AI early adopters believe industry transformation will rapidly follow their own AI-powered business transformation

As artificial intelligence (AI) technologies become easier to consume and get integrated into more products and services, early-mover AI competitive advantage will likely shrink for early adopters. They should discover creative ways to keep honing their competitive edge as more companies enter the field.

AI early adopters indicate the window for AI competitive advantage may be closing

Source: Deloitte analysis based on Deloitte's "State of AI Enterprise, 2nd Edition" survey of 1,900 AI early adopters in seven countries. Note: Percentages may not add up to 100 due to a small number of respondents who answered, "Don't know." Copyright © 2019 Deloitte Development LLC. All rights reserved. 

AI adoption and spending have been on a global tear over the past several years. In 2019, 37 percent of enterprises say they have deployed AI—an increase of 270 percent from four years ago.IDC estimates 2019 global spending on AI to be $35.8 billion, an amount that could more than double to $79.2 billion by 2022.2

In an era when everyone seems to be jockeying for an edge and looking for ways to ward off disruption, AI can be a powerful tool. Indeed, according to a recent Deloitte's global study of AI early adopters, almost two-thirds of executives believe AI technologies are enabling their companies to break away from the competition: 28 percent report that AI helps them “edge ahead,” while 37 percent say AI helps them “widen a lead” or even “leapfrog” ahead.3

AI has been strategic for building and keeping competitive advantage.

– Carlo Torniai, global director of Digital Product Development, Pirelli

Perhaps it’s not surprising, then, that 57 percent of these executives believe that AI will substantially transform their businesses within three years (see chart).

However, they take a more measured view of industry transformation, with 38 percent projecting that AI will substantially transform their industries within the same timeframe. AI early adopters surveyed believe time is short before industry competitors cut into the lead they’ve carved out through their AI adoption.

Do the increasingly crowded playing field and narrowing window for competitive differentiation mean that companies have missed the boat if they’re not already using AI? Not at all. In fact, cloud-based software and products and services with embedded AI are making it easier to adopt AI—even if organizations are short on funding and AI expertise.4 Emerging tools and frameworks are helping to automate AI processes that previously required intensive efforts by AI specialists, such as machine learning model selection, configuration, tuning, and deployment.5

Companies already in the AI game are likely feeling a heightened sense of urgency, too: Two-thirds believe AI will transform their industry within five years. They may be able to extend their window for AI competitive advantage if they build upon their early successes, hone their execution, and scale their efforts. Early adopters should consider strengthening their AI foothold by:

  • Building a solid data foundation for their company’s AI adoption—with high-quality, curated data that can be shared across initiatives
  • Devising a repeatable process for moving from experimentation to full-scale AI production systems
  • Expanding to other use cases: For example, if they’ve focused on optimizing internal processes, they may want to branch out to personalizing their customer experiences or enhancing their products and services with AI
  • Developing an AI strategy that’s comprehensive and companywide
  • Staying abreast of, evaluating, and adopting promising new AI tools and platforms as they emerge

Savvy early adopters may be able to keep their competitive momentum going, even as the AI playing field levels.

This charticle authored by Susanne Hupfer on July 10, 2019.

Endnotes

Pooja Singh, “Enterprise Use of AI has Grown 270 percent Globally over the Past Four Years,” Entrepreneur, January 22, 2019.
Worldwide Spending on Artificial Intelligence Systems Will Grow to Nearly $35.8 Billion in 2019, According to New IDC Spending Guide,” IDC, March 11, 2019.
Jeff Loucks et al., “Future in the balance? How countries are pursuing an AI advantage,” Deloitte, May 2019. To obtain a global view of how organizations are adopting and benefiting from AI technologies, in Q3 2018 Deloitte surveyed 1,900 IT and line-of-business executives from companies that are prototyping or implementing AI solutions. Seven countries were represented: Australia, Canada, China, Germany, France, the United Kingdom, and the United States.
Cloud-Based Services Are Making It Easier for Companies to Use AI,” Harvard Business Review, March 1, 2019.
Automated Machine Learning—An Overview,” Think Gradient, January 20, 2019.

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