RESEARCH TOPIC-IMPACT OF

ARTIFICIAL INTELLIGENCE ON
BUSINESS STRATEGIES.

BY-Abdul shubhan khan

MBA (finance 1st year)
(19121056)
 ABSTRACT
The present age is perhaps the most energizing time of mankind's history where
mechanical advancements are occurring at the pace of the flicker of the eye.
Robots working in businesses, autos driving themselves, keen watches checking
patient's wellbeing, and computerized reasoning (AI) messing around better
than title holders are a portion of the mechanical developments under
computerized reasoning. Web today is brimming with AI-related articles, its
ongoing advances and its effect on human, culture, and business. 2019 has been
an astonishing year for AI, profound learning and AI. Pretty much every
innovative CEO professed to make their organization an 'artificial intelligence
organization'. The inquiry emerges for what reason is it so? For what reason
does each organization need to be an AI organization or need to obtain AI
organizations? How does AI affecting all the lines of business over the world to
such an extent that there isn't even a solitary field left where its effect can't be
seen? The interest in AI is demonstrating an upward direction in most recent 6
years and ought to continue as before for coming years. We have likewise
dissected the spread of AI is all unavoidable, from instruction to human
services, from home to industry, there is no spot where AI isn't being utilized or
investigated. In view of the appropriate responses, expectation can be made,
what will be the ability prerequisite for the employments of future dependent on
the improvement of AI in various lines of business. This will help the human
community to get prepared and accept the changes with the rapid infusion of AI
in human life and business.
KEY WORDS: Artificial Intelligence, Automation, Digitization, Business
Strategies, Innovation, Business
 INTRODUCTION
The selection of AI is bringing about a world which is more brilliant and
imaginative. Course and traffic mapping by Google maps, value estimation of
rides by Uber and Lyft, companions' tag proposals at Facebook, spam channels
in our email, suggestion for web-based shopping and disease location are just a
couple of instances of AI mechanical advancements improving our lives. The
unimaginable speed with which AI is entering each area is driving organizations
to get into the race to make their organization an AI organization. This is
additionally prompting business, strategists, pioneers, business visionaries and
agents to utilize AI to plan new procedures and make new wellsprings of
business esteem. . Hence, it is important to focus on wide-extending
ramifications of AI on governments, networks, organizations, and people. This
paper will address the persuasive scholarly accomplishments and developments
in the field of AI, its effect on the worldwide market and the vital targets of
associations, and the forming of business strategies with AI.

OBJECTIVES
TO FIND THE ANSWERS OF THE FOLLOWING QUESTIONS
 How is the development of AI affecting all ventures and divisions over
the globe? Which industries are driving this race of AI?
 Is this development disturbing customary business process? How is this
impact of AI in bunch parts changing the market and the future
employments?
  Why does every company want to be an AI company or want to acquire
AI companies? 
 REVIEW OF LITRATURE

1) According to the new growth economics, Neo-Schumpeterian Economics,

there are three major forces which drive the economic dynamics: innovation,
knowledge, and entrepreneurship (Hanusch 2006). Novelty and uncertainty is
the most distinguishing mark of Neo-Schumpeterian Economics; the most
visible form of novelty is innovation. Therefore, innovation (in particular,
technological innovation) is the first major driving force of economic dynamics.
The root of NeoSchumpeterian Economics is to learn and search experimentally
in permanently changing environments; thus knowledge (in particular, scientific
knowledge) is considered to be the second major driving force of economic
dynamics. Finally, the emphasis has been given on an entrepreneur; an
economic actor who kicks off economic development by introducing novelties.
Thus, according to Neo-Schumpeterian Economics, innovation, knowledge, and
entrepreneurship are the three major driving forces of economic dynamics
wherein the emergence of the new industries is driven by innovation, supported
by knowledge and tested by the entrepreneurial action. (Hanusch 2006).
Based upon the above three forces (innovation, knowledge, and
entrepreneurship), analysts design a three-dimensional research model to access
the overall impact of AI on businesses. The first dimension of three-dimensional
research model, research and innovation in AI, explore the success of AI
algorithms and investigate their deployment via commercially available
intelligent machines and services. The second dimension, influence of
automation and AI investigates the top AI organizations (companies and start-
ups) and their strategic initiatives to deploy/launch AI-based services in existing
and new industries. The third dimension, shaping of business contexts with AI,
explores how the AI is transforming/ disrupting the regular flow of business
activities.
The first dimension of analysis was chosen to be the theory and algorithms
behind systems. For this, they needed information regarding recent
developments in the field of data generation and processing, learning
algorithms, and successful AI applications. To obtain this information they
studied a large number of research papers published in reputed journals and
conferences in the last fifteen years (2003-2018), explored various dataset and
their providers, and identified commercially available intelligent machines and
services. The results obtained from this analysis are summarized. The success
and hype generated by the AI algorithms leads to the technological
transformation in the global market. This transformation is forcing many
existing companies to shift to AI and at the same time spawning a plethora of
AI-based start-ups. Thus, in the second dimension, they identified the AI-
motivated strategic initiatives of the corporate firms to grow faster with the
most advanced technology of AI. They performed financial analysis of some of
the top companies viz. Google, Apple, Amazon, Microsoft, and IBM working in
AI and related fields. Apart from IBM, all these companies are founded within
the last four decades and have managed to achieve top ranking at the global
platform. To get a better understanding of the impact of AI on businesses they
extended the analysis to include top AI start-ups in 2017 and 2018. They
scavenged a large number of research blogs, recent reputed conferences, their
sponsors, AI start-up acquisitions, market intelligence reports, stock market
websites, company websites and official blogs to select the above AI companies
(and start-ups) and perform their analysis. The integration of AI technology in
the business processes results in the reshaping of business context, thus, in the
third dimension they explored the influence of AI on the business contexts. The
relevant data were extracted from business press releases, annual reports of the
companies, innovation trend reports and research reports released by the
companies providing market intelligence such as Gartner, Forrester, and IDC
etc. From their analysis, they identified three business contexts that are majorly
affected due to the adoption of AI-driven systems viz. Customer Interaction,
Sales Platform, and Employee Skill Set.

2)According to Juniper research, digital market research, forecasting &

consultancy, “Chatbots will be responsible for cost savings of over $8 billion
per annum by 2022, up from $20 million this year.” (Foye 2017)
3) According to Oracle, multinational computer technology corporation, “With
regards to chatbots, which are in many ways the most recognizable form of AI,
80% of sales and marketing leaders say they already use these in their CX
(customer experience) or plan to do so by 2020.” (Oracle 2016)
4) According to Salesforce, cloud computing company, “By 2021, efficiencies
driven by AI in CRM will increase global revenues by $1.1 trillion and
ultimately lead to more than 800,000 net-new jobs, surpassing those lost to
automation.” (Einstein 2017).
5) According to McKinsey & Company, American worldwide management
consulting firm, “35 percent of what consumers purchase on Amazon and 75
percent of what they watch on Netflix come from product recommendations
based on algorithms.” (Mackenzie 2013)
6) On Singles' Day (November 11, 2017), Alibaba, the Chinese e-commerce
giant, hits $25.4 billion, smashing its own record from last year and cementing
it as the world's biggest shopping event. Product recommendation system:
Tmall Smart Selection, AI-powered chatbot: Dian Xiaomi and 200 delivery
robots are the AI technologies that helped Alibaba and its founder Jack Ma to
achieve these records.” (Bernard 2018)
7) According to Gartner Group, the world’s leading research and advisory
company, “By 2020, customers will manage 85% of their relationship with the
enterprise without interacting with a human.” (Marriot 2011) - Servion, global
solution provider, “AI will power 95% of customer interactions by 2025.”
(Nirale 2018)
8) According to International Data Corporation (IDC), the premier global
market intelligence firm: 25 - “By 2020, 85% of New Operation-Based
Technical Position Hires Will Be Screened for Analytical and AI Skills,
Enabling the Development of Data-Centric DX Projects without Hiring New
Data-Centric Talent” (Fitzgerald 2017). - “By 2023, 35% of workers will start
working with processes, performance metrics, and recruitment strategies.”
(Murray 2018)
 RESEARCH METHODOLOGY

VARIABLES OF STUDY: Dependent variable of our study is business

strategies and independent variable of our study is artificial intelligence (AI).
OBJECTIVE OF THE STUDY: To help the human society to get prepared for
the future challenges and accept the rapid changes occurring with the infusion
of AI in human life and business.
SAMPLE AND SAMPLE SIZE: 20 companies in which AI is been used or
have just started using AI in their business operations and their customers.
APPROACH TO SOLVE THE PROBLEM: Interacting with the employees of
some organizations, like the sales team, marketing team, HR team etc... to know
whether they see a significant impact on their job roles because of AI and how it
is affecting their respective jobs. Also taking the customer point of view
regarding use of AI in business and how it is affecting them by conducting
surveys, interviews and through observations. Also using some secondary data
like internet, journals, related books etc.
EXPECTED OUTCOME: To know wide-ranging implications of AI on
governments, communities, companies, and individuals (positive or negative)

FINDINGS

1) IMPACT OF AI ON TOP COMPANIES AND START-UPS

Right now, we distinguish the top AI organizations and afterward play
out their money related investigation to evaluate the effect of robotization
and AI on the worldwide market. We distinguished the top five AI
organizations from a rundown of 119+ corporate gatherings which took
an interest in NIPS 2018. The measure embraced for assessment is the
quantity of acquisitions of AI new companies in the last 9 years
(January 2010-January 2019).
We performed the financial analysis of the top AI companies by
analysing their financial worth in the last decade. Our analysis shows an
increasing trend in the share prices, EPS (earning per share), investment
in AI, and the net sales of all the top companies for the last decade (2009-
2018).
Aside from Apple and IBM, every other organization show a constant
increment throughout the years. The venture done in AI more likely than
not played a few job in the monetary development of these organizations,
however it was impractical to definitively discover a direct
correspondence between the two on the grounds that there can be
different factors behind the development.
Since new companies are considered as advancement and development
drivers of the economy, we accept that their examination would bring
about significant ends, important to the discovery of the effect of
mechanization and AI on plans of action. Along these lines, we acquired
the rundown of superior AI new businesses for the year 2017 and 2018
with the assistance of the CB Insights' Mosaic algorithm. The calculation
distinguishes the top AI new companies by assessing the variables like
profile, financing history, tech advancement, patent movement, group
quality, speculator quality, business model, mosaic score, financing
history and so forth.

First, we identified the different sectors in which these new-born

companies have managed to prove themselves as top AI starts-ups.
Second, we evaluated the total funding received by these sectors. Third,
we determined the geographical distribution of the top AI start-ups

Analysing the data of AI17 and AI18 industries, we find that the top five
industries where AI is maximally used are healthcare, cybersecurity, core
AI, business intelligence and marketing & sales. This analysis provides
an insight into the upcoming tendency of AI industries.

Next, we investigated the funds received by AI17 and AI18 in the past
few years. The total amount received in 2011 was $25.88
million, this increased exponentially by 71.13% in a short span of 6 years
resulting in $1866.6 million in 2016. Moreover, the complete financing
raised by AI18 is $12.74 billion, this is more than twofold (2.27 times)
the sum raised by AI17. This augmentation shows the rising enthusiasm
of speculators in AI. In light of the subsidizing and contribution of the
beginning up in various ventures, we recognized top sixteen businesses in
AI17 and AI18.

The figure clearly shows that cross-industry, cybersecurity, financial

services, and robotics are the four industries with maximum funds. These
 four industries have managed to attract 35% of the total funding in the top
200 start-ups.

From the geographical distribution ofAI17 and AI18. It is surprising to

know that out of a total of 195 countries in the world, AI17
and AI18 are located only in thirteen countries i.e. top global AI start-ups
are located in only 6.6% of the countries on the earth. In these thirteen AI
countries, there are only thirty states which are leading this AI revolution.
This will profoundly affect training, salary, living norms and
organizations. It is basic that the administrations, networks,
organizations, and people should take activities to build up their nation as
an AI nation so as to remain innovatively free and remain ahead in the
race of AI.

2) How AI has Impact customer interaction in business context?

Client interaction is the most fundamental type of correspondence between an
organization and its clients. Each and every association is another open door for
the organization to fulfil clients and hold them. In the ordinary procedure,
clients used to interface with the representatives of the organization, holding the
situation of retail shop official, salespersons, clerks, client relationship
supervisors and so forth for every one of their needs, items and administrations.
The combination of shrewd operators in the organizations is changing the client
collaboration from 'human-to-human' to 'human-to-machine'. "Chatbots" and
"remote helpers" are the savvy conversational operators equipped for leading a
human-like discussion with the through literary and sound-related technique
individually. These specialists are taking out postponements, human blunders
and give practically quick customized reactions to the clients.
- Gartner Group, the world’s leading research and advisory company, “By 2020,
customers will manage 85% of their relationship with the enterprise without
interacting with a human.” (Marriot 2011) - Servion, global solution provider,
“AI will power 95% of customer interactions by 2025.” (Nirale 2018)

Juniper research, digital market research, forecasting & consultancy, “Chatbots

will be responsible for cost savings of over $8 billion per annum by 2022, up
from $20 million this year.” (Foye 2017)
Oracle, multinational computer technology corporation, “With regards to
chatbots, which are in many ways the most recognizable form of AI, 80% of
sales and marketing leaders say they already use these in their CX (customer
experience) or plan to do so by 2020.” (Oracle 2016)
Salesforce, cloud computing company, “By 2021, efficiencies driven by AI in
CRM will increase global revenues by $1.1 trillion and ultimately lead to more
than 800,000 net-new jobs, surpassing those lost to automation.” (Einstein
2017).
The adoption of AI-based agents will reduce the need for the human force for
customer interaction. We agree that this will reduce the number of job
opportunities in this area, however, as predicted would also create new job
opportunities in new areas.
3) Ways in which AI has changed the traditional form of sales platform
The headway in innovation has presented and empowered the idea of electronic
trade plans of action (E-business). Various business associations have changed
from the customary strategy to the electronic technique to sell their items and
administrations. Computerization and AI is fortifying this plan of action by
giving a superior purchase offer understanding to the two purchasers and
merchants by means of deals forecast, suggestion motors, distribution centre
robotization, and imaginative web-based business stages. Amazon, Netflix,
Alibaba, and eBay are the brand names for web-based retailing which have
altogether changed the showcase through above AI forms. These merchants
manage the clients towards the purchase of an item by different methods viz.
customized computerized notices on the web, redone coupons/offer
recommendations, and particular messages/emails.
McKinsey & Company, American worldwide management consulting firm, “35
percent of what consumers purchase on Amazon and 75 percent of what they
watch on Netflix come from product recommendations based on algorithms.”
(Mackenzie 2013) - Rakuten, Japan’s largest e-commerce site, “Online
shopping businesses usually have hundreds, thousands of FAQs and users need
to find the answers from among those. By leveraging AI, we can provide users
with the responses they need quickly, 24 hours a day.” (Chatani 2018) - Forbes,
American business magazine, “On Singles' Day (November 11, 2017), Alibaba,
the Chinese e-commerce giant, hits $25.4 billion, smashing its own record from
last year and cementing it as the world's biggest shopping event. Product
recommendation system: Tmall Smart Selection, AI-powered chatbot: Dian
Xiaomi and 200 delivery robots are the AI technologies that helped Alibaba and
its founder Jack Ma to achieve these records.” (Bernard 2018)
These frameworks can tie down more deals by drawing in important clients to
visit the site all the more regularly/every now and again/ over and over. A
portion of the models utilizing mechanization and AI forms in business are item
recommendations by retail industry (for example Amazon), video
recommendation by the amusement industry (for example Netflix and
YouTube), melodies recommendation (for example Spotify and Last.fm),
suggestions of staple items (for example Big basket), suggestions of books (for
example Read geek). Taking everything into account, the mechanization and AI
frameworks are changing the business sectors from conventional to the
advanced ones and would keep on changing in not so distant future.

4) Do AI in business result in displacement of job?

The displacement of jobs has always been a major concern in the process of
innovation. Till now, we have seen that every sector wants to grab the
phenomenal opportunity to make their sector an AI sector. To fulfil this demand
there will be a rise in need of a “new” labour force which will build, develop
and productize AI in near future. To gain insights, we made use of the reports
released by LinkedIn (a business and employment-oriented service with 500+
million members) in January 2018 and 2019 (Petrone 2018, Petrone 2019,
Pattabiraman 2019). In these reports the identification of top twenty-five skills
was done by analysing the hiring and recruiting activity on LinkedIn for the
previous years. We observed, for the year 2018 out of all the identified top
skills, 36% (more than one third) of the skills are AI-related (Petrone 2018) and
similar results have been observed for the year 2019.
The level of interest for AI-related aptitudes can be assessed from an ongoing
report discharged by IBM, Burning Glass Technologies and Business-Higher
Education Forum (BHEF) (Markow 2017) and AI Index Steering Committee
(Shoham 2018). According to the report (Markow 2017), there will be a 15%
expansion in the quantity of employment discharges by 2020, which makes
around 2.7 million opening in the US alone.
According to the report, in the US, some AI-related jobs (data science and
analytics jobs) remain open for 5 to 10 extra days after the release of the
advertisement. This is in comparison to the average opening days of other job
advertisements. The situation is due to the unavailability of the required AI-
skilled candidates. This demand and supply problem of data professionals will
remain for years as the employer’s demand at least a master or a Ph.D. degree
with an additional 3 years of experience in the related sector (Markow 2017).
This is creating a big challenge in recruitment and thus disrupting product
development.
Also, according to International Data Corporation (IDC), the premier global
market intelligence firm: - “By 2020, 85% of New Operation-Based Technical
Position Hires Will Be Screened for Analytical and AI Skills, Enabling the
Development of Data-Centric DX Projects without Hiring New Data-Centric
Talent” (Fitzgerald 2017). - “By 2023, 35% of workers will start working with
bots or other forms of AI, requiring company leaders to redesign operational
processes, performance metrics, and recruitment strategies.” (Murray 2018)
Thus, AI-related skills are the skills of the future. There is a need for the
identification and implementation of strategies for the preparation of upcoming
future. We prescribe a couple activities that can be taken to make a huge pool of
talented AI-experts. At principal level, understudies can be presented to
required information centred projects: AI and AI courses. Information labs can
be built up at instructive organizations. Nations like China have as of now
began encouraging AI instruction at their schools and colleges (Xinhua 2018).
To make a solid information condition and influence AI most productively,
nation pioneers, division and innovation heads ought to be given AI
groundworks; this will make them mindful of the capacities and potential
advantages of AI-based machines and administrations.
To address this issue, countries should encourage the investigations which
identify the shifts in market demand (Sousa 2019) and equip employees with
relevant professional competencies such as training courses in areas viz. data
mining, machine learning, business intelligence, basic statistics and deep
learning, analytical reasoning, machine handling.
 CONCLUSION

We can see that AI isn't publicity yet has the capacity of changing the
worldwide economy through mechanical advancements, logical
information and innovative exercises. The dynamic development of
computerization and AI in the most recent decade is ascribed to two main
factors: the increasing availability of big data and hardware accelerators.
These factors are making AI the centre innovation liable for outrageous
robotization and availability and in this way, taking the world towards the
beginning of the fourth modern transformation. This will impact sly
affect governments, networks, organizations, and people. The outrageous
high ability of keen operators in different games, acknowledgment and
grouping assignments offer open doors for process advancement just as
item development. This is leading to the development of assistive
technologies and products for the disable and elderly people. This is also
advancing the toy and gaming industry which will enhance the
entertaining experience and develop cognitive & emotional intelligence
of children. Conclusively, the involvement of the autonomous technology
in almost every sector and launch of a large number of AI-based
machines and services would improve health, educational opportunities,
security, transportation, safety, trade and every other aspect of living.
However, there are some security, privacy and ethical concerns
associated with the use of AI technology which needs a lot of attention.
The actual intention is to grow with the most advanced technology of AI
and win the technological race. AI industries that will create more
opportunities in near future viz. healthcare, cybersecurity, core AI,
business intelligence and marketing & sales. The upward trajectory in the
investment in automation and AI in the last 8 years clearly implies that it
has the potential to change the economy. However, we can see that the AI
is confined only to a few regions in the world. Conclusively, AI will have
a profound positive impact on education, living standards, health and
businesses but, initiatives must be fostered towards the exploration of
ethical issues and reducing the AI divide among countries.
 Recommendations

 Organizations, frameworks, affiliations, and people should take

activities to build up their nation as an AI nation so as to remain creatively
free and remain ahead in the race of AI.

 To make a solid information condition and influence AI most proficiently,

nation pioneers, office and innovation heads ought to be given AI
preliminaries; this will make them mindful of the capacities and potential
advantages of AI-based machines and administrations.

 Countries should encourage the investigations which identify

the shifts in market demand and equip employees with
relevant professional competencies such as training courses
in areas viz. data mining, machine learning, business
intelligence, basic statistics and deep learning, analytical
reasoning, machine handling.

 Students can be presented to obligatory information cantered projects: AI

and AI courses. Information labs can be set up at instructive organizations.
So students should get well training and full information of AI so that they
should not face joblessness.