EXPLAIN E D

A GUIDE FOR EXECUTIVES

A TECHNOLOGY
REVOLUTION
LIKE NO
OTHER

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Everyone is talking about artificial intelligence (AI).
From boardrooms to factory floors, from call centres to logistics
fleets, and from governments to venture capitalists, artificial
intelligence is suddenly the hottest topic in town.

But is AI anything more than the latest technology buzzword?

The answer is yes. In fact, AI might just be the single biggest
technology revolution the world has ever seen.

This guide will explain why.

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Over the past twenty years or so, business
has faced its fair share of disruption. Indeed,
digital disruption is thought to have put more
than half of Fortune 500 companies out of
business since 2000.1 And now AI is set to
compound that disruption by shifting it up to
the next gear.

That’s because AI is what economists

call a general-purpose technology.
And these general-purpose technologies are a big
deal: think electricity and the internal combustion
engine. Their significance lies in the fact that they
cause disruption not only through direct
contribution to society, but also through the way
their spill-over effects enables a vast range of
complementary innovations. Electricity made
possible factory electrification, telegraphic
communication, and all that followed. And the
internal combustion engine gave rise to the
automobile, the aeroplane, and modern
transportation and logistics networks.
AI will impact society on a similar scale.

| 4
 AI has become viable today thanks to the
combinatorial effect of a series of fast-moving
technology trends (see page 34 for the evolution
of AI). Those trends are lowering barriers to entry
across a wide range of industries. A new wave of
AI-first businesses is flowing into the market,
shifting the competitive landscape for
incumbents. These new businesses are nimbler,
unencumbered by legacy technology systems,
distribution channels, or the need for workforce
transformations.

“AI is the ultimate

breakthrough
technology.”
Satya Nadella, CEO, Microsoft

| 5
Private investment is booming. Venture capital investment in AI
for the first nine months of 2017 totalled $7.6 billion2 (compared
with $5.4 billion for the whole of 2016). The registration of AI
patents is at an all-time high, five times the figure in 2006.3
And in the US, the number of AI start-ups has increased by
twenty times in just four years.

Governments and academic institutions are also looking to

ensure their economies maximise the benefits of the
technology. In the UK, a major government-commissioned
report estimated AI could unlock £630 billion for the country’s
economy.4 Five leading UK universities have also come together
to create the Alan Turing Institute, the UK’s national institute for
data science and artificial intelligence. And a new £30 million
National Innovation Centre for Data is being established at
Newcastle University, funded by both government
and academia.

It all adds up to a fast-paced, ever-shifting competitive,

investment, and research landscape. The bottom line:
AI is here, and every executive must sit up and take notice.

| 6
By 2020,
the AI market
will surpass
$40 billion.5
Constellation Research

| 7
WHAT IS
E

AI EXACTLY?

| 8
So you’ve heard all about AI, and you
know it’s a big deal. But what is it
exactly? Answering that question
isn’t as straightforward as it might
seem. In fact, there’s no single
accepted definition of “artificial
intelligence”. And that’s because
AI as we know it isn’t really a
technology in its own right at all.

In reality, it’s a collection of different

technologies that can be brought
together to enable machines to act
with what appears to be human-like
levels of intelligence.

| 9
Rather than add to the growing list of attemps to definitely
describe AI, we prefer to think of the technology as a
framework of capabilities. This is undoubtedly the best way to
understand what AI is, and to get a sense of the technologies
that underlie it. Our framework is centred around the
principal things that AI enables a machine to do.

There are four:

SENSE. AI lets a machine perceive the world around

it by acquiring and processing images, sounds,
speech, text, and other data.

COMPREHEND. AI enables a machine to understand

the information it collects by recognising patterns.
Much as humans interpret information by
understanding the patterns presented and their
context, though it does not derive true “meaning”.

ACT. AI enables a machine to take actions

in the physical or digital world based on that
comprehension.

LEARN. AI enables a machine to continuously

optimise its performance by learning from the
success or failure of those actions.

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WHAT’S IN A NAME?
COGNITIVE COMPUTING AND AI

Cognitive computing is a term widely

used by AI practitioners. So what is it?
And how is it different from AI?
Unfortunately, just as AI has not widely
accepted definition, cognitive
computing can mean different things
to different people. That said,
“cognitive” in this sense can, for the
most part, be treated as referring to an
AI’s perceptive capabilities – an AI’s
ability to sense and comprehend its
environment.

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The power of machine learning

An AI’s ability to learn is fundamental. Indeed, being able to

decide which actions are required to complete a task by
analysing data, rather than being explicitly coded to act in a
pre-defined way, is arguably what makes a system “intelligent”
and differentiates AI from other forms of automation.

And when the best AI systems are set the task of learning for
themselves, the results can be extraordinary. AlphaGo, the AI
developed by Google DeepMind, became the first computer
program to defeat a professional human player at the
highly-complex board game Go.6 AlphaGo was taught the rules
of play, and then shown thousands of different human vs.
human games so that it could discern the winning strategies
by itself. The result: victory over the legendary world Go
champion, Lee Sedol.

But even that wasn’t the end of

DeepMind’s Go success. The company
subsequently developed a second,
even more powerful, version of
AlphaGo - AlphaGo Zero7, which
taught itself winning strategies simply
by playing games against itself – with
no need to observe human players at
all. Moreover, the latest iteration of the
AI, AlphaZero, has gone even further.
AlphaZero proved it could learn chess

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by playing games against itself, surpassing human levels of
skill in just four hours. The really interesting part of this feat
was that AlphaZero wasn’t specifically designed to play chess
at all. Indeed, Jonathan Schaeffer8, professor of computer
science at the University of Alberta, and an expert in chess
systems, believes this may be the very reason it has been able
to develop unconventional strategies for winning. In this way,
AlphaZero represents an important step away from narrow
AI towards general AI (for an explanation of the difference
between narrow and general AI, see page 22).

This is what we call machine learning. And the reason it’s

so powerful, as Brynjolfsson and McAfee have observed9,
is quite simple. While we humans are fantastically skilled at
performing any number of different activities, we don’t
always know exactly how we do what we do. So, for example,
we might find recognising another person’s face very easy.
But we don’t fully understand the precise physiological
mechanisms that let it happen. And
that makes it very difficult to directly
code the capability into a machine.

Machine learning, on the other hand,

lets a machine learn to do it all by
itself. Indeed, one of the core
strengths of machine learning is
identifying patterns in very large
amounts of data.

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“ On Wall Street today,
more than 60% of all
trades are executed
by AI with little or no
real-time oversight
from humans.“
Christopher Steiner,
Automate This

| 14
A constellation of technologies

Machine learning lies at the core of AI systems. Its capability

to learn from raw data powers the visible manifestations of AI
that are becoming ever more prevalent today. So, whether it’s
predictive systems that can forecast what’s likely to happen,
natural language processing that can comprehend speech
and text in close to real time, machine vision that can
understand visual inputs with extraordinary accuracy, or
optimising search and information retrieval, it’s all based
on machine learning.

Figure 1 - Machine learning capabilities

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One critical advantage machine learning has over other
techniques is its tolerance of “dirty” data. That is, data
containing duplicate records, badly parsed fields, or
incomplete, incorrect, or outdated information.
These issues are a significant problem for businesses:
most executives will recognise all too well that dealing
with dirty data can be the bane of their professional lives.

Machine learning’s flexibility – it’s ability to learn and improve

over time – means dirty data can be processed with far
greater accuracy. It also means that the technology scales
very well, something that becomes ever more important in
our current age exploding data volumes.

More than 85%

of customer
interactions will
be managed
without a human
by 2020.10
Gartner

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The different ways a machine can learn

One of the real strengths of machine learning is that there are

different types of learning algorithms which can be used,
including supervised, unsupervised, and reinforcement.

SUPERVISED LEARNING. This kind of algorithm takes a labelled

data set (data that has been organised and described), deduces
the salient features that characterise each label, and learns to
recognise those features in new data. So, for example, you might
show the algorithm a large number of labelled images of cats,
and it would then learn how to recognise a cat and spot one in
any number of other, completely different pictures.

UNSUPERVISED LEARNING. This kind of algorithm requires no

predefined labels in the data it uses. It takes an unlabelled data
set, finds similarities and anomalies between different entries
within that data set, and categorises them into its own groupings.
So, you might show the algorithm a large number of unlabelled
images containing, say, cats and dogs, and it would sort images
with similar characteristics into different groups without knowing
that one contained “cats” and the other “dogs”.

REINFORCEMENT LEARNING. This kind of algorithm works

by trial and error, using a feedback loop of “rewards” and
“punishments”. So, when the algorithm is fed a data set, it treats
the environment like a game, and is told whether it has won or lost
each time it performs an action. This way, it builds up a picture of
the “moves” that result in success, and those that don’t.
DeepMind’s AlphaGo and AlphaZero (page 11) are good examples
of the power of reinforcement learning.

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Figure 2 - Puppy or bagel?

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PUPPY OR BAGEL?

How hard is it to tell an animal from an

item of food? Sometimes, much more
difficult than you might think. One of
the big trends storming the internet is
all about the odd similarities between
certain pets and snacks. Take the
puppies and bagels in the image
opposite, for instance. At first glance,
it can be surprisingly challenging for a
human to tell which is which. Not so for
an AI. Pass the images through an
image recognition API and you’ll find
the AI can distinguish the food from
the pets with impressive accuracy.11

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The artificial brain

So, how does machine learning actually work? Sitting behind

many of the extraordinary advances in recent years lies a very
advanced and elegant form of computing system – one
inspired by the functioning of the animal brain itself.
These systems are called neural networks, and they
underpin much of today’s cutting-edge work in AI.

A neural network comprises an interconnected set of “nodes”

which mimic the network of neurons in a biological brain.
Each node receives an input, changes its internal state, and
produces an output accordingly. That output then forms the
input for other nodes, and so on. This complex arrangement
enables a very powerful form of computing called deep
learning.

Deep learning uses multiple layers of filters to learn about

the significant features of data in a data set. It’s used for
examples, in both image and speech recognition. Using a
neural network, the output of each filter provides the input
for the next, where each filter operates at a different level of
abstraction.

In this way, deep learning systems can handle much larger

data sets than alternative approaches.

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Facial recognition

Deep learning neural networks use layers of increasingly

complex rules to categorise complicated shapes such as faces.12

Figure 3 - How a neural network recognises objects

LAYER 1
The computer identifies
pixels of light and dark.

LAYER 2
The computer learns
to identify edges
and simple shapes.

LAYER 3
The computer learns to
identify more complex
shapes and objects.

LAYER 4
The computer learns which
shapes and objects can be
used to define a human face.

FACES

CARS

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WHAT KIND OF INTELLIGENCE
ARE WE TALKING ABOUT?

When data scientists and others

talk about AI, they often use two
categorizations to clarify their
meaning. These are narrow AI vs.
general AI and weak AI vs. strong AI.

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WEAK AI
This describes “simulated” thinking. That is, a system which appears
to behave intelligently, but doesn’t have any kind of consciousness
about what it’s going. For example, a chatbot might appear to hold a
natural conversation, but it has no sense of who it is or why it’s
talking to you.

NARROW AI
This describes an AI that is limited to a single task or a set number
of tasks. For example, the capabilities of IBM’s Deep Blue, the
chess-playing computer that beat world champion Gary Kasparov in
1997, were limited to playing chess. It wouldn’t have been able to win
a game of tic-tac-toe – or even know how to play.

STRONG AI
This describes “actual” thinking. That is, behaving intelligently,
thinking as a human does, with a conscious, subjective mind. For
example, when two humans converse, they most likely know exactly
who they are, what they’re doing, and why.

GENERAL AI
This describes an AI which can be used to complete a wide range of
tasks in a wide range of environments. As such, it’s much closer to
human intelligence. Google DeepMind used reinforcement learning
to develop an AI that learned to play a whole range of different
games requiring different skills. The AI achieved human-like levels
of performance at 29 classic Atari video games using only the
on-screen pixels as its data input.13

SUPERINTELLIGENCE
The term “superintelligence” is often used to refer to general and
strong AI at the point at which it surpasses human intelligence, if it
ever does.

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“Instead of trying to produce
a programme to simulate the
adult mind, why not rather
try to produce one which
simulates the child’s?
If this were then subjected
to an appropriate course of
education one would obtain
the adult brain.“
Alan Turing, 1950

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Time to train

The “learning” part of a machine learning process is, perhaps

unsurprisingly, critical to the whole concept. Much as a human
brain must learn throughout childhood to understand and
process the information it receives, so must a machine learning
algorithm or model be trained to comprehend its environment.

When companies get the training wrong, the results can be

embarrassing – or worse. Microsoft’s now infamous chatbot Tay14
was an experiment in machine learning through social media
interactions. The AI was designed to learn to hold a natural-
sounding conversation by speaking with other Twitter
users. But she had to be quickly decommissioned
when a collection of trolls and racially biased
comments capitalised on her lack of
filters and taught her a series of racial
slurs and white-supremacist
propaganda. Microsoft’s
experience starkly highlights
the need for strong
governance and controls
in deploying AI systems
(for more on the
governance questions
that AI raises,
see page 66).

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Getting the training right takes more than just advanced maths.
Industrialised machine learning is an interdisciplinary
capability. It takes a blend of data science, engineering, and
user experience design with relevant domain knowledge.
None of these capabilities on their own will suffice.

Figure 4 - Industrialised AI as an interdisciplinary capability

Data science is Big Data and

necessary but not technology alone does
sufficient not get you there

MATHS ENGINEERING
Statistics Software Engineering
Linear and Discrete Parallel and Distributed
Algebra Computing
Functional Analysis API Management
Optimisation Model Management
Algorithmic Complexity Large scale Data
Predicate Calculus Management

EXPERIENCE
Augmented User
Experience Industrialised AI is
Domain Expertise an interdisciplinary
Information Architecture capability
Visualisation

Experience design
by itself is a lot of
day dreaming

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Fitting analytics into the picture

So where does analytics fit into all this? Perhaps the question
should be: how does AI fit into analytics? If we think of
analytics as the field of analysing data to improve decision
making, we can see how machine learning, along with other
statistical analyses, plugs in to the process. After all, the goal
of analytics is to derive insights from data – which is much the
same as the goal of machine learning.

Analytics, and any machine learning algorithms that support it,

can have different levels of sophistication depending on the
degree of insight required. So, at the simpler end of the scale
are so-called “descriptive analytics” which analyse historical
data to understand what happened and why. Then come
“predictive analytics” which use data to predict what will
happen in the future. Finally, at the far end of the scale, come
“prescriptive analytics” which not only forecast what will
happen, but tell you what you need to do about it.

By 2020, insights-driven
businesses will take $1.2
trillion per annum from their
less-informed peers.15
Forrester

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AI, robot

When it comes to thinking about AI, robots and robotics are

often front of mind. In the public imagination, that can mean
anything from Kubrick’s HAL, to Asimov’s mechanical men,
to Honda’s Asimo.

In a business context, it can mean both the automation of

manufacturing or service processes using mechanical robots –
think car assembly lines – and, increasingly, the automation of
administrative or service processes comprising both digital
and manual inputs using Robotic Process Automation (RPA).

Strictly speaking, because RPA is designed for processes that

never vary it doesn’t require any “intelligence” at all. So, for
example, if a business process involves a person manually
transferring data in a standard form from one system (for
example a piece of paper) to another, the process can be easily
automated through RPA with a form of keystroke emulation.
Accenture applied RPA to a large manufacturing client’s invoice
processing. The result: a 70% elapsed time saving; a 30%
productivity benefit; and 100% accuracy.

That said, AI techniques are now being increasingly used in the

emerging field of “cognitive RPA”. This enables a process with a
degree of variation to be automated, and thus vastly increases
the scope of RPA. That can include, for example, using
machine learning to train a machine to recognise text in
an image (known as optical character recognition).

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THE RISE OF RPA
Based on a recent report
by Transparency Market
Research, RPA is
expected to see a
compounded annual
growth rate of about
60.5% worldwide
through 2020.16

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Indeed, we at Accenture often recommend RPA as an ideal
starting point for a business that wants to begin an AI journey.
That’s because successfully using RPA means first acquiring
a detailed understanding of the process to be automated.
And that’s also the first step in designing a broader and more
sophisticated AI-powered automated solution. It’s also
essential in ensuring that existing, sometimes sub-optimal,
processes are not simply emulated in digital form, but are
re-engineered to exploit AI to the fullest extent possible.

An important point to note: RPA and cognitive RPA do

more than simply cut costs. They also bring new levels of
consistency and speed to a process, as well as offering 24/7
availability and the capacity to scale the process up and down
in line with demand. And it should always be remembered that
RPA replaces tasks, not people. Many organisations who use
RPA redeploy their workforces to activities that add more value
to the business – and are more interesting to boot!

We know this because we’ve done it ourselves. For all of the

17,000 jobs we’ve automated at Accenture, we’ve successfully
redeployed our colleagues in other areas of our business.
Indeed, a 2017 Gallup survey17 the US suggested that only 13%
of workers are worried about automation eliminating their jobs.
Nevertheless, the impact of RPA and AI on the workforce is a
sensitive issue which calls for careful management (for more
on the responsible use of AI, see page 63).

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“RPA has changed the way we
structure and allocate work,
allowing us to focus on
improvement initiatives...
By automating routine tasks,
we allow our skilled
employees to focus on the
more interesting and
challenging parts of their jobs,
which has the dual benefit of
satisfied employees and
improved customer
experience. Accenture
has been with us from the
beginning, helping us in
the exploratory phases of
RPA right through to the
implementation.“
Kristian Kjernsmo, Managing Director,
Circle K Business Centre at Circle K Europe

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THIS TIME
IT’S DIFFERENT

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AI is far from a new idea, it’s true.
The term “artificial intelligence”
was coined as long ago as 1956.18
And the history of the technology’s
development has been characterised
by waves of optimism followed by
disappointment and periods of inertia
(these have even been dubbed ’AI
winters’). Each previous breakthrough
has only ever partly lived up to the
hype it generated, and none have
managed to kick-start the technology
into the mainstream.

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 1940-1956:
The Birth of AI

Alan Turing created Conference held

1950 the Turing Test. at Dartmouth

So what’s
College where
the term Artificial
Intelligence was

different 1956 coined.

this time? 1956-1974:

The Golden Years

Figure 5 - 1958 Samuel’s checkers

The history of AI program used
Machine
Learning to beat
1959 human players.

IBM’s Shoebox
performed arithmetic
1961 by voice command.
Shakey became
the first mobile
robot “aware” of
1966 its surroundings.
ELIZA, an artificial
conversational
“therapist”
1966 created.

1974-1980:
AI Winter

Boom of Expert
1980-1987: Machines in
AI Boom industry like
the R1/XCON
to help sales
representatives
avoid errors
in product
suggestions.

1987-1994:
Second Winter

1994-present:
Modern Age
Two robotic
cars drove long
distance on the
1994 highway.

IBM’s Deep Blue

defeated chess
1997 champion. Kismet, a social
machine capable
of expressing
emotions is
2000 introduced.

Honda Asimo,
a personal robot,
2004 is released.

IBM’s Watson Introduction

beats best of Virtual
2011 Jeopardy! Agents with
Siri, Google
Now, and
the release
of IPSoft’s
2016 Amelia.

Google’s
AutoML lets AI
2017 generate AI.

The
guide was
2018 published.

| 34
The big change today is that we’re in an unprecedented
period of technology innovation across so many different
fields. Today’s AI applications can make use of virtually
unlimited processing power in the cloud. They can also
exploit a growing trend for custom-designing computer chips
for specific tasks, especially in analytics, which is enabling
even greater levels of computational efficiency and speed.
Consider, for example, the vastly increased processing power
that comes from using Graphics Processing Units (GPUs) in
place of Central Processing Units (CPUs). But Google has
taken it one step further, the Tensor Processing Unit (TPU)
delivering 30-80 times higher performance-per-watt that
contemporary CPUs and GPUs.19

Figure 6 - The combinatorial impact of technology

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| 35
When you add the decreasing cost of storage20 to the mix
(down from $0.5 million a gigabyte in 1980 to 3 cents a
gigabyte in 2015), plus the exponential growth in data
volumes with which we can train AIs, together with the
emergence of open source platforms and frameworks,
you’ve got a uniquely potent combination of technologies
and capabilities. It all adds up to a very powerful foundation
to give AI its critical mass for mainstream adoption.

Virtually all the leading technology giants around the world –

Google, Amazon, Facebook, Microsoft, Baidu, Alibaba, and
Tencent – are sharply focused on AI. Other entrepreneurs
and investors are equally keen. More than half of European
start-ups are focused on AI, and investments in AI businesses
are typically 20 to 30% higher than those in other
businesses.21

That’s not to say everyone agrees on precisely when AI will

reach its tipping point. Nor on whether we’ll see general AI
(as opposed to narrow AI) any time soon. On the one hand,
a survey of 350 experts by the Universities of Oxford and
Stanford22, concluded that there is a 50% chance of machines
outperforming humans in all tasks within 45 years. On the
other hand, a quarter of the eminent AI researchers surveyed
by Etzioni in 2016 said they thought superintelligence would
never materialise at all.23

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“Artificial intelligence would
be the ultimate version of
Google. The ultimate search
engine that would
understand everything on
the web. It would undertand
exactly what you wanted,
and it would give you the
right thing. We’re nowhere
near doing that now.
However, we can get
incrementally closer to that,
and that is basically what we
work on.”
Larry Page, 2000

| 37
Your competitors are probably
already using AI today

So we don’t have general AI yet. But, with the underlying

technologies accelerating at breakneck pace, narrow AIs
are already doing remarkable things in real-world
business applications.

As organisations continue to ramp up their use of AI, the

complexity of both the data and the work that it can handle
will only increase. To understand how this might play out in a
business context, it can be helpful to view the possible
applications of the technology through the following
framework (here illustrated fort he financial services industry).
The framework maps four different models for approaching AI
– efficiency; effectiveness; expert; innovation – against the
degree of data and work complexity involved.

In our work with our clients, we already see evidence of AI

being scaled and industrialised. Many organisations have been
running pilots over the last few years to test how AI might
impact their people, their processes, and their products.
Now, we expect those organisations to start scaling their
pilots across their enterprises. As many as three-quarters
of executives say that some kind of AI will be “actively
implemented” in their organisation within three years.24

All in all, the message is clear: AI is ready. And it’s a big deal.

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Figure 7 - A framework for understanding AI’s potential applications

AUGMENT
EFFECTIVENESS MODEL INNOVATION MODEL
Support seamless integration Enable creativity and ideation
and collaboration
Unstructured,
Volatile, • Account management • New-product creation
High-Volume
• Branch management • Marketing campaigns

• Security and • Discovery of microsegments/

identity management customer clusters

DATA
COMPLEXITY
EFFICIENCY MODEL EXPERT MODEL
Provide consistent, low-cost Leverage specialised expertise
performance
• Financial advising
• Basic banking transactions
Structured, • Risk & regulatory compliance
Stable, • Risk & regulatory compliance
Low-Volume • Client/prospect discovery
• Contact centres/Help desks
• Retirement planning
• Password reset (tech support)
• Product management
AUTOMATE
Routine, Ad Hoc,
Predictable, WORK Unpredictable,
Rules-based COMPLEXITY Judgment-based

| 39
PUTTING IT
INTO PRACTICE

| 40
Approached in the right way, AI will
be a new driver of economic value for
your business. But which way is the
right way? In such a fast-moving field,
it can be hard to see the wood for the
trees. The first step is to understand
the opportunity that AI presents. By
breaking it down into three avenues,
you can get a much clearer sense of
the route you should be taking. So,
that means you should be thinking
about how to use AI to shift
automation up a gear, about how to
augment what you do and the way you
do it, and about how AI innovation
might diffuse through your business
and beyond.

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1. Automating more

AI is the new frontier of

automation. With self-learning
autonomous systems that mimic
human behaviour exploiting
machine learning, computer vision,
and knowledge representation and
reasoning, AI can take automation
beyond merely rules-based
predictable work, right into the
areas we currently believe need
human judgement. That opens up
a huge number of new automation
opportunities (for more on the use
of AI in industrial automation,
see page 27).

| 42
 Figure 8 - The intelligent automation frontier

MUCH AUTOMATION … AND AI IS THE

BUSINESS IMPACT TRANSFORMATIONAL

OPPORTUNITY NEW FRONTIER OF

REMAINS… AUTOMATION

INTELLIGENT AUTOMATION

ROBOTIC PROCESS The application of AI to processes to

AUTOMATION enhance automation
Enterprise grade
FOUNDATION surface-level
Often augments human actions rather
than replacing them entirely e.g. use of AI
Project-level ad-hoc integration
models in human decision-making
automation, e.g. [BluePrism,
scripts, macros, Automation AI may be applied deeply in one business
batch programs, Anywhere, Fusion, area/process, or for shallow automation
[minibots] Jacada] and digital across many processes
technology enablers Cognitive RPA is the addition of AI to RPA,
[OCR, BPM] thereby making it more “intelligent” or
TACTICAL

versatile

PLATFORMS & AUTOMATION ORCHESTRATION

PROGRAMMED NATURE OF WORK SELF-LEARNING

STRICTLY RULES BASED JUDGEMENT BASED AUTONOMOUS
CONTROLLED UNBOUNDED
CONTAINED

| 43
ROBOT FOR RECYCLING

AMP Robotics has created a robotic

system called Cortex which uses
computer vision to rapidly pick
recyclable materials from a conveyor
belt of waste products. The system is
driven by an AI, called Neuron, capable
of distinguishing materials that can be
recycled from those that can’t – even
if they’re dirty or piled up with other
materials – using a video stream.25

2. Augmenting how you work

AI brings new levels of efficiency to the use of resources.

In practice, that means two things. First, augmenting human
workers’ judgement. And second, enhancing customer
experience.

#1 Working smarter. When it comes to augmenting worker

judgement, machine learning is capable of extracting more
meaning from very large and highly complex data sets than a
human ever could. An AI can thus see patterns, similarities,
and anomalies, where human experts see none. Consider
cancer detection, for example. Human specialists can

| 44
recognise several hundred malignant patterns in a cancer
scan, whereas an AI can recognise thousands.

Researchers at the University of Nottingham have already

created an AI that can predict which patients are likely to
have a stroke or heart attack within ten years. The AI
performed better than the standard methods of prediction
(scoring between 0.745 and 0.764 out of 1 as against 0.728
for the standard method).26

These are hugely impressive strides forward. But they

shouldn’t be taken as a sign that human expertise will be
superseded any time soon. The very best results are still
achieved when human experts work together with AI,
each bringing the best of their unique capabilities to bear
on a problem.

4 out of 5 executives (81%)

agree within the next two
years, AI will work next to
humans in their
organisations, as a
co-worker, collaborator
and trusted advisor.27
Accenture Technology Vision, 2018

| 45
#2 Better experiences for customers. Using AI, and
particularly the cognitive aspects of the technology, a
business can vastly improve the way it interacts with its
customers. That could mean using digital assistants and
chatbots to converse with customers 24/7 through social
media and digital platforms. Or it could mean making
personalised product or service recommendations on an
e-commerce site.

When South American airline Avianca wanted to enhance the

travel experience of its 28 million passengers, for example,
they quickly settled on the idea of a chatbot assistant.28
We at Accenture helped them create Carla, a Facebook
Messenger chatbot which uses AI to help customers manage
their travel arrangements. By holding natural-sounding
conversations with Carla on a messaging platform they’re
already familiar with, Avianca’s customers have a quick and
intuitive way to check in, review itineraries and flight status,
and get weather and other updates from the airline – with no
waiting on the phone for an advisor.

Moreover, creating a chatbot or digital assistant like Carla

needn’t cost the earth or consume a business for months on
end. Developing Avianca’s chatbot took just six weeks.
And almost straightaway it acquired over 20,000 unique
users who were holding something like 4,000 conversations
with it every month. Carla even managed to cut the average
check-in time for Avianca’s customers in half.

| 46
HUMAN–ROBOT
JOURNALISM IS ALREADY
HAPPENING

The Press Association and Urbs Media,

backed by Google’s Digital News
Initiative, are putting robots to use in
very interesting ways. Their Reporters
and Data Robots (RADAR) initiative has
created software which sifts through
national data sets and inserts localised
statistics into stories written by human
reporters. The stories, which to date
have covered everything from hospital
cancellations to problems with social
mobility, are then offered to local or
regional newspapers for publication.
Since a pilot began at the end of
November 2017, 20 newspapers have
published articles created by the
initiative, saving their reporters time
and lending more weight to their
stories.29

| 47
CHECKING IN TO
YOUR HOTEL WITH A SELFIE

AI’s customer experience

opportunities don’t begin
and end with chatbots.
Consider the possibilities
of facial recognition
technology for biometric
identification, for
example.

Singapore and San Francisco-based

GTRIIP30 have developed a document-
free mobile check-in application which
uses AI and biometric technology to let
hotel guests check-in to their rooms with
a fingerprint – or by simply taking a selfie.

| 48
3. Diffusing innovation

Innovation begets innovation. The spill-over effects of a

radical new technology can cascade through entire
economies, changing everything forever, and in ways that
were never foreseen. When electricity was first industrialised,
who could have imagined the vast energy demands of today’s
power-hungry world? And when the internal combustion
engine was created, who could have conceived of the speed
and scale of our interconnected global transport networks?

AI will impact society to a similar degree. Its innovations

will diffuse through businesses – and beyond to whole
economies. New, as-yet unimagined business models and
opportunities will be created. From the automation of tasks
we once thought needed human intelligence, to the ability
to see patterns in vast amounts of data, to new cognitive
human–technology interfaces, this technology will have
far-reaching and radical implications for our working and
personal lives.

Autonomous electric vehicles, for example, will completely

upend our current thinking about transportation. Just a few
years ago, driving was an activity thought to be so complex
that it would have to remain the preserve of human beings.
Now, automated transportation is becoming a reality. And,
from automotive companies, to logistics, to petrol sales, to
global oil, the direct effects of a shift to autonomous vehicles
will be profound. But consider, too, the effects of greatly

| 49
enhanced safety on vehicle design, on insurance needs,
and on medical and emergency response. Or what about the
impact on road network design, parking needs, car
dealerships, and petrol taxes? The sheer scale of the
societal impact from an AI innovation in just one industry is
breath-taking.

One of the revolutionary aspects of AI is its simplicity of use.

In other words, humans won’t need to adapt to it, or learn a
new set of skills to use it, making it perhaps unique in the
history of radical technologies. We will be able to interact
with AI through simple and natural language, whether by
voice or by text, or even through images. The contrast with,
say, learning to drive a car, or understanding how to use a PC
for the first time, couldn’t be starker. This has one very
important implication: it means the critical-mass adoption
of AI is likely to take hold even faster than previous
disruptive technologies.

The World Economic

Forum features will help
prevent 9% of accidents
by 2025 with the
potential to save
900,000 lives in the
next 10 years.31
| 50
AI FOR GOOD

Accenture has recently completed a

pilot program in the UK, which uses
its artificial intelligence
platform to help seniors
manage their care and
daily lives. The technology
was developed by
Accenture Liquid Studio in
London and is tailored for
older people living
independently.32

| 51
 W

THE ROBOT SURGEON

OPERATING ON LIVE
PORCINE TISSUE

In a breakthrough proof of concept for

robotic surgery, a Smart Tissue
Autonomous Robot (STAR) proved it
could stitch up the small intestine of a
living pig using its own vision, tools,
and intelligence. Intestinal sutures are
a particularly challenging task for an
autonomous robot, given the soft
tissue’s deformity and mobility. But,
with more consistent and leak-resistant
sutures, STAR was able to outperform
human surgeons who were given the
same task.33

| |52ARTIF
T DO I ACTUALLY NEED TO DO NOW?

Putting it into practice

With a clear view of the opportunities, you’re ready to put AI

to use in your organisation. First and foremost, that means
developing a strategy and a roadmap for your AI journey.
That roadmap must encompass both the re-engineering of
the affected business processes, and appropriate governance
controls. Above all, it must prioritise the high-impact AI
initiatives for your business.

An important point: it’s vital to start with the business case,

not the technology. In other words, think first about what you
want to do, not what the technology could do. Only then
should you add AI to the mix and analyse where it can add
value. That should include assessing the feasibility of using
AI, the effort vs. return, and the risks involved. It should also
include finding a willing business sponsor to push adoption
across your organisation. Because, after all, getting people
to change their behaviour is often the hardest part in
introducing any radical innovation.

AL INTELLIGENCE | 53
WHAT’S STOPPING SOME
COMPANIES FROM USING AI?

For all the undeniable activity, the fact

remains that most organisations are yet
to begin their AI journeys. And of those
that have started, half are still in the pilot
or proof of concept stage.34 So what’s
stopping them? The reasons are varied,
and not dissimilar to those encountered
with advanced analytics. For some, it
comes down to getting the right talent,
prioritising investments, and allaying
concerns about security. For others it’s
about defining compelling business
cases, strong enough leadership support,
and acquiring more general technology
capabilities.

| 54
Figure 9 - What are the top three barriers to AI adoption
in your organisation?35

Attracting, acquiring & developing

the right AI talent
Competing investment
priorities
Security concerns resulting
from AI adoption

Limited or no general
technology capabilities

Lack of leadership
support for AI initiatives
Unclear or no business
case for AI applications

Leaders Passives

Figure 10 - What is the level of AI adoption in your organisation?35

No adoption 54%

Pilots 23%

Adoption 23%

| 55
In developing an AI application, an agile “fail fast” approach
is invaluable. That means running pilots for each business
problem or opportunity to test the feasibility of your solution
and assess the technology options available to your
organisation.

An appropriate operating model – with Board-level approval –

is also essential. In our experience at Accenture, we find
creating a central “hub”, or centre of excellence, to provide
leadership and governance works best. The hub can then be
connected, via a series of “spokes”, to other parts of the
business (whether that’s marketing, risk, HR, or others).

This kind of hub-and-spoke model brings some really

important benefits to your AI journey:
• It offers economies of scale in selecting the technologies
and tools you’ll need, as well as in recruitment and talent
development;
• It enables a cross-organisation approach to building and
maintaining the necessary data ecosystem;
• It ensures consistency in standards, definitions, and
methods, and lets you disseminate best practices across
your organisation;
• It provides a rigorous means of measuring value and
prioritising opportunities;
• It ensures the highest standards of governance are applied
to all your AI projects.

| 56
By 2019, 40% of digital
transformation
programmes and 100%
of IoT programmes will
be supported by AI
capabilities.36
IDC

| 57
Keeping an eye on the road ahead

As you progress through an AI journey, keeping abreast of

the latest innovations and applications is essential. In such
a fast-moving landscape, things can change overnight.
Knowing what the AI leaders and the AI first-movers are doing
– and understanding the implications – will always be a hugely
valuable source of business intelligence.

So what might we expect on the road ahead?

In the short term, voice interaction will remain the hottest

consumer-facing manifestation of AI. And Amazon Alexa
and Google Home will continue their battle to be the primary
gatekeeper of the smart home, with Apple’s HomePod as the
latest entrant. Expect also to see questions raised between
platform providers and service providers about who owns
what, and who has access to what, when it comes to
customer data and relationships.

Voice is part of a more general trend for AI as the new UI.

In other words, that AI is becoming the channel of choice
for customer interactions, whether that’s over chat services,
messaging, or smart home devices. Its primacy means
organisations must think very carefully about how they use
it and how it represents their brand. Those treating it as an
afterthought or add-on will quickly come unstuck.

| 58
Within 5 years more than
half of customers will
select services based on a
business’ AI rather than its
traditional brand.37
Accenture Technology Vision, 2017

| 59
One important implication of this shift is that AI teams must
be interdisciplinary, and not simply technical. Microsoft, for
example, employs a whole team, including writers and
psychologists, to give its operating system AI, Cortana,
its unique personality.

Look out, too, for developments in the way brands advertise

through devices like the Amazon Echo and Google Home.
Voice ads are still very much in their infancy, and a great deal
of trial and error is still to come. Interrupting people in their
homes to sell them services without being asked will more
than likely anger customers. Indeed, Amazon updated its
Alexa developer policy in April 2017 to ban all adverts except
those in music and flash briefings.38 So innovative ways to get
people coming back to a brand’s voice utility will be needed.
Quid-pro-quo bargains will likely be struck with customers –
their attention in return for something back.

A key point is this: if the state of AI technology isn’t already

streets ahead of our collective imagination, it soon will be.
That makes it very different from previous technology
revolutions. What’s possible with AI will only be limited by
our willingness to experiment – and use it.

| 60
75% of business
executives say
AI will be actively
implemented in
their companies
within three
years.39
2017 Economist
Intelligence Unit Report

| 61
EXPLAINABLE
AI

| 62
The huge opportunities and benefits
that AI offers don’t come risk free,
of course. What kind of innovation
does? But it certainly pays to begin
an AI journey with a clear-sighted
view of what the risks might be for
an organisation.

| 63
So, what are they? We think there are four principal risks that
must be considered up front. These relate to trust, liability,
security, and control:

TRUST
How do we demonstrate to citizens that an AI is safe to use?
How do we avoid biases, unconscious or not, being written
in from the outset? The answers to these questions lie in
transparency and accountability. Decisions taken by an AI
must be open to appeal and interrogation.

LIABILITY
What happens when an AI makes an error – or even breaks the
law? Who is legally responsible? Changes to legislative and
regulatory requirements will need to be monitored carefully.

SECURITY
How do we prevent unauthorised or malicious manipulation of
an AI? Security becomes paramount, and is compounded by
the increasing use of open source code.

CONTROL
What happens when a machine takes over a process? How does
a human take it back if they need to? Careful thought is needed
about when and how control is transferred between humans
and AIs. For example, it is all very well providing a human riding
in a self-driving car with the means to take control but if they
are not paying attention 100% of the time, they will be unlikely
to intervene fast enough in a critical situation.

| 64
72% of executives
report that their
organisations seek
to gain customer
trust and
confidence by
being transparent
in their AI-based
desicions and
actions.40
Accenture Technology Vision,
2018

| 65
Accenture Launched “Pinterest For AI
Education”, a new technology platform
to train more than 180,000 of its
employees globally in the latest digital
technologies in just over 20 months.
It now plans to use the interactive
platform with clients to help develop
their IT workforces in critical areas such
as digital, cloud, security and artificial
intelligence. The Accenture Future
Talent Platform integrates learning
services and curriculum on as-a-service
and mobile platforms to help
workforces move away from traditional
training and foster a culture of
continuous learning.41

These issues are something we’ve given a great deal of

thought to at Accenture. Our strong recommendation is to
take a “human first” approach to AI thinking. And that means
adopting a framework for what we call “Responsible AI”. This
framework recommends mitigating the risks of using AI with
four imperatives: govern; design; monitor; and reskill:

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01. GOVERN
Create the right governance framework for AI to flourish.
Anchor it to your organisation’s core values, ethical guardrails,
and accountability frameworks.

02. DESIGN
Build trust into your AI from the outset by accounting for
privacy, transparency, and security from the earliest design
stage.

03. MONITOR
Audit the performance of your AI against a set of key metrics.
Make sure algorithmic accountability, bias, and security
metrics are included.

04. RESKILL
Democratise the understanding of AI across your organisation
to break down barriers for individuals impacted by the
technology.

It’s also vital to remember that humans can be susceptible to

unconscious bias. And that has big implications when it comes
to coding and training an AI and selecting the data sets it will
use. This is an area in which general standards may be
required. Collectively, we may need to aspire to a higher
degree of responsibility from our AIs than we would
necessarily demand from human colleagues.

| 67
The need to explain

There is one thing above all that will ensure public trust
is maintained when an organisation starts using AI:
“explainability”. In other words, being ready to explain how
and why an AI came to the decision it did. This is something
that certain regulated industries are already familiar with.
Financial services institutions, for example, are required to
explain the decisions they take that affect their customers.

But there’s also a broader issue here: humans are more likely
to trust something they understand. So “explainable AI”
becomes a vital part of any AI strategy.

DARPA’S EXPLAINABLE AI
CHALLENGE

DARPA, the Defense Advanced Research

Projects Agency, has launched an
explainable AI (XAI) programme with
the goal of creating a suite of machine
learning techniques which produce
more explainable models. The models
will be combined with interfaces
capable of translating them into
understandable and useful explanations
for human users.42
| 68
In fact, that’s easier said than done. Machine learning is often
by its very nature a “black box” exercise. In other words,
it operates in ways that can make it very hard to explain how it
arrived at the outputs it produced. But many AI practitioners
and data scientists are thinking about this question, and new
approaches offering better explanations of the science
underlying AI decisions will likely soon emerge.

In the meantime, there are some practical steps that every

business can take now to make their AI more explainable:

01. INVENTORY
Think about the decisions that are or will be taken by AI in your
organisation. Which of them would require an explanation – or
create an expectation of one? Do they relate, even indirectly,
to key areas like employment, recruitment, lending, education,
healthcare, housing, inclusion, or safety?

02. ASSESS
Consider any quantitative and qualitative models that are
already providing explanations for decisions taken by AI.
How are they performing for their intended recipients?

03. DESIGN
Revisit the design principles used for your AI. How could they
make the process of making decisions more human-centred
and understandable?

04. AUDIT
Review the data. How do you ensure your AI is using data sets
that reflect the evolving nature of your workplace?

| 69
GET THE BIGGER
PICTURE

| 70
No person is an island. And no
business is either. The actions we
take can reverberate way beyond the
boundaries of a single organisation.
So, given AI’s revolutionary potential
and far-reaching spill-over effects,
the broader societal implications of
using it can’t be ignored.

This means collectively addressing

some important questions. How do
we make sure people have the skills
they need to thrive in an AI-driven
world? How many existing jobs will AI
replace? How many new jobs will be
created? Will some people need to
find income and fulfilment from
sources other than work? What new
legal frameworks are needed when
AI is taking the decisions? Might
humanity even face an existential
threat when AIs become more
intelligent than their creators?

| 71
The skills question

When it comes to skills, governments have for years

promoted the uptake of STEM subjects. This must be
maintained and accelerated, with the addition of new data
and analytics elements into school and training curricula.
That shouldn’t just apply to STEM subjects either – the
importance of data and analytics to other disciplines must be
emphasised with equal force. Drives to increase the numbers
of apprenticeships, such as that promoted by the UK
government, should play a part too.

Industry also has a vital role in upskilling workforces for the

AI age, of course. And that will take considerable investment.
But businesses have both an economic incentive (to ensure
a ready supply of talent) and a moral obligation (to use AI
responsibly) to do so. What’s more, industry involvement
becomes even more vital if the speed of AI-driven change
means our existing education and training bodies can’t keep
pace on their own.

Occupations that require some of humanity’s most intrinsic

qualities – creativity, empathy, kindness, care – may in any
case be some of the last to be affected by AI. There is little
chance of an AI replicating these core aspects of human
intelligence any time soon. So there will be many important
and rewarding career paths which will remain open to people,
even if they can’t necessarily outsmart the machines.

| 72
62% of workers
think AI will have
a positive impact
on their work, with
most employees
falling into the
high skill/high
willingness
category.43
Accenture

| 73
The jobs question

Whether AI will ultimately have a positive or negative net

impact on employment is a big question, and not one that
can be answered in a Pocket Guide. But we at Accenture are
broadly optimistic. If organisations can use AI in a responsible
and human-centred way, and if they can focus on augmenting
human intelligence as much as replacing it, we think the
impact will be positive. Approaching AI in this way will allow
human workforces to focus on the more interesting,
challenging, creative, and interpersonal parts of their
jobs – and leave the humdrum, boring, repetitive parts
to the machines.

We’re not alone in our optimistic outlook. And that’s because

many people think AI will end up creating more jobs than it
destroys. Those that take this view look at the history of
previous technology revolutions and see that, in every case,
there was ultimately a net increase in overall employment.
That increase often skipped a generation, admittedly.
So, whereas an older generation of workers might
have lost out from the introduction of a new
technology, history suggests the next
generation benefitted. In the long run,
this argument goes, AI will have the same
net positive impact.

| 74
THE EFFECT OF AUTOMATION
ON MANUFACTURING

How has the automation of

manufacturing processes impacted
employment? You might think the
widespread use of industrial robots
means there’d be a great deal fewer
workers needed today than in the past.
Not so, according to a recent report
from Germany.

Over the past 20 years, Europe’s

strongest economy and manufacturing
powerhouse has quadrupled the
number of robots used in its industries.
In 1994, for example, Germany had
around 2 industrial robots installed
for every thousand workers. By 2014,
this had risen to 7.6 robots for each
thousand workers (compared to just
1.6 in the US).

| 75
In the country’s thriving automotive
industry, between 60 and 100 additional
robots were installed for each thousand
workers over that period.

Automation? Close to nil. Researchers

from the Universities of Würzburg,
Mannheim, and the Düsseldorf
Heinrich-Heine University examined
20 years of employment data and found
that, despite significant growth in the
use of robots, there hadn’t been any
dent in aggregate German employment:
“Once industry structures and
demographics are taken into account,
we find effects close to zero”.44

| 76
 Not everyone is so sanguine, it’s true. Such people argue
that this time it’s different. They point out that, whereas many
previous technology revolutions involved the mechanisation
of manual labour, AI involves the automation of far more
fundamental cognitive processes. So, while mechanical
automation might replace a set of specific tasks (tractors
replacing horses in agriculture for example), cognitive
automation is so broad as to strike at the core competitive
advantage of human beings: their ability to think. In the long
run, this argument goes, we should brace ourselves for
widespread job losses.

With such a broad array of views, a quick resolution to the

jobs question is unlikely. The debate will run for some time yet.
In the meantime, it is incumbent on both government and
industry to make every effort to ensure responsible and
human-centred approaches are taken to the use of AI.

“In 2020 AI will create 2.3

million jobs 2017 Economist
Intelligence Unit Report
whilst eliminating 1.8
million, making 2020 a
pivotal year in AI-related
employment dynamics.”45
Gartner

| 77
The legal question

There is no doubt that legal and regulatory frameworks will

need to evolve as AI takes an ever-greater hold in business,
industry, and beyond. One of the first and most pressing
areas will likely be the law surrounding autonomous vehicles.
Consider legal areas like personal injury, negligence, and tort.
Who, for example, will be liable if an autonomous vehicle
crashes with no driver at the wheel? The vehicle
manufacturer? The software provider? The human
occupants?

And, what about the legal implications of AI design? When

an autonomous vehicle faces two equally tragic choices
(saving the life of its human occupant, say, against saving
pedestrians on the street ahead) the AI’s design will need a
clearly thought-through legal framework for deciding which
option to take. This cuts right to the core of some of the most
difficult legal and moral questions there are.

Competition law may well need to adapt too. Pricing

algorithms are already widely used by online retailers,
enabling much faster and more sophisticated price
adjustments. Amazon reputedly changes the prices of some
items many times each hour, equating to millions of
individual price changes every day.46 Any decision made
by AI in an open marketplace will need to be transparent
and explainable.

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The existential question

No-one knows for sure whether AIs will ever surpass a

human’s general intelligence. Even less, what will happen if it
does. And among those experts who think general AI is a real
possibility, opinions diverge hugely on when it might happen.
We feel confident in saying that despite AI’s truly amazing
potential for humanity, general AI is a long way from being a
reality. But that doesn’t mean we shouldn’t be thinking about
its consequences and implications. So the establishment of
academic and industry-sponsored bodies to examine the
question, such as the Future of Humanity Institute at Oxford
University, is a very welcome development.

| 79
LET’S MAKE IT
HAPPEN

| 80
So that’s AI. We hope this guide
has given you a clear sense of
its underlying technologies,
its game-changing capabilities,
and its potentially revolutionary
implications. As it gains critical
mass, AI will change forever how
we work and how we live.

It’s a completely new factor of

production, and it’s going to drive
business growth in important ways,
whether by extending automation
into previously human-only arenas,
augmenting our work to drive new
levels of effective decision making,
or diffusing exponential levels of
innovation through organisations
and beyond.

| 81
| 82
Businesses big and small are already experimenting with AI
solutions to drive new growth. They’re finding ways to make
their workers smarter. They’re discovering new kinds of
interactions with their customers. And they’re starting to
build AI machines that can work faster and better than their
human counterparts.

Like any radical innovation, there will be risks in starting an

AI journey. And there may be unintended consequences
along the way. That’s why taking a responsible approach
to the technology is so important. Trust, transparency,
and security must be built into AI design from the outset.
And the need to explain must always be front of mind.

In the end the message is simple. AI is here. It’s real.

And it’s time to sit up, take notice, and take advantage.

| 83
Recommended Reading
The Second Machine Age by Erik Brynjolfsson and Andrew McAfee
Machine, Platform, Crowd by Erik Brynjolfsson and Andrew McAfee
Life 3.0 by Max Tegmark
Human + Machine: Reimagining Work in the Age of AI by Paul Daugherty & James Wilson
(forthcoming March 20th, 2018)
Homo Deus by Yuval Noah Harari
The Quest for Artificial Intelligence by Nils Nilsson
The Master Algorithm by Pedro Domingos
The Future of the Mind by Michio Kaku

I would like to thank Accenture colleagues too numerous to mention for their help formulating the concepts
described in this publication; and Lucy Frost, Noor Sajid, Caryn Tan and Alexandra Vernon for their assistance
with research and design.

Sources
1
Nanterme, P. (2016, January 17). Digital Disruption Has Only Just Begun. World Economic Forum.
https://www.weforum.org/agenda/2016/01/digital-disruption-has-only-just-begun/

2
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