New research released by Accenture reveals that companies with optimal artificial intelligence (AI) innovation strategies generate greater shareholder value. But less than one fifth of leading companies that leverage AI have achieved this performance in recent years. These companies have demonstrated high ‘AIQ’ by combining strong in-house innovation and external collaboration.
Accenture’s report “Boost Your AIQ: Transforming into an AI Business,” published in collaboration with the G20 Young Entrepreneurs’ Alliance, assesses both the Fortune Global 100 and Accenture’s list of Intelligent 100 pioneers in the development and application of AI technologies, for the period of 2010 to 2016. In order to measure their Artificial Intelligence Quotient (AIQ), the research analyzes the level of both their in-house capabilities and investments in AI as well as their commitment to partnering with outside partners.
The research finds that only 17 percent of companies fall into the high-performing “Collaborative Inventor” quadrant, while most (57 percent) are still seen as “Observers,” with relatively low levels of either in-house innovation or external collaboration on AI. Collaborative inventors have seen their enterprise value (a measure based on their market capitalization, debt and cash positions) rise by an average of 4.2 percent since 2013, compared to 2.3 percent for the remainder of the sample. Accenture Research estimates that companies that can move from “Observer” status to “Collaborative Inventor” could see their firm’s enterprise value increase by 90 percent, on average.
“Artificial intelligence is one of the most powerful technology innovations we have ever seen – transforming the way we work and live,” said Paul Daugherty, chief technology and innovation officer, Accenture. “Many companies are ready to go beyond the experimental phase of AI, leveraging it to improve productivity and create entirely new revenue opportunities. To become a high performer, they will need to both develop their own technology, data and people capabilities as well as become deeply involved in the broader AI ecosystem.”
Innovation Strategy to Leverage Artificial Intelligence
The research shows that companies must converge and integrate three main factors to achieve high AIQ:
- Technology: Not only do companies need to combine the constellation of sensors, deep-learning algorithms, natural language processing and other technologies – they must choose when to invest in proprietary applications. For example, a chat bot may improve efficiencies, but may not differentiate a brand as much as proprietary AI-based products and services.
- Data: AI requires vast volumes of data and securing that data is crucial to enable intelligent systems to learn and improve. Adding to the complexity, most data that is currently available to companies is unstructured or disparate. To overcome these challenges, companies must update their legacy systems to converge the data and embed AI at the intersection to create intelligent products and services.
- People: AI calls for a diverse range of expertise in different combinations – mathematics, data science, neuroscience, behavioral psychology, linguistics and other liberal arts – to both train and work with intelligent machines. At the same time, AI will have an impact on the jobs and roles of existing workers and many of the new skills do not yet exist in the market. The research suggests that companies must strike the right balance between reskilling the existing workforce and hiring external talent. This includes partnering with universities to create a talent pipeline – but also, with the emergence of the gig economy – creating a more flexible working environment to attract specialist freelancers.
“Success in AI cannot happen in isolation,” said Francis Hintermann, global managing director, Accenture Research. “Our analysis shows that creating AI innovations requires incumbents to open up their technology, data and talent to work with specialist startups and entrepreneurs. That requires them to transform their innovation strategies and organizational cultures.
