Artificial Intelligence in Business
How does Artificial Intelligence tie into business? To understand this, let’s first discuss Artificial Intelligence or AI. We create AI models by having them train and learn from data. Through this, they are able to find patterns to perform tasks previously thought of just as human endeavors.
What I specifically want to dive into is how this resource is being used in businesses, and it is significantly increasing. A way to look at it is AI learns to make decisions based on data. What a coincidence that businesses make decisions based on data and trends. Not to mention, the industry of AI startups itself is on the rise.
So even if you’re just looking into the business industry, AI is worth learning about. In fact, its influence is already present in many aspects of our lives that we may not have noticed.
Where is AI being applied to business?
Consumers
A business cannot run without its customers, and AI can optimize consumer experience, including yours right now.
Netflix, for instance, gathers your watch history and patterns, to match your behaviors with a database of what those shows/movies usually indicate a person likes to watch. They use this data to recommend new media, which in turn keeps users engaged.
Netflix holds thousands of films that can be overwhelming for consumers to choose from and search through. This problem is therefore combated with the use of AI. From The Economist Intelligence Unit report,
Nine out of 10 executives from around the world (94 percent) describe AI as important to solving their organizations’ strategic challenges.
The Economist Intelligence Unit
Marketing
If you’re looking into marketing, there are fields such as data scientists and marketing analysts that use AI in their field. The advertisements that follow you around websites are based on data such as your searches, which are automated targeted advertisements.
The Instagram ads you receive are made through predictions about what you are likely to buy based on your searches, likes, etc. This optimizes a companies’ marketing, so advertisements aren’t paid to show for customers who would not be interested. Firms also analyze content and the types of users that have more success in their field.
All this together makes for a more successful growing business and consumer satisfaction. And all these strategies can be applied to any industry, which makes them valuable for anyone.
Economics
Now let’s discuss some economics as it plays a large role in businesses.
Forecasting the economy is extremely difficult since there are many factors that play into it. AI is a useful tool to predict these instances, such as demand (consumer’s desire to purchase) forecasting. Additionally, automation lowers the cost of prediction.
According to
AI does not actually bring us intelligence, but a critical component of intelligence—prediction” For instance, AI has been shown to make the principles of supply and demand more individualized, which in turn makes prices
Agrawal A, Gans J, Goldfarb A. Prediction machines: the simple economics of artificial intelligence. Boston, MA: Harvard Business Review Press; 2018.
For instance, AI has been shown to make the principles of supply and demand more individualized, which in turn makes prices more accurately tailored. This means a company will better know at what price to sell their products that will be desirable to the public. Since they need to find a balance between making lots of profit and setting a price not too high for a customer.
A 2017 study by PWC calculated global GDP will be 14 percent higher by 2030 as a result of AI adoption, contributing an additional $15.7 trillion to the global economy.
Of course, there are many more applications of AI in business and within these categories.
Even if you are not interested in artificial intelligence, AI will likely have a presence in any field you go into.
Related
References:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7204330/#CR2
https://news.microsoft.com/transform/the-global-impact-of-ai-across-industries/
https://becominghuman.ai/how-netflix-uses-ai-and-machine-learning-a087614630fe
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