Shanghai FORUM 2019丨Zhu Wei: Reimagining the consumer market in the age of AI in Asia

Author: Release date:2020-01-10 16:55:21Source:+Add to My Favorites

Zhu Wei, Senior Managing Director, Chairman of Accenture Greater China

Reimagining the consumer market in the age of AI in Asia

Distinguished guests:

        Good morning!

It's a pleasure to attend the 2019 Shanghai Forum on behalf of Accenture, and it's an honor to be invited by Fudan University. This morning, it has been mentioned repeatedly that our world is going through an unpredictable change, which we would all agree as a major reason why we are here today. The change is reflected in various factors, including globalization, protectionism, China's emergence, populism, population transfer and so on, among which the grand leap of digital technology, as well as its transformative impact on business, economic and social community, stands at the center of attention for me and my colleagues, because it is closely connected to Accenture's business and all Chinese enterprises.

A simple briefing about Accenture. We are the only large management consulting and technology service company among Global Fortune 500. Instead of manufacturing or marketing hardware and software, we offer end-to-end service from corporate strategy to operation, including strategy planning and business restructuring, management and operation transformation, digital and IT services, BPO and outsourcing. For over three decades in China, we have provided a range of services to Chinese enterprises and supported their development. We are constantly working on how to truly understand the transformation brought by digital technology and how to seize opportunities in face of challenges. Tomorrow morning, Accenture and Fudan University will host a parallel forum “Reinvention of Industry”, and we welcome you to join us in exploring the journey on industry digital transformation. Today we'll share with you the leadership challenge posed by the transformation to policy makers, non-governmental organizations and corporate directors, with a focus on artificial intelligence.

To begin with, the chart above shows China's recent economic development. Frankly speaking, China's economy has taken off into a rosy domain through 40 years of reform and opening-up, but we also realize that the growth drivers in the past are losing momentum. Capital and labor alone cannot drive sufficient growth in China. The growth rate of fixed asset investment has dropped from high periods of around 30 percentage points to barely one percentage point last year. With an increasingly aging population, China is losing strength on its labor force. It is estimated that China's population of working age will shrink in the next 15 years. However, we also see hope in technological breakthroughs which continuously reshape the normal, creating new productivity and indefinite possibilities. The technology waves starting from 1950s have made huge difference on business, economy, and society, and we can see that the seventh wave is triggered by artificial intelligence. According to Accenture's research, AI has the potential to increase China's annual GDP growth rate by 1.6 percentage points until 2035, which is 7 trillion US dollars in total, and enhance China's labor efficiency by 27%. All these figures prove that AI is booming in China and will play a leading role in many industries, as China's investment and financing in AI and the number of AI patents already top the world. Since AI development requires abundant data, China has generated obvious strength in data accumulation. In all walks of life, China's big data volume is 5 to 300 times more than that of the US. Besides, AI has greatly facilitated corporate operation. For example, it helps subsidiaries of Ping An Group to filter out risky loans, and reduce 1000-hour human work on reviewing legal documents to a day. It also helps transnational firms including J&J and Accenture to choose the best candidate for the job.

However, we also found that people have different assumptions and fear towards the future of AI. The pessimistic view that AI is very likely to replace human beings is misleading and harmful in the short term. Gartner predicts that until 2020, AI enhancement technology will bring a commercial value of 9 trillion US dollars and cut 6200 million working hours, creating 2,300,000 jobs while only swallowing 1,800,000. Accenture has worked hard to find out the reason, and it turns out that AI will not substitute human beings, but rather complement us through collaborative intelligence, which we learn from enterprises benefited from the use of AI. According to our research, human and machine have different strengths, yet the lack of collaboration forms a “missing middle” here in between. Once we discover the missing piece and achieve the interaction between human and machine, this middle area will create many new jobs and release humans from works that are complex, dangerous or dull, offering them more opportunities and energy to do more interesting jobs. For example, coal mine giant Rio Tinto uses AI to operate mechanical equipment such as drilling rig, excavator and bulldozer, which prevents human operators from working in dangerous mining conditions. The company can collect sensor data from remote devices, which allows it to monitor the equipment more efficiently and safely. Also, at Accenture worldwide, nearly 17,000 jobs were replaced by automatic technologies. But at the same time, we have trained 180,000 staff in a year and a half through a new technology platform, enabling them with new skills and expertise.

In the past 20 years, technological breakthroughs have struck many enterprises. According to S&P, in the past 50 years, the average life of enterprises has lowered to around 16 to 17 years, and half of the existing enterprises at present will drop out from the S&P 500 in the next 10 years. Enterprises need to analyze from all dimensions to shift their strategy and find new strengths to work with AI. Today, we also have with us Doctor Athina, Accenture's Applied Intelligence lead who has drawn a 10-year development path for enterprises to fully tap the potential of AI. You will see that through different prongs and methods, enterprises will be able to constantly enhance their productivity and operate at their full potential in the next 10 years.

So how do enterprises transform new technology into strength? How do they perform better with the help of AI? Based on our research on leading AI applied companies, we have concluded 5 key principles in applying new technology. The first is that we need to change our mindset and design AI with empathy instead of using it solely for automatic convenience. Secondly, more experiments need to be done in order to accumulate data and experience, building a venturesome and experiment-based culture. For instance, Amazon encourages staff to do ground-breaking experiments and innovate with new methods and thinking rather than rest on its laurels. The third is the integration of isolated data. Although many enterprises claim that they have a large data, their data managers usually fail to utilize these data and their data analyzers do not have enough data. So how to help data circulate around all departments to form an effective supply chain is key to success. The fourth is that we need to put people at the core of our business and cultivate staff's collaboration skill with AI. Some of our client companies in Europe have launched a “3050 plan” which requires all staff to be assessed at the age of 30 and 50 respectively. The former assessment sets a plan that guides them to grow with the company, and the latter reviews their previous work because the companies believe that those who have made progress on collaboration with AI are more valuable, and they wish that they will continue to work for the company for another 20 years, until they are 70. Therefore, higher human-AI collaboration skills are also crucial to successful corporate application of AI. The last and the most important principle is leadership. Enterprises must lead responsible AI, with top-down consideration of its ethic, moral and legal implications to ensure that AI's judgment and actions are explicable and free from bias.

Technology itself is neither good nor evil, for the two ends are only used to judge how people or organizations use technology, so it's all about top-down leadership. Currently there has been increasing debate on AI around the topic of privacy, tolerance, equality, prejudice, surveillance and monopoly. For example, the Internet and social medias analyze users'personal data with algorithms to personalize dynamic push based on their interest and preference, which furthers people's misunderstanding that AI infringes their privacy. In addition, it is true that AI is very helpful in resume screening, but will it exclude qualified candidates for their gender or race? Will face recognition be used for surveillance? Last week, San Francisco has just banned official use of face recognition through legislation. Therefore, we need to keep three points in mind to apply responsible AI. The first is human at the center. The key idea of responsible AI is that AI should be human-centered. The second is AI's ethical design. We must ensure that technical personnel are trained, and we must give enough thought to AI's ethical standards in designing automatic and intelligent systems, so that we can eliminate prejudice, discrimination or other unjust moral standards in AI practice. Thirdly, we should strengthen the cooperation among the AI industry, the government and the public to reach a consensus on AIcs legal, social and moral standards, which helps to build a positive policy framework. Thus, responsible AI is also a leadership challenge for policy-makers especially in China, because although China has strength in its data volume and accessibility, loose data governance brings hidden problems. The business opportunities of data platforms and AI are so great that enterprises with skyrocketing valuations swarm into the market, growing from zero to 50 billion US dollars in only 3 years. The large number of stakeholders makes the supervision and regulation of AI a highly complicated and challenging job. Meanwhile, the technology and business community are constantly evolving, which poses serious challenge to a sound and flexible governance. But we are very happy to see that Shanghai Forum includes a parallel forum which allows us to talk about AI and humanity issues, and we look forward to inspirational and fruitful discussions.

Ladies and gentlemen, we are now facing an era of change. Technological breakthroughs have brought huge uncertainties to the world, but whether they brought challenges or opportunities depends on our capacity to truly harness our technology. If we can join hands to explore the best way of human-technology collaboration, we believe that we will go through the change that has certainly come with uncertainties and embrace a better world. Thank you!

This article is edited based on the recording and has not been reviewed by the speaker.

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