How will Artificial Intelligence (AI) transform businesses in Latin America?

How will Artificial Intelligence (AI) transform businesses in Latin America?

There is also a fear of people being replaced by robots with recent technological advancements and the overflow of information about Artificial Intelligence (AI).

However, a careful analysis reveals that AI has been an integral part of our daily lives for quite some time now and it has reduced some human activities but not eliminated jobs or entrepreneurial skills.

The reality is that, due to its already established presence and the trend for the coming years, AI increasingly impacts business models and future professions.

Despite widespread concerns, AI has established itself as a significant resource for corporate demands and provides many benefits to companies of all sizes and sectors.

AI in numbers

Thanks to high demand and constant investments, the global AI market, valued at $165 billion, is projected to reach $1.6 trillion by 2030. In Latin America, Brazil stands out as the most advanced country in the use of AI, with about $2.4 billion of the total technology investments in the region directed to the country in 2020.

What is Artificial Intelligence?

AI is a technological advancement that allows the simulation of human intelligence through machines, empowering them to perform tasks that typically require human efforts, such as learning, reasoning and decision-making.

How has Artificial Intelligence impacted businesses?

Artificial Intelligence has influenced the labor market and the industry, primarily through task automation, providing enhanced efficiency, speed and productivity for companies, besides improving time management by reducing tasks. Contrary to the current fear, AI has positively contributed to job creation, especially in Information Technology, such as data science and software development.

Benefits of Artificial Intelligence for Businesses:

  • Process automation
  • Increased productivity
  • Problem-solving
  • Innovation, efficiency and agility
  • Improved precision and accuracy
  • Fast communication
  • Reduced operational costs
  • Decreased rework
  • Support in evaluating performance indicators
  • Enhancement of marketing campaigns
  • Automated customer service
  • Enhanced customer experience

Patricio Espinosa, General Manager, IBM Colombia, Peru, Ecuador, Venezuela and the Caribbean

Patricio Espinosa, General Manager, IBM Colombia, Peru, Ecuador, Venezuela and the Caribbean

AI is already a reality in our countries. It has been developed for decades and has different implementations, ranging from virtual agents or chatbots to advanced cyber threat detection and data collection for sustainability support.

The recent IBM Global AI Adoption Index 2022 revealed that 29% of organizations in Latin America have actively implemented AI in their operations, an increase of 8% compared to the reported figure in 2021. It represents significant growth in adopting this technology and is still an opportunity to explore.

Companies nowadays face the challenge of being more efficient, automating processes, optimizing operations, innovating, improving customer experience, providing their employees better support and enhancing cybersecurity capabilities, among others. All of this is possible with the proper use of technologies like AI.

One of the keys for this development to continue positively evolving is for people to trust the results and predictive recommendations through explainable and transparent AI systems.

The use of conversational AI in customer service is rapidly growing due to the capabilities provided by Natural Language Processing (NLP) and Machine Learning. When applied to customer service, conversational AI, which is reliable and designed to focus on the human, can boost customer and employee satisfaction and loyalty.

The average contribution to human agent satisfaction attributed to this tool is 20% and concerning external customers 99%, according to a study by the IBM Institute for Business Value and Oxford Economics.

But this is just one of many uses. For example, according to the same IBM Global AI Adoption Index 2022, technology professionals in Latin America believe that AI has significant potential to help solve ESG or sustainability challenges, such as providing more accurate and verifiable information on environmental performance factors for reporting (34%) and driving more efficient business processes and operations, such as supply chain efficiency, operations and manufacturing (34%).

Cláudio Lúcio, Founder of A3Data

Cláudio Lúcio, Founder of A3Data

Using AI with recent generative models such as ChatGPT presents challenges worldwide, with diverse opinions ranging from calls to halt studies to controversial advancements. Although there are various observations concerning this technology, the fact is that it has great potential for profound changes in the corporate world. And the data, at the very least, is quite attention-grabbing.

According to the Weforum (World Economic Forum), there will be a growth of 69 million jobs and a decline of 83 million by 2027. Another study conducted by OpenAI (the company behind ChatGPT) indicates that in the US, 80% of the workforce may have at least 10% of their tasks affected by the introduction of technologies such as ChatGPT and approximately 19% of workers may have at least 50% of their assignments similarly impacted.

In Latin America, we are experiencing a delicate moment: Inflation, economic growth of around 1.7% and currency devaluation against the dollar. However, there are opportunities such as the global offshoring strategy (economic activity decentralization from China), digital nomads (Latin America offers a great alternative), replacement of exports that previously came from Russia and new consumer trends.

We are in times of crisis but also of many opportunities. And AI has the potential to generate a boom in operational efficiency in various sectors of the economy. We understand the first wave will be regarding digital businesses involving customer relations, finance and software development. These technologies are already a reality in sectors that utilize physical and digital aspects, such as sales, healthcare and education.

The third wave will fully encompass sectors in which Latin America is already strong, such as agribusiness, mining, steel production and an even more advanced industry.

We have labor gaps, but many centers can train individuals so that we can leverage this technology with acceleration of our Digital Transformation.

Frederico Burril, IT Manager, Itaú

Frederico Burril, IT Manager, Itaú

Since the Turing Machine in 1950, through the Dartmouth Conference that brought us the term Artificial Intelligence, humans have been pursuing the goal of creating intelligent machines. It is a possibility that has fascinated humanity for decades and will radically change how we live.

In this journey, many moments have impacted the world, such as when a computer called Deep Blue defeated the chess champion and legend Gary Kasparov in 1997. Now, once again, the world is facing another possible breakthrough that has gone viral in the market: ChatGPT.

ChatGPT is a service from the company OpenAI that incorporates a conversational chatbot powered by a trained generative transformer. It was enabled in 2021, launched in November 2022 and reached one million users in just a few days.

The ability to understand natural language and, from an input stimulus, produce a consistent and enriched output is powerful. We are witnessing the ambition of seeing machines created. OpenAI is not alone in this endeavor: Google with Bard, Baidu, Alibaba and Microsoft are companies that are already presenting solutions or have expressed their intention to do so. Considering that we will have many other players and, like any successful technology, we will see many ramifications emerge.

The use cases are numerous: The evolution of a text and even the creation of one, research, language adaptation to a target audience, consolidation of information that enables conclusions from various sources, chatbot improvement and code generation are part of a list that will increase day by day.

The potential impact on the market is overwhelming. Imagine the access to data by small and medium-sized companies as if they had the structure and information of gigantic companies with a disproportionate cost and effort.

The impact on how to do some activities can change radically, and the required competencies will also change.

In a quick analysis, the industries with the most potential impact are customer service, education, healthcare, the financial system, marketing and communication and software production. There is no claim that this list is exhaustive.

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