{"id":10757,"date":"2023-12-05T12:31:33","date_gmt":"2023-12-05T10:31:33","guid":{"rendered":"https:\/\/escp.eu\/thechoice\/?p=10757"},"modified":"2023-12-11T14:57:56","modified_gmt":"2023-12-11T12:57:56","slug":"how-artificial-intelligence-will-transform-decision-making","status":"publish","type":"post","link":"https:\/\/escp.eu\/thechoice\/tomorrow-choices\/how-artificial-intelligence-will-transform-decision-making\/","title":{"rendered":"How artificial intelligence will transform decision-making"},"content":{"rendered":"\n<ul class=\"wp-block-list\">\n<li class=\"has-medium-font-size\">Effective use of artificial intelligence in strategic decision-making will be one of the biggest determinants for future competitiveness.<\/li>\n\n\n\n<li class=\"has-medium-font-size\">The interaction between humans and AI, as well as the ability to choose which decisions to delegate to AI, will be among the most important skills for decision-makers.<\/li>\n\n\n\n<li class=\"has-medium-font-size\">Trust, access and integration will shape the scale and speed of AI adoption in future decision-making processes.<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-columns cs-column h-my-40 h-my-0-sm is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\"><div class=\"wp-block-image aligncenter is-style-rounded\">\n<figure class=\"size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"480\" height=\"480\" src=\"https:\/\/escp.eu\/thechoice\/wp-content\/uploads\/philip-meissner.jpeg\" alt=\"Philip Meissner\" class=\"wp-image-8050\" srcset=\"https:\/\/escp.eu\/thechoice\/wp-content\/uploads\/philip-meissner.jpeg 480w, https:\/\/escp.eu\/thechoice\/wp-content\/uploads\/philip-meissner-300x300.jpeg 300w, https:\/\/escp.eu\/thechoice\/wp-content\/uploads\/philip-meissner-150x150.jpeg 150w, https:\/\/escp.eu\/thechoice\/wp-content\/uploads\/philip-meissner-96x96.jpeg 96w\" sizes=\"auto, (max-width: 480px) 100vw, 480px\" \/><\/figure><\/div><\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center h-ml-20 h-ml-0-xs is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\">\n<p><span class=\"h-fs-18 h-fw-700 h-cl-blue\">Philip Meissner<\/span><br>Professor at ESCP Business School, Founder &amp; Director of the European Center for Digital Competitiveness<\/p>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\"><div class=\"wp-block-image is-style-rounded\">\n<figure class=\"aligncenter size-full\"><img decoding=\"async\" src=\"https:\/\/i1.rgstatic.net\/ii\/profile.image\/998495288836096-1615071236044_Q512\/Yusuke-Narita-3.jpg\" alt=\"\" class=\"wp-image-10238\"\/><\/figure><\/div><\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center h-ml-20 h-ml-0-xs is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\">\n<p><span class=\"h-fs-18 h-fw-700 h-cl-blue\">Yusuke Narita<\/span><br>Assistant Professor of Economics at Yale University<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<p class=\"has-drop-cap\"><strong>Artificial intelligence already plays a crucial role in the decision-making processes of many companies and i<\/strong>s increasingly used to inform policy and public sector decisions around the world. Supervised learning, for example, is already used by some governments to\u00a0<a href=\"https:\/\/www.chathamhouse.org\/sites\/default\/files\/2019-08-07-AICounterterrorism.pdf\">detect potential criminals and terrorists<\/a>.<\/p>\n\n\n\n<p>Yet, so far, <mark>only&nbsp;<a href=\"https:\/\/www.mckinsey.com\/capabilities\/strategy-and-corporate-finance\/our-insights\/artificial-intelligence-in-strategy\">7% of companies use AI in big strategic decisions<\/a>, such as strategy development or financial planning.<\/mark> At the same time, the importance of the technology for the future is enormous:&nbsp;<a href=\"https:\/\/www.ibm.com\/downloads\/cas\/1V2XKXYJ\">75% of business leaders<\/a>&nbsp;believe that what will set companies apart from their competitors in the future will be determined by who has the most advanced generative AI.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Future competitiveness may not only be about who has the most advanced AI, but also how this technology is used for strategic decision-making. <\/p>\n<\/blockquote>\n\n\n\n<p><a href=\"https:\/\/weforum.eu.qualtrics.com\/jfe\/form\/SV_af38noL8hELk7ie?PageOrigin=Partners-Snippet-artificial-intelligence\"><\/a>Especially in the area of decision-making, we already see AI\u2019s power today. Indeed, it has already arrived in many boardrooms. <strong>More than 40% of\u00a0<a href=\"https:\/\/www.ibm.com\/downloads\/cas\/1V2XKXYJ\">CEOs say they use generative AI to inform their decision-making processes<\/a>. <\/strong>There are many benefits of such AI tools, from better compliance to less biased and more inclusive strategic decisions. At the same time, as AI becomes more advanced, we will have to develop strategies for how to use these systems in important decisions. We will have to decide how to best interact with AI, and more importantly, which decisions we can completely delegate to AI.<\/p>\n\n\n\n<p>In fact, we think that future competitiveness may not only be about who has the most advanced AI, but also how this technology is used for strategic decision-making. <strong>This will ultimately influence the competitiveness of companies and countries in the age of AI.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Two types of AI-based decisions<\/strong><\/h2>\n\n\n\n<p><strong>Some decisions today are already made entirely by AI. <\/strong>For instance, at Ant Financial,\u00a0<a href=\"https:\/\/hbr.org\/2020\/01\/competing-in-the-age-of-ai\" target=\"_blank\" rel=\"noreferrer noopener\">AI is approving loans<\/a>\u00a0and will now be increasingly used in\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-09-08\/ant-unveils-ai-language-model-for-wealth-management-insurance\" target=\"_blank\" rel=\"noreferrer noopener\">wealth management<\/a>. Also, tech companies like Facebook, Microsoft and\u00a0<a href=\"https:\/\/research.netflix.com\/research-area\/machine-learning\" target=\"_blank\" rel=\"noreferrer noopener\">Netflix allocate digital content<\/a>\u00a0by reinforcement learning algorithms.<\/p>\n\n\n\n<p>While fully autonomous AI decisions may still be the exception, <strong>most decisions executives and consumers make are already informed by AI. <\/strong>At Amazon, for example,\u00a0<a href=\"https:\/\/www.forbes.com\/sites\/blakemorgan\/2018\/07\/16\/how-amazon-has-re-organized-around-artificial-intelligence-and-machine-learning\/?sh=1b8d9fbf7361\" target=\"_blank\" rel=\"noreferrer noopener\">35% of revenue is driven by AI recommendations<\/a>. Government services are also increasingly influenced by the technology. In Singapore, citizens can get information about government services 24\/7 by using\u00a0<a href=\"https:\/\/www.tech.gov.sg\/products-and-services\/vica\/\" target=\"_blank\" rel=\"noreferrer noopener\">\u201cAsk Jamie\u201d or the new VICA bot<\/a>.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>We will have to think about which decisions we are comfortable for AI to make and which ones we would rather make ourselves.<\/p>\n<\/blockquote>\n\n\n\n<p><strong>This human-AI interaction has important implications for decision-making. <\/strong>A recent study found that decision-makers arrive at\u00a0<a href=\"https:\/\/sloanreview.mit.edu\/article\/the-human-factor-in-ai-based-decision-making\/\" target=\"_blank\" rel=\"noreferrer noopener\">completely different decisions using identical AI recommendations<\/a>\u00a0based on their individual decision-making styles. This suggests that it may not be enough to develop a perfect AI. If there is a human in the loop, we will still have to think about the psychological elements driving decision-making.<\/p>\n\n\n\n<p><strong>These developments leave us with many questions that are crucial for the future of decision-making. <\/strong>Which decisions will we still make in the future? Could AI automate more and more decisions in our everyday lives? Will it make these decisions better than we do? In any case, we will have to think about which decisions we are comfortable for AI to make and which ones we would rather make ourselves. The answer will likely differ around the world.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Main drivers of AI-based decisions<\/strong><\/h2>\n\n\n\n<p>In our view, there are three main drivers that will shape the speed and scale to which AI will be used in decision-making and, as a result, influence competitiveness:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Trust<\/strong><br>A recent\u00a0<a href=\"https:\/\/assets.kpmg.com\/content\/dam\/kpmg\/au\/pdf\/2023\/trust-in-ai-global-insights-2023.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">global study<\/a>\u00a0showed that trust levels in AI differ quite substantially around the globe. While 75% of people in India are willing to trust AI, only 15% would do so in Finland and 23% in Japan. We believe that the adoption of AI in decision-making will depend significantly on the level of trust in the system. Will we see a world of multiple speeds in AI-based decision-making? <strong>In a competitive setting, such developments could significantly influence the competitiveness of nations in the tech space.<\/strong><br> <\/li>\n<\/ol>\n\n\n\n<ol class=\"wp-block-list\" start=\"2\">\n<li><strong>Access<\/strong><br>Will the world\u2019s leading AI systems be open ones that essentially give everyone access to an individual AI, or closed systems that enable companies and nations to differentiate themselves and control access to the technology? <strong>In a world in which closed systems dominate, strategic AI-based decisions might be a luxury of the few.<\/strong><\/li>\n<\/ol>\n\n\n\n<ol class=\"wp-block-list\" start=\"3\">\n<li><strong>Integration<\/strong><br>The third factor we predict will determine the scale and speed of AI adoption in decision-making is the way in which both companies and governments are able to manage the AI-human interface. <strong>Being able to effectively utilize AI input in strategic decisions and mitigating the effects of human biases in the process will be crucial.<\/strong><br><br><\/li>\n<\/ol>\n\n\n\n<p> <\/p>\n\n\n\n<hr class=\"wp-block-separator has-text-color has-yellow-color has-alpha-channel-opacity has-yellow-background-color has-background is-style-wide\"\/>\n\n\n\n<p> <br><em><strong>This article was originally published by the&nbsp;<a href=\"https:\/\/www.weforum.org\/agenda\/2023\/09\/how-artificial-intelligence-will-transform-decision-making\/\" target=\"_blank\" rel=\"noreferrer noopener\">World Economic Forum<\/a>.<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Philip Meissner and Yusuke Narita show how AI will change decision-making and what effects this will have on competitiveness.<\/p>\n","protected":false},"author":1,"featured_media":10759,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[14],"tags":[42,16,27],"class_list":["post-10757","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tomorrow-choices","tag-leadership","tag-strategy","tag-tech","category-14","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.5 - 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