Artificial Intelligence is a part of digitalization trend. Industry believes in Digitalization: Increased productivity usually go hand-in-hand

1. VTT TECHNICAL RESEARCH CENTRE OF FINLAND LTD
Combining AI technologies
with our traditional strengths
Vaikuttajatilaisuus
9.11.2017
Heikki Ailisto
Research professor

2. 319/06/2018 3
Artificial Intelligence is a part of digitalization trend.
Since 2000 we have seen many trends and buzzwords coming.
Mobile work enabled
by 3G, 4G, 5G
Cloud and cloud services
Big data
IoT,
Industrial internet
Industrie 4.0
Data Analytics
Virtual reality, VR, AR
Platform economy
AI
Machine learning
RPA
Blockchain

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What AI is
 AI is a collection of technologies and methods – not a single
technology.
 Recently, deep learning neural networks have given great results e.g. for
image recognition
 Other technologies and methods include machine learning, natural
language processing, machine vision, robotics, as well as problem
solving & searching, logic & planning & ontologies, probabilistic
reasoning, fuzzy logic
AI Paradox (odd paradox, AI effect):
"AI is whatever hasn't been done yet.“ [Douglas Hofstadter]

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Levels of AI
NARROW, WEAK AI
Very good in
recognizing faces in
images or playing chess
or optimizing a
complicated system.
Totally useless in
everything else.
STRONG, GENERAL AI
AI with broad
understanding and
human-like
consciousness.
SUPER AI
AI superseding human
intellect in all respects.
Related to the concept
of singularity. Popular in
sci-fi.
Today, we do not have Artificial Intelligence in the sense that machines would have consciousness
or will of their own. (Someday we may have).
Maybe we should be talking about “auxiliary intelligence”?

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Why is AI a hot topic now?
Data
Lot’s of data available at
reasonable cost due to internet,
digitalization, IoT, SOME, and
cheap cloud storage.
Computing
power
Affordable, available and scalable
computing power. Hadoop, SPARK
GPU, NVIDIA.
Algorithms
and tools
Basically, algorithms were there in 90’ies,
but now they have been packaged and
made available as toolsets by Google
and others. Deep learning NN is great for
many apps.
Business needs
and benefits

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Industry Believes in Digitalization
A study with 235 major German
companies concluded that “the digital
transition will lead to a significant
transformation … that will require
considerable investment” and more
than 50% of their capital investments
between 2015 – 2019 was going to
digitalization (“Industry 4.0”, German).
[PwC 2015]. This will increase
productivity by 18% in five years and
add revenues 2 – 3% per year.
Drivers:
1) integration of value chain,
2) digital connected products (IoT)
3) emergence of new business models
Global investment in digitalization B$ 900
[PwC]
4800 business executives, managers and
analysts around the world were interviewed
about digitalization. 76% of respondents said
that digital technologies are important to their
organisation’s today, and 92% saw that they
will be important in three years from now.
(MIT Sloan, Deloitte 2015)
Manufacturing (B$ 178), transport (78) and
utilities (69) are the biggest investors in
2016. [IDC]. Respectively the biggest
investment go to operations, freight
monitoring and metering of electricity.
Devices and hw largest now, services grow
faster.

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Digitalization and increased productivity
usually go hand-in-hand
Source: McKinsey Global Institute (case USA)
• Five top digitalized sectors have
increased productivity by 2.4%
every year on average during
past 10 years 2005 - 2014
• Respectively, five least
digitalized sectors have had no
increase in productivity.
(McKinsey Global Institute, 2015)
• During next five years
companies expect to increase
annual revenues by an average
of 2.9% and reduce costs by an
average of 3.6% p.a. (PwC 2016
Global Industry 4.0 Survey, 2000
interviewed)

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Impacts on industry/ies
 Adoption of AI is fastest in high-tech / digitalized industries:
ICT, telecom
Automotive
Finance
Utilities
Media & entertainment
Consumer goods
Retail
Education
Health
Construction
Travel & tourism
Source: McKinsey Artificial Intelligence
The Next Digital Frontier? Discussion Paper June 2017

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So, what are the Finnish strenghts?
 World-leading in certain sectors: elevators, cruise ships, forest
harvesters.
 Level of education is high on averge (so far).
 Finns take new technologies in to use faster than other Europeans.
 Laws, regulation and government sometimes even encourage
experimenting and new ways of doing.
 Research is on par with similar countries.
Society with high trust and low hierarchies has an advantage during disruptive
times.

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Finland is seen as benefiting big from AI trend

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Some suggestions for Finnish success
 Encourage public discussion
 Find new approaches and ideas: prepare for change
 start-ups for global growth
 Means to keep RDI, good jobs, tax revenue and even ownership in Finland should
be found
 Traditional strengths and AI
 Ecosystems creating new business and value for Finland
 Regulation and legislation; innovative procurement
 Good early results, e.g. test area for ships.
 Health sector could benefit big!
 ”Learn to learn”
 Education on all levels must prepare for change. Lifelong learning
 Embrace the possibilities of AI in companies and public service!

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Recommendations for the success of

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Quality monitoring tool / Dimecc SIMP
Heli Helaakoski, Vesa Kyllönen and Mikko Heiskanen, VTT

14. TECHNOLOGY FOR BUSINESS