Competing in the Age of AI

As each day goes by, before our eyes we witness the development of a new and innovative model, which is substantially different from the traditional business model. At the core of this model is the digitisation of every aspect of the social and financial lives of individuals and companies, and the exploitation of the power of networks to improve the distribution of products and services through the use of artificial intelligence, big data and increasingly complex, yet meticulous algorithms.

If we are to seize the opportunities of this new era of the world economy, we must learn to understand its dynamics, to make them ours and open our eyes to the fact that digital networks and artificial intelligence are transforming business and society, actually bringing the analogue and digital worlds closer together, until they eventually merge and become part of one another.

The use of artificial intelligence in a highly digitised world is not a trend to be ignored, but a signal that we must heed in order to prepare for change, especially in light of the strong impact this will have on competition between companies.

When companies with a strong digital base enter the market and compete with traditional companies, a strategic collision takes place. In this scenario, companies from the old market, which have enjoyed decades of success, obtained using classic strategies, do not recognise the risk posed by the new digital strategies used by the competition. Once these companies reach the level of data and technology required to get the artificial intelligence machines up and running, a cycle of exponential growth will be triggered, putting the work and the very existence of traditional companies at serious risk. There are countless examples in recent years of giants in the global market being swept away for not having heeded the warning of the imminent digital revolution; just think about Kodak or Nokia.

Having said that, it is possible to both resist and compete in an AI based system, as long as you are ready to embrace the profound change that is required: an example of a company that has done so is Microsoft, who decided to reinvent themselves, focussing on their Azure product and on artificial intelligence to evolve into a provider of cloud services. And then there are companies that are born of the digital era such as Uber, Airbnb and WeChat, which as such, already have all the right tools to be able to compete in their markets.

Whether they are formerly traditional companies, or whether they created in the digital era, these companies all have one thing in common: a new business approach, based on the digital enhancement of their scale, scope and learning, which allows them exponential growth. This also makes them almost unstoppable, scalable and adaptable for expansion across multiple fields, thanks to their use of data algorithms and artificial intelligence. Today more than ever, one must be aware of all these dynamics to be able to prepare for them: the next ones to have to adapt and implement artificial intelligence and virtual systems could be us.