Unleashing Infinite Possibilities: The Comprehensive Business Case for Generative AI

Artificial intelligence is a key driver of economic growth, as it increases productivity, creates new markets, and fosters innovation.?If the third decade of the 21st century is remembered for anything, it will probably be the leaps and bounds made in the field of AI. Generative AI and Large language models (LLMs) have pushed AI performance to near-human levels, and in some cases beyond. It?is rapidly evolving and have the potential to transform multiple sectors and domains, creating new sources of value and growth.

It possesses the potential to revolutionize various sectors, akin to the impact of personal computers, the Internet, smartphones, and cloud computing in previous decades.?Generative AI is about creation, creativity, and innovation, and it can enhance human capabilities, augment existing workflows, automate tedious tasks, and generate new insights and solutions. In addition to its economic benefits, generative AI has the potential to generate significant social value by fostering creativity, facilitating new modes of expression and communication, uplifting marginalized and underrepresented communities, and promoting social and cultural diversity and inclusion.

According to Gartner more than 80% of enterprises will have used GenAI APIs or models, and/or deployed GenAI-enabled applications in production environments, by 2026, up from less than 5% in 2023. Generative AI has become a top priority for the C-suite and has reached the peak of Gartner AI hype cycle.

In this blog post, we will explore the relationship between generative AI and economic growth, its potential across various industries, its impact on productivity and jobs, and its ability to create social value by fostering creativity, inclusion, and diversity.

The relationship between generative AI and economic growth

Technology is a key driver of economic growth, as it increases productivity, creates new markets, and fosters innovation. However, the impact of technology on GDP growth is not linear, but rather depends on the type, diffusion, and adoption of technology, as well as the institutional and social context. AI is a general-purpose technology that has the potential to transform multiple sectors and domains, creating new sources of value and growth. Generative AI, in particular, is a subset of AI that can create novel and realistic content, based on existing data or user input.

Generative AI, exemplified by applications like ChatGPT and Microsoft Copilot, is ushering in a new era of transformative potential with profound impact on business, science, and society. This technology's disruptive power lies in its ability to fundamentally shift paradigms, as evidenced by ChatGPT's rapid growth to 100 million monthly active users in just two months post-launch and a rapid adoption of Microsoft's Azure OpenAI services with more than 18,000 organisations?now?using?it. Industries are already witnessing a potential shift,?with 40% of all working hours?across sectors being influenced by large language models (LLMs) like GPT-4. Developer velocity is one great example; GitHub Copilot has increased developer productivity by up to 55% while helping them stay in the flow and bringing the joy?back?to?coding. Beyond mere numbers, the intrinsic value of Generative AI is its profound impact on human creativity and productivity.

Microsoft recently conducted research using a combination of surveys and experiments to deeply understand how AI is transforming work—learning, for its Generative AI Copilot’s earliest users and the data shows that the productivity gains are real - 70% of Copilot users said they were more productive, and 68% said it improved the quality of their work.

In another study conducted by IDC based on results from 2,109 enterprise organizations totalling more than 13 million employees worldwide across 16 countries globally, the research uncovers the transformative potential of AI, showcasing its ability to drive economic growth and business innovation. Key takeaways include:

- 71% of businesses are leveraging AI.

- Quick ROI with AI deployments showing returns within 14 months.

- A noteworthy average return of $3.5X on every dollar invested in AI.

- The study heralds generative AI, projecting a near $10 trillion addition to global GDP over the?next?decade.

However, the actual impact of generative AI on GDP growth will depend on several factors, such as the availability and quality of data, the development and regulation of gen AI tools, the skills and education of the workforce, the ethical and social implications of gen AI, and the distribution and inclusiveness of the benefits of Gen AI.

Case study-

Generative AI, epitomized by Microsoft 365 Copilot, is transforming the economic landscape of enterprises by significantly boosting productivity. By integrating seamlessly with everyday tools like Word and Excel, it automates mundane tasks, thereby driving down the break-even point and delivering remarkable ROI. The predicted adoption by 6.9 million knowledge workers, just in US, by 2024 underscores this value proposition.

The break-even point for recuperating enterprise investment is low. If it provides four hours of time savings per month — just one hour per week — an employee would only need to earn $7.50/hour to break even on the cost of Microsoft 365 Copilot over the course of a year, based on the analysis by Forrester.

A case in hand is - Dentsu International, advertising and PR company, has shared that the company has adopted 300 licenses of Microsoft's AI Copilot as part of an early access program. They are currently in the process of collecting both quantitative and qualitative data to justify further deployment. Preliminary surveys indicate that Copilot saves users approximately 15 to 30 minutes per day, translating to a time savings of about five to ten hours?per?month.

While the creativity facet of Generative AI holds immense potential, the compelling economic value is already apparent through the lens of productivity, explaining the rapid enterprise adoption of such transformative?technology.

The economic potential of generative AI across various industries and domains

Generative AI is steadily transforming the landscape of various industries by offering innovative solutions and augmenting existing systems. By leveraging the ability to generate data similar to that which is input, generative AI holds immense potential for driving economic growth, enhancing efficiency, and fostering innovation across diverse sectors. The economic ramifications are profound, as businesses harness the power of generative AI to create value, reduce operational costs, and drive customer engagement. The subsequent sections delve into the economic potential of generative AI in various industries, shedding light on how this technology is reshaping traditional business models and creating new avenues for growth:

• Media and entertainment: Generative AI can produce high-quality and personalized content, such as images, videos, music, podcasts, games, and stories, that can attract and engage audiences, reduce production costs, and increase revenues. The economic benefits extend to advertising, where AI-generated content can significantly lower marketing costs while ensuring a broader reach and impact. For instance, ?LaLiga and Microsoft are working together to create digital products and solutions that help reinvent the sport through AI applications. The collaboration aims to improve the data available to coaches, enhance the experience of fans, and deliver immersive materials for broadcasters using technologies such as Whisper and GPT.
• Telecommunications: Generative AI plays a pivotal role in the telecommunications sector and finds application across the entire telecom ecosystem; from network optimization and predictive maintenance to personalized customer experiences and intelligent virtual assistants to service automation. Economically, this translates to lower operational costs and increased revenue. For example, AT&T is deploying a new tool called Ask AT&T that uses Azure OpenAI’s ChatGPT technology to help employees with various tasks and challenges like coding, translation, documentation, customer service, HR, meeting summaries, and more. It can also counter AI-generated threats.
• Automotive: Generative AI technology is disrupting the way vehicles are designed, manufactured, sold, and experienced. The entire automotive industry is under severe pressure to reduce cost and increase efficiency, and by using Generative AI, carmakers will have the potential to bring down operational costs.?For?example, CarMax, a leading used car retailer in the US that uses Microsoft Azure OpenAI Service to generate text summaries for its car research page. The initial goal was to create summaries for 5,000 car pages, a task that would have taken 11 years manually, was achieved in a few months with an 80% approval rate.
• Public Sector: Generative AI capabilities have the potential to revolutionize both the way governments interact with citizens and how the public workforce addresses society’s challenges. Generative AI can help governments and public sector organizations provide enhanced service experiences that make the government more accessible and less?time-consuming. City of Kelowna uses Azure OpenAI Service to build a conversational AI solution for its 311 help line that can answer various questions from citizens by accessing real-time data and existing documents from the city’s sources. The solution also aims to translate legal documents, guide permitting processes, and reduce repetitive work for citizens and staff.
• Healthcare and biotechnology: Generative AI can improve diagnosis, treatment, and prevention of diseases, as well as design and discover new drugs, vaccines, and biomaterials. Administrative demands continue to burden healthcare providers, taking up valuable time that could be used to provide more focused care to patients. Generative AI has the potential to give healthcare providers valuable time back by automating?tasks. For instance, Microsoft and Epic are expanding their collaboration to develop and integrate generative AI into healthcare using Azure OpenAI Service. The AI solutions are expected to increase productivity, enhance patient care, and improve financial integrity of health systems globally.
• Education and research: Generative AI can enhance learning outcomes, facilitate knowledge discovery, and accelerate scientific innovation. For example, Microsoft is collaborating with New York City Public Schools, PowerSchool, and Kahoot! to leverage generative AI to provide personalized learning pathways, formative assessments, and interactive quizzes thus bringing AI innovation to education and how it supports educators and students with AI-powered experiences.
• Retail and e-commerce: Generative AI can enhance customer experience, satisfaction, and loyalty, as well as increase sales, conversion, and retention. For example, The global retail giant Carrefour integrated Azure OpenAI technologies into their shopping experience. Generative AI powers personalized shopping recommendations for customers, enhancing engagement and sales conversion rates.
• Financial Services: Generative AI has the potential to drive marked improvements in employee productivity, operational efficiency, and customer experience for financial services. Generative AI will enable organizations to better take advantage of technology, collapsing data barriers, and decoding the complex landscape of macroeconomics, markets, and?regulations. For example, UAE-based banking group Emirates NBD leverage the capabilities of generative AI to improve its productivity across various business functions supported by Microsoft while fostering new opportunities for innovation, software development, collaboration, efficiency, and customer experience within the banking industry.

Each sector presents unique opportunities and challenges, yet the overarching economic benefits are clear – from cost savings and efficiency gains to the creation of new value propositions and business models.

Generative AI, Productivity, and Job Displacement

An investigation by Harvard Business School has unveiled groundbreaking insights into the transformative power of OpenAI's GPT-4, when placed in the hands of Boston Consulting Group employees.

The results were nothing short of revolutionary. BCG team members selected to integrate GPT-4 into their consulting toolkit outperformed their counterparts dramatically. These AI-enhanced professionals not only achieved tasks with a stunning 25% increase in speed but also managed to complete an impressive 12% more tasks. Moreover, the quality of their work soared by a remarkable 40% compared to those who worked without this advanced AI assistance.

The study revealed a fascinating trend: the AI-induced performance boost was universal, benefiting employees across various skill levels. However, the most significant leap in efficiency and output quality was observed among those with lower skill levels within the organization.

It is evident that Generative AI is poised to drive a significant surge in productivity. By automating tasks that previously required human intervention, it can lead to substantial efficiency improvements and cost reductions. However, this does not necessarily equate to job reduction. Instead, we are looking at a scenario of job displacement due to the massive economic boost.

The principle of Jevons Paradox suggests that if the demand for a product or service is elastic, a decrease in price will result in an increase in demand that more than compensates for the price drop. This has been evident with the advent of the PCs and internet, where increased value and productivity have led to a surge in demand.

Similarly, when it comes to generative AI and work automation, the demand is elastic. The more we create, the more people consume. This leads to a massive expansion in productivity and the creation of new jobs and opportunities. However, these are not necessarily the same jobs that were displaced by automation. Instead, they are new roles that emerge as a result of the shift in demand and resource allocation.

Just as the PCs and internet led to significant job displacement but also created entirely new industries and job roles, generative AI is likely to have a similar impact. It’s important to note that while some jobs may be displaced, new ones will be created in their stead. The key is to manage this transition responsibly through appropriate reskilling and upskilling initiatives.

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Beyond Economics: The Social Dividend of Generative AI

In the aftermath of the global pandemic, businesses worldwide are navigating uncharted waters, seeking anchors to steady their course. Generative AI emerges as that very anchor, heralding a promise of not just robust economic resurgence but also profound societal enrichment. While it's tempting to be solely captivated by the economic allure of Generative AI, it's imperative to recognize the vast reservoir of social value awaiting to be tapped.

Generative AI can create social value in many ways, such as enhancing human creativity, enabling new forms of expression and communication, empowering marginalized and underrepresented groups, and fostering social and cultural diversity and inclusion. Generative AI with its universal access, can augment human creativity by providing new tools, techniques, and inspiration for generating novel and original content, such as art, music, literature, and design.

·????? Generative AI can enable new forms of expression and communication by allowing people to create and share content across different modalities, languages, and platforms, such as images, videos, podcasts, and games.

·????? Generative AI can empower marginalized and underrepresented groups, such as minorities, and people with disabilities, by providing them with access to information, education, and opportunities, as well as amplifying their voices and perspectives.

·????? Generative AI can foster social and cultural diversity and inclusion by creating and celebrating content that reflects and respects the diversity and richness of human cultures, identities, and experiences, such as ethnicity, gender, sexuality, and religion.

Let’s delve into some poignant examples that illustrate the broader societal impact of Generative AI.

·?????? Voice-Driven Pair Programming by GitHub: GitHub’s initiative, dubbed "Hey GitHub", is a stellar example of how voice-driven pair programming can reshape collaborative development. By enabling natural interactions with code repositories, it simplifies the coding process, thereby facilitating a more inclusive environment for developers of varying skill and dexterity levels, epitomizing how Generative AI can democratize the programming landscape.

·?????? Microsoft’s Power Suite (Power Apps and Power Automate): Microsoft's Power Suite, encompassing Power Apps Ideas and Power Automate's 'Describe it to Design it', is a tour de force in leveraging Generative AI to bring natural language capabilities into app development and workflow automation. Power Apps Ideas translates natural language into functional code, making app creation accessible to a wider audience. Concurrently, Power Automate's 'Describe it to Design it' feature translates natural language descriptions into robust workflow designs. This suite is especially empowering for individuals with disabilities, as it enables them to effortlessly design apps or automate workflows, enhancing their engagement and productivity in the workplace.

·?????? BeMyEyes: The BeMyEyes platform is a testament to the social value engendered by Generative AI. By connecting visually impaired individuals with digital visual assistant powered by OpenAI’s new GPT-4 language model, it creates a support network that transcends geographical and social boundaries. This technology will be transformative in providing people who are blind or have low vision with powerful new resources to better navigate physical environments, address everyday needs, and gain more independence.

This initiative epitomizes how technology can be harnessed to foster a more compassionate society.

·?????? Next-Gen AI for Inclusive Governance in India: In rural India, next-gen AI Jugalbandi chatbot, has been a cornerstone for enhancing accessibility to government services. In India, the language of government, business and public life is English, but it is spoken by just 11% of the 1.4 billion population. By bridging the digital divide, Jugalbandi has empowered villagers to avail essential services with greater ease, thereby fostering a culture of inclusive governance. This is revolutionary for people who could not interact with tech because of language barriers.

·?????? Learning Accelerators: Generative AI is significantly contributing to equity and social value by enhancing equal learning opportunities to build foundational skills.?Learning Accelerators are AI-powered learning tools seamlessly integrated in Microsoft 365 Education to give individual students more opportunities to learn, practice, and receive specific coaching. Speaker Coach is a Learning Accelerator utilizing AI to give real-time pointers on pacing, pitch and filler words. Reading Progress leverages the power of Azure OpenAI Service to create personalized reading passages based on words or phonics rules that a class or specific student found most?challenging.

The emergence of Generative AI as a tool for social advancement marks a pivotal shift in our technological narrative. Far from being confined to the echelons of economic growth, these innovations are paving the way for a more inclusive and accessible world. It embodies the ethos of technology as an equalizer, breaking down barriers and fostering a community where everyone, regardless of their background or abilities, can thrive.

As 2023 draws to a close, we stand at an extraordinary juncture in history, marvelling at the transformative journey led by Generative AI. This year has not just been about technological advancements; it's been a pivotal era defining the convergence of innovation, society, and economy. Generative AI has emerged not merely as a tool, but as a catalyst for reimagining possibilities across industries and communities. The socio-economic justification for embracing this technology is clear and compelling – it promises efficiency, creativity, and a new horizon of opportunities. Yet, as we forge ahead, our focus must shift towards inclusivity and collective progress. It's imperative that we navigate this remarkable wave of change together, ensuring that the benefits of Generative AI are accessible and equitable, paving the way for a future where technology uplifts and?unites?us?all.