Oh yes, this is the great
transformer.
Businesses who adopt AI are
likely improve their competitiveness, while those who
don’t will struggle and face an uncertain future,
according to a report by Westpac NZ’s Economics
team.
Westpac’s Industry Economist Paul Clark says
that AI is critical for firms who want to maintain
competitiveness and improve their profitability. AI achieves
this by increasing the adaptability and responsiveness of
the firm to changing circumstances, boosting productivity,
and delivering a sharper customer focus.
“Despite
these benefits, most firms in New Zealand remain ambivalent
about AI and are not pursuing it with urgency. In part
that’s because most businesses in New Zealand are small
and operationally focused.”
“Other barriers
include an inbuilt resistance to change and a lack of trust
in AI as a technology. There is also the technical challenge
of having to integrate AI within existing systems and data
architecture.”
“Education is key to overcoming
many of these barriers, either to demystify what AI is or to
alleviate concerns relating to job losses. Other steps
include developing an AI strategy with clearly articulated
goals, having the appropriate data governance frameworks and
process controls in place, reskilling workers so they can
work in an AI powered world, and having access to the
appropriate AI integration tools,” Mr Clark
says.
“Firms who do not adopt AI will lose
competitiveness. Without a unique value proposition, we
think it will become increasingly difficult for firms who
remain tied to the past to match the productivity gains of
those that adopt AI.”
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“That said, as AI adoption
deepens overseas and the competitive benefits of it become
more widely acknowledged, we think more firms in New Zealand
will look to AI for a competitive edge. That is likely to
set off a virtuous AI investment cycle, which will intensify
competition and generate ever greater levels of industry
rivalry.”
“That competition will not just be about
achieving supremacy over traditional rivals. AI will lower
barriers to entry, allowing new market entrants and smaller
firms from within the same industry to compete on a more
equal footing with larger incumbents. We think that some
larger firms encumbered by silo structures, defined
hierarchies and legacy systems may struggle against these
smaller AI powered rivals.”
“That is not to say
they will not be able to compete. Large firms too have
competitive advantages. While they may find it more
difficult to completely embrace AI, they will still be able
to apply it to specific end uses that deliver superior
returns, leveraging off larger proprietary data sets to
deliver hyper personalised customer
experiences.”
© Scoop Media
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