Nordea’s Global Co-Head of Corporate & Investment Banking Mathias Leijon describes how artificial intelligence could lower inflation and boost productivity on the macro level. He argues companies will need to change three areas to overcome hurdles posed by legacy systems and structures. These are as following:
- Decision-making dynamics
- Corporate culture
In so doing, these companies can articulate a data strategy and embrace and exploit AI and machine learning.
Generally, how do you think the rapid development of artificial intelligence in recent years will affect the economy and corporates?
Mathias Leijon: In the field of AI, there are so many areas that are relevant, and it is easy to be directional and look ahead and extrapolate – and the more futuristic that AI becomes, the more attention it captures.
The reality today is that we have come further than we thought, but at the same time we have not moved the needle in comparison with the vast possibilities. Take Waymo owned by Alphabet (Google) as an example, which develops autonomous cars. In 2018, during the operation of its self-driving vehicles, there was only one manual driver intervention per 11,018 miles driven in California. This is truly amazing.
Another area that will be, and most likely already is, impacted is inflation. As many goods and services are new, have zero marginal costs and are offered in highly competitive environments through digital platforms, the result is lower prices. Potentially (or some would argue, likely), traditional statistics fail to capture the increases in real customer value at lower costs. Taken together with many of these new players being loss-making, this understates the actual underlying and likely future inflation. A third exciting area for discussion could be the productivity explosion that we will probably see over the coming decades.
Interested in more insights on AI? In the latest Nordea On Your Mind report, Mathias Leijon answers vital questions like:
- From what you are seeing, are companies ready to adopt and exploit AI in their businesses?
- And what do corporates need to do to start benefiting from machine learning?
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