AI as a game changer is expected to drive economic impact by gaining: (a) productivity from business automation processes, including the use of robots, (b) productivity from businesses augmenting human intelligence using AI technology such as chatbots and (c) consumer demand by enhancing the quality of products and services through the higher quality of AI.

The higher the quality of AI, the higher the benefits that can be reaped to improve the quality of products, such as the ability to tap into consumer insights by having more comprehensive data collections with various cycles that show consumer preferences. AI can drive more innovation and differentiation in developing new business models. The development of AI is still at an early stage for emerging markets, but the opportunity is big to grow and leapfrog the higher quality AI in developed countries.

Currently, capital-intensive sectors such as manufacturing are likely to experience the biggest productivity gains from AI.

However, according to findings by PwC in its AI Impact Index, the greatest AI potential is seen in healthcare services. AI in health care can support diagnosis in patients’ health data, as well as early identification of potential disease or illness, also having image diagnostics such as radiology. For future higher technology of AI in health care, robot doctors will be the next greatest AI implementation.

The challenge will be jobs or roles that are potentially lost in the adoption of AI. However, PwC predicted in a report as quoted by Business Insider, 12 percent of jobs in the healthcare services sector will be replaced by AI, while it will simultaneously create 34 percent new jobs.

Furthermore, for the automotive sector, AI has already been widely implemented, such as in automated driver assistance systems, including parking assistance. In the near future, it is aimed that there will be autonomous maintenance for cars and machinery with AI technology.

Moreover, financial services providers continue to innovate in providing value-added services to customers by developing machine learning systems, using the AI system. Machine learning is developed to help institutions carry out operational tasks. It covers not only the back office, but also identification of common customer requests and
transactions.

One such innovation that has been developed is a chatbot or robo-advisor, AI technology that has been implemented in the banking industry to serve common customer questions and requests, as well as problem solving. In the longer term, AI is expected to detect fraud, money laundering and help prevent losses, to improve its services to clients or consumers. And it is not only these sectors that will be greatly impacted by AI development, but also other key sectors such as retail, transport, logistics, energy, communications and entertainment.

Based on this year’s Government AI Readiness Index compiled by Oxford Insights and the International Development Research Centre (IDRC), AI higher rankings are led by countries with strong economies with good governance, good infrastructure and data, higher skills and education as well as government and public services.

This report has scored 194 countries in the world. Singapore is ranked highest for AI readiness index in the world with a score of 9.186, and the United Kingdom is in second place with 9.069. Other Western countries follow, namely European countries, the United States, Canada, Australia, New Zealand and Japan. India is ranked 17th (7.515) and United Arab Emirates (UAE) in 19th (7.445). They rank higher than China, which stood in 20th position (7.370). The lowest performing countries are African and Asia-Pacific countries.

Indonesia is ranked 57th in the world with a score of 5.420, behind Thailand in 56th (5.458), Philippines in 50th (5.704) and Malaysia in 22nd (7.108). As stated previously, Singapore is top of this AI readiness index, because Singapore shows its fair algorithm, openness, transparency in policy and regulatory frameworks and well-explainable issues (if any) in order to foster the responsible use of AI and innovation.

In the Middle East, the UAE government has already announced the world’s first dedicated AI minister. The UAE has given a strong signal to the world that the UAE has a strong commitment to developing AI. Not only the UAE, Qatar and Saudi Arabia have already invested heavily in new technology in smart cities and autonomous vehicles.

Although Indonesia’s rank in the AI readiness index is relatively low, Indonesia has already planned to initiate AI adoption into the economy from the government’s side. President Joko “Jokowi” Widodo has just started to eliminate the echelon 3 and 4 public servants in government agencies and replace their roles with AI robots.

This decision shows that Indonesia has a strong initiative in facing the era of dynamic change. The President has elaborated that speed in making decisions is desirable.

In the early stages, AI will help government agencies to carry out administrative tasks in order to simplify the bureaucracy.

One of the challenges will be that the presence of AI continues to have the effect of reducing employment, but new types of jobs or roles will emerge from the use of artificial intelligence. In the future, the effect of AI will be highly influential on the availability of jobs, meaning that the number of jobs that exist today could possibly be eroded by the automation of AI.

In increasing the capabilities of AI, the government needs to have a focal point in “datafication” (availability to capture data) and availability of data by fostering AI fundamental research. AI capabilities are also driven by a strong science, technology, engineering and mathematics (STEM) education system in order to strengthen research and development.

Openness and transparency in regulation are also important in attracting heavy investment in technology. Furthermore, AI ethics standards, reference governance frameworks and AI practical guidance for businesses have to be developed, as constant higher technology would disrupt societies, hence AI’s adoption would benefit human development precisely.

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