Mapping AI Solutions in Japan s Society 5.0

Transcription

1 Mapping AI Solutions in Japan s Society 5.0 An IPsoft/AI Pioneers Forum White Paper Chetan Dube CEO and President, IPsoft Mark Minevich, Chairman of AI Pioneers Forum, Digital Fellow to IPsoft CEO, member of B20/G20 Digital Economy Taskforce, Senior Advisor to UN Office of Project Services 1

2 Introduction Society 5.0 is poised to a be transformative initiative for Japan unlike anything any industrialized country has experienced. We believe that Society 5.0 will create a new global economic model and growth engine by embracing cutting-edge technologies, and applying fresh thinking to pervasive and persistent societal problems. Through its commitment to this initiative, Japan is committed to ushering in a new era of growth, health and prosperity for its citizens. The projects and ideas associated with Society 5.0 which broadly cover infrastructure, financial services technology, healthcare, and mobility/logistics areas are ambitious in scope. The common goals uniting these areas are a desire to improve citizen-focused services, make the delivery of services more efficient, provide new services so citizens can lead healthier and more productive lives, and (to a lesser degree) enable longer-term financial savings and benefits. New and innovative technology is a major underpinning for all of these goals, and none more so than Artificial Intelligence (AI). Japan is a country that has embraced AI in many forms, and the government seeks to extend its leadership through a variety of avenues including Society 5.0. Current investment levels stand somewhere around $10 billion, according to most estimates, growing to more than $2.1+ trillion by This is a phenomenal 35% compound annual growth rate (CAGR) over nearly 20 years. Society 5.0 envisions a world where automation, cognitive technologies and other AI-related solutions result in better healthcare access and delivery for rural areas through virtual AI caregivers, improved transportation and logistics using conversational AI interfaces, and proactive maintenance of roads and bridges leveraging analytics in AI solutions, to name just a few of the potential initiative outcomes. In this white paper, we examine the current and future growth of the AI market in Japan, including how cognitive solutions can enable Society 5.0 and more importantly, how this economic growth will power the Society 5.0 initiative. Vendors, suppliers and providers that look to increase their own AI-related investments and activities will be ideally positioned to play an integral role in making Society 5.0 a reality. 2

3 Explosive Worldwide Growth of AI AI is a technological force rarely seen in history: an innovation that has uses across almost every type of human interaction and activity, coupled with adoption rates almost unmatched in human history. These adoption rates are important to take note of, as it necessitates a sense of urgency for business leaders to make decisions and investments about AI. The general rise in standards of living and consumer expectations lead to faster adoption of new technologies of all kinds. It is therefore in the interest of businesses that provide goods and services to consumers or other businesses to adopt new technologies. This is the driving factor behind the rapid growth of advanced technology overall, and AI in particular. The definition of AI varies from researcher to researcher; therefore, the market size forecasts vary. However, the majority of estimates tend to be about a $10 billion market in 2018 growing to $2.1+ trillion by This is a phenomenal 35% compound annual growth rate over nearly 20 years. Even in the short run, the AI market in 2025 is forecasted to be 10x the current market size of about $100 billion. Whatever the forecast and whoever the forecaster, there is an unmistakable consensus that the AI market is going to experience explosive growth for the foreseeable future. What s more, reflecting the market size and adoption, businesses are ranking AI technology as the highest priority technology spend over the next two years. In other words, AI is a market innovator that businesses need to focus on. 3

4 AI Market in Japan Forecasted to Grow Nearly 2x the Global Average IDC estimates that AI investments by Japanese companies will grow at nearly 75% compound annual growth rate through This means that the AI market size doubles about every 18 months. The result is that by about 2020 the Japanese AI market will be about $200 billion, and about $770 billion by 2030; roughly one-third of the global AI market. There are sectors of the Japanese economy that are more aggressive than others in their investments in AI, as shown in the charts. Japan faces a number of formidable challenges for future prosperity of its society and its leadership in the world both economically and politically. Many of these challenges are rooted in the aging of Japanese society and the shrinking population. More than a quarter of the population is over 65 years old, compared to about 15% in the US and less than 10% globally. These shifting demographics have a derivative economic impact of slower economic growth. After a long period of generally impressive economic growth, real GDP change has been generally under 2% for the past 20 years with a serious recession 2008/2010. In the last five years, economic growth has been particularly sluggish. As a solution to these demographic and economic challenges, the Japanese government under the leadership of Prime Minister Shinzo Abe has initiated a bold and visionary program of public/private partnership called Society 5.0, Japan s vision for the next step in human evolution. The practical goal of Society 5.0 is to achieve sustainable growth that will benefit Japanese citizens with a better standard of living and greater prosperity. The four pillars of productivity, smart regulations, international opportunities, and competitive business will be enabled by a combination of a good governmental, legal, and educational environments. However, core to each of these pillars is the increasing (and increasingly innovative) use of technology. 4

5 AI is the Most Necessary Technology for Society 5.0 The core technologies essential to Society 5.0 are AI, IoT, big data, FinTech, blockchain, and robotics. Each is fundamental to the realization of the vision and achievement of results. All these technologies are important, but at IPsoft and AI Pioneers Forum, we believe AI and cognitive technologies will likely be the most impactful. Japan s service sector accounts for about three-quarters of its total economic output. To support Society 5.0, Japan will need to transform its service industry with the automation of knowledge work. This will be achieved by AI and conversational AI in particular. The value of automation and access to critical data is well established in improving everyday activities and support for businesses and consumers. And, AI more than minor improvements in the efficiency of tasks, but a fundamental part of the overall company strategy on many fronts from back office operations to customer-facing activities that are executed better, faster and cheaper than how they are currently. AI is particularly important to Japan due to its demographic realities. With the aging and declining population, there will be increasing demand for technology to take on tasks and processes that now require human capital. By using AI, Japan frees up human intellect to have time for greater of innovation and more complex thinking. A New Paradigm of Innovation and Software A good argument can be made that Japan became a global economic power based on the advancements and quality of manufacturing and the related technologies like robotics. However, much of the software needed to make the machines work was developed in-house to protect intellectual property. The age of doing everything internally and the not invented here mindset is coming to an end quickly. The technology is so sophisticated and evolving so rapidly, it requires a near fanatical organization-wide focus on specific technologies to be successful. Japanese companies are increasingly adopting a more open approach to innovation through partnerships, startups, Silicon Valley labs and the like. For example, in 2016 Toyota established a R&D unit in Silicon Valley to take advantage of the most concentrated source of technology innovation in the world. Artificial Intelligence and automation technology have advanced so rapidly in the last five-to-ten years that the promise of wide-spread practical and commercially feasible solutions is being realized. Uses of AI would have been science fiction just a few years ago are now being used by businesses and consumers around the world. 5

6 The trend is only going to continue as huge amounts of capital are being invested in established companies and startups to find new and expanded ways to apply AI to everyday activities that now consume human energy, brain power, and time. Under the leadership of Prime Minister Shinzo Abe, the Japanese government, in partnership with commercial enterprises like Hitachi and its visionary Chairman Hiroaki Nakanishi KBE is sponsoring ambitious efforts to harness the advancement of technology in a drive for Society 5.0: a super-smart societal transformation leveraging the rapid increase in AI and related automation technologies. The rapid advancement of these technologies enables the merging of cyber space information with the physical space the real world in ways never before possible. The combination of Cyber Physical Systems (CPS), objects of the real world enhanced and combined with information is expected to bring about a major shift in society. While this merging of the cyber and the physical is enabled by rapid advancements in technology, it requires more than just technology to be fully realized. Society 5.0 also involves transformations in governmental, legal, and educational systems. This broad and ambitious vision drives the need for public/private cooperation and strategic alignment. This is where the leadership of commercial firms like Hitachi play a crucial role in the practical application of technology for society s benefit while still serving the needs of shareholders. The end result is that Hitachi has an opportunity to play a crucial leadership role in the beneficial transformation of Japanese society while still serving the practical financial needs of its owner shareholders. 6

7 Potential Society 5.0 Use Cases for AI AI is currently being implemented in numerous ways across multiple industries. In the relatively near future AI implementation will rise significantly. The advancement of AI tools will be a large reason form their democratized adoption, however other factors such as a larger labor market with the necessary tools and skills to drive AI R&D or simply implement AI will play a large part. As this takes place, industry specific teams will create new innovative ways to utilize AI beyond our current comprehension. In the meantime, below are ways that AI can (and in many cases, already is) be implemented within four key industries. 7

8 Healthcare Japan is facing an aging society ahead of other countries. This means more healthcare is needed to support more people for a longer period of time as people live longer. This issue is further compounded by a shrinking population, which means there are less people to support the increasing number of people in need. Another issue facing Japanese Healthcare is patient access to essential healthcare services. AI can assist in a number of ways. One of the solutions AI provides is the automation of administrative and bureaucratic tasks which hinder productivity in the industry and is one of the main causes of burnout for those in the healthcare profession. Cognitive AI technologies can help by considerably shortening the time needed to perform administrative tasks, thus allowing doctors and nurses to concentrate more on actually providing healthcare. Hospitals and healthcare services can be improved with AI taking over many routine tasks such as booking appointments, general reception and concierge services necessary to help run the service. Service levels improve whilst costs plummet. Furthermore, Cognitive AI can act as a whisper agent to doctors and nurses providing advice and finding information on request. AI technologies will also improve mobility (which we will expand on below) and improve the monitoring of healthcare in a more decentralized manner. This means patients can be monitored at home and healthcare becomes more routine and increasingly preventative rather than reactive. Conversational AI makes it easier for everybody (including the less technologysavvy) to manage their healthcare from home. They no longer need to see or speak to their doctor to see what their healthcare plan is, see when their next appointment is or request a new prescription. They can simply ask, and in many cases their needs can be autonomously resolved before any human intermediation is required. The faster analysis and comprehension of huge amounts of healthcare data will also help speed the development of cures and counter-measures. Areas such as Alzheimer s present a huge problem for Japan and its economy. Currently, about 28% of the over 65 population has Alzheimer s, or about 4.6 million individuals. This costs the Japanese economy 14.5 trillion yens annually. Furthermore, more people are compelled to drop out of work to look after affected family members, which causes additional impacts on the Japanese society. AI s tools will be welcomed as we look for cures to eradicate or curb the effects of Alzheimer s. Connectivity will also allow information to be shared between medical data users including medical checkup records, as well as treatment and nursing care records, meaning more informed decision making and the centralization of health service. 8

9 Mobility A declining population and increasing trend for urbanization will result in under populated rural areas with limited access to public transportation. A growing dependence on ecommerce will also see those in rural areas need greater connectivity. Autonomous vehicles, drones and new innovations such as single-driver cargo truck convoys will also provide greater mobility with less distribution labor. Drones in particular will be used across a number of industries to deliver necessary goods to rural destinations in a cost effective manner. AI will also impact mobility in other areas, such as job mobility. New technologies such as ubiquitous and powerful 5G networks as well as augmented and virtual reality platforms will diminish the need for a central physical workplace and allow users to work from anywhere in the world. Infrastructure Transportation will see a monumental shift in investment over the coming 15 years as it jumps from one of the least invested industries to one of the most. On top of that, transport will receive the biggest share of the Japanese AI market. Much of the reason behind this is the deteriorating public infrastructure that was developed during Japan s rapid economic growth period. Whilst this infrastructure will require increasing maintenance and inspection, there will be dwindling levels of resources to do so. AI and other technologies such as robots, drones, sensors and IoT will help solve these problems. Sensors and connected devices will allow the continuous monitoring of infrastructure and transportation vehicles to make sure they remain in a healthy state. Not only will these technologies inform us when the state of infrastructure goes outside the barriers of what we deem acceptable, but they can alert us to what the problems are and suggest a solution. In some cases, these problems will be fixed autonomously. AI-aided infrastructure will improve productivity, while also bolstering public safety. Fintech The Fintech industry will be impacted by a vast array of technologies. Blockchain is perhaps the most clear solution that will help with secuirty, transparency and a less fraudulent society. Biometrics will also improve secuirity and convenience Cognitive AI is already bearing results and helping progress towards the goals of Society 5.0 including a cashless society, and a more customer centric one as well. Conversational AI such as IPsoft s Amelia is already providing customer support in financial services handling deposits, trades, trading platform usage, networking, and customer on-boarding, deposits and payments etc. Omni-channel integration, including conversational AI agents, means finance and banking moulds service around the customer. As adoption grows, society will be less dependent on cash and phisical banks. New deep learning cyber solutions will also be developed to offset the growing dangers from cyber attacks and hacking. 9

10 Recommendations Society 5.0 is built with a high-level plan and guidelines. We now need to find how we can use technology to better the welfare of society, people and the ecosystem they live in. With a rapidly aging population, depleting workforce, diminished quality of life, energy and resource sustainability issues, as well as transportation challenges, these concerns are very close to home for the Japanese society. One of the key elements is to integrate technology into daily life in as seamless a way as possible. Not only will this help remove barriers for large sections of the population (such as those that are not tech-savvy), but it transfers from the tech itself to those who benefit from it. The Japanese plan for Society 5.0 gives us an exciting view of how technology can positively affect our lives in fields such as mobility, healthcare, food, agriculture, manufacturing, energy and disaster prevention. What we need to make sure of is that, as a society, we don t become irrelevant in the face of that technology. In the long run, this won t be an issue as we will naturally evolve to find new areas where we will excel above machines. However, in the short term, whole sections of the population may find themselves unprepared for those changes. This has happened before in past industrial revolutions, and so we must prepare for it to happen once more. We need to figure out now what we should do to help people find relevance, prosperity and meaning during the transitional period, rather than loss and despair. 10

11 Contributors Chetan Dube has served as the President and CEO of IPsoft since its inception in During his tenure, he has led the company to create a radical shift in the way IT is managed. Prior to joining IPsoft, Chetan served as an Assistant Professor at New York University, where his research was focused on deterministic finite-state computing engines. Chetan is a widely recognized speaker on autonomics, cognitive computing and the future impact of a digital workforce. He serves on the board of numerous IT-related institutions. Mark Minevich is Digital Fellow to the IPsoft CEO, heading up strategic initiatives designed to advance discussions and leadership around AI and the digital economy. In addition to serving on the executive team at IPsoft, Minevich is also a senior fellow, AI & emerging technology, for the United States Council on Competitiveness and a senior advisor of global innovation & technology for the United Nations Office of Project Services (UNOPS). He is also an appointed member of the B20 digital taskforce for the G20. IPsoft is the world leader in Enterprise AI and the home of Amelia, the industry s most-human digital AI colleague. Amelia s ability to learn, interact and improve over time makes her the market s only AI that can fully understand user needs and intentions. Amelia can be trained to recognize words and phrases in more than 100 languages. She delivers real-life business benefits including lower operating costs, higher customer satisfaction and increased employee productivity. IPsoft was the first company to launch an end-to-end digital platform, 1Desk, to deliver shared enterprise services. By connecting front-office conversations to back-end systems, IPsoft automates business processes that serve employees, customers and citizens, resulting in rapid resolutions, satisfied users and substantial organizational savings. Headquartered in New York City, IPsoft has offices in 13 countries and serves more than 550 of the world s leading brands directly, including more than half of the world s largest IT services providers. The AI Pioneers Forum is an evolving initiative to deliver a roadmap to real returns on AI. The Forum is a community of the world s leaders in AI from business, government and academia. Members meet on a monthly basis to exchange ideas and discuss the newest AI trends, business practices and use cases, from pilots to deployment. The group also analyzes the overwhelming volume of proposed AI solutions on the market, and synthesizes de-risked solutions for organizations to realize tangible returns on their AI investments. 11

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