Let’s talk about AI and business!
Artificial Intelligence is one of the fastest-growing technologies today and it has already started to revolutionize various industries, including international business. AI is a branch of computer science that involves the creation of intelligent machines that work and think like humans. In international business, AI is becoming increasingly popular due to its ability to automate tasks, provide real-time insights, and enhance decision-making processes.
One of the key benefits of AI in international business is its ability to automate repetitive and everyday tasks. For instance, AI-powered chatbots can help companies handle customer service inquiries, order processing, and other routine tasks, helping employees to focus on more complex and creative work. This can increase efficiency and productivity, resulting in cost savings and higher quality output. AI can also automate supply chain management, allowing businesses to optimize their inventory levels, reduce waste, and improve order fulfillment.
The ability to provide real-time insights and analytics is something this technology offers to business. AI can analyze vast amounts of data and provide insights on customer behavior, market trends, and competitor activities. This can help businesses make data-driven decisions and stay ahead of the competition. For example, a company can monitor social media activity and track customer sentiment, allowing them to adjust their marketing strategy accordingly.
AI can also enhance decision-making processes, AI algorithms can analyze data and identify patterns that employees may overlook, leading to improved and more accurate decisions. This can be particularly useful in complex and high-stakes decisions, such as mergers and acquisitions or international expansions. This technology may also help companies identify and mitigate risks, such as financial fraud or cybersecurity threats, by providing real-time alerts and predictive analytics.
The OECD published an article (2022) that discusses the potential benefits of artificial intelligence in international trade. While there is a growing use of AI technologies in specific sectors, such as finance, insurance, and online consumer platforms, empirical evidence on the links between AI and productivity is only just emerging.
According to the OECD (2022) Artificial Intelligence has the potential to enable greater supply chain efficiency, including streamlined and automated smart manufacturing, improved predictions about consumer demand, and better decision-making about the location of production. It can also help with other policy objectives, such as reducing greenhouse gas emissions in supply chains by optimizing logistics operations.
AI promises to reduce trade costs by improving logistical efficiency, better connecting supply and demand, and reducing language barriers. Use of AI in customs and other border agencies for trade facilitation may also contribute to further trade cost reductions.
Despite its benefits, AI also poses some challenges for international businesses. One of the main challenges is the cost (time and money) and complexity of implementation. AI requires significant investment in hardware, software, and skilled personnel, which may be prohibitively expensive for smaller companies. Moreover, AI implementation requires a significant change in business processes and culture, which can be difficult to achieve.
Another challenge is the ethical and legal implications, international businesses must ensure that their AI systems comply with local laws and regulations, as well as ethical standards, to avoid potential legal and reputational risks.
As new technologies are continuously being developed and introduced, it becomes challenging for companies to keep up with the rapid progression. In recent times, Data Science has become a hot topic due to its ability to analyze massive amounts of data to develop insights, predict potential risks, and create solutions. While implementing this technology can be challenging, companies realize the importance of Data Science and its potential impact on their software products (McRorey, 2022).
McRorey (2022) states that finding qualified talent to implement these technologies can be difficult, especially in the United States and Canada. This is where Mexico comes in. With the most significant number of STEM graduates in the Americas, Mexico boasts a large pool of Data Scientists, Machine Learning experts, and AI specialists at a fraction of the cost. Framework Science has taken advantage of this talent pool by creating a Nearshore Product Development Excellence center in Mexico, using proprietary data technology to identify top Computer Science talent across the country.
AI can help SMEs improve their customer experience and engagement. For example, chatbots powered by AI technology can provide 24/7 customer support, handle routine inquiries and free up customer service personnel to focus on more complex issues. AI-powered customer service systems can also collect and analyze customer data, allowing SMEs to personalize their marketing and sales strategies and improve their overall customer experience. By using AI to provide better customer service, SMEs can differentiate themselves from their competitors and build a loyal customer base.
Many SMEs have limited resources and must operate with lean staff. While with AI technology automatization for routine tasks may be done, such as data entry and inventory management, freeing up employees to focus on higher value-added work.
AI can help SMEs innovate and stay ahead of the competition. SMEs often face the challenge of limited resources and expertise in research and development. However, AI can help SMEs innovate and develop new products and services. For example, SMEs can use AI to analyze customer feedback and identify unmet needs, which can inform their product development process. AI can also help SMEs optimize their pricing strategies, develop new revenue streams, and explore new markets. By using AI to drive innovation, SMEs can differentiate themselves from their competitors and stay ahead of the curve.
The use of AI technology in small and medium-sized enterprises has become increasingly relevant in today's business environment. By leveraging AI, SMEs can improve their customer experience and engagement, streamline their operations, gain insights into their business performance, and drive innovation. As AI technology becomes more accessible and affordable, SMEs should explore its potential applications to stay competitive in their respective markets.
About the future of AI in business, an article of WCO news emphasizes the importance of striking a balance between the use of AI and human expertise to ensure that ethical and legal considerations are taken into account. The article concludes by encouraging customs administrations to embrace the opportunities presented by AI and invest in developing the necessary skills and infrastructure to harness its potential (Shamirzayan, 2022).
McRorey, L. (2022, February 4). The Mexico Nearshore: Data Science, Machine Learning, and Artificial Intelligence Opportunity for U.S. Companies. Retrieved from https://www.fwscience.us/blog/the-mexico-nearshore-data-science-machine-learning-and-artificial-intelligence-opportunity-for-u-s-companies
Radford, A., Wu, J., Child, R., Luan, D., Amodei, D., & Sutskever, I. (2019). Language models are unsupervised multitask learners. OpenAI blog, 1(8), 9.
Shamirzayan, A. (2022). Future of trade: AI. WCO News, (99), 32-35. Retrieved from https://mag.wcoomd.org/magazine/wco-news-99-issue-3-2022/future-of-trade-ai/