In my last blog, the eighth UN sustainability goal: “Promote sustained inclusive and sustainable economic growth, full and productive employment and decent work for all,” was explored. This blog covers the UN sustainability goal 9 on innovation and infrastructure, and identifies ways that AI is adding value to support goal 9, and also highlights relevant market economic patterns.
Innovation is key to solve complex economic and environmental challenges, such as increased resource and energy-efficiency. Globally, investment in research and development as a percentage of GDP only increased from 1.5 per cent in 2000 to 1.7 per cent in 2015 and remained almost unchanged in 2017, but was only less than 1 per cent in developing regions. This trend is not positive as we look ahead to 2023 with the pandemic after-shock continuing to impact over 3.6 billion people who remain offline, do not have access to online learning education, ease of employment or health and sanitation needs.
Let’s look at a few more facts:
- In 2018, over 96 percent of the population, lived within reach of a mobile-cellular signal, and 90 per cent of people could access the Internet through a third generation (3G) or higher-quality network.
- The global share of manufacturing value added in GDP only increased from 15.2% in 2005 to 16.3 percent in 2017, with still the fastest growth in manufacturing driven by Asia. This decline will impact global infrastructure innovation and ripple through economies. Hardest hit will continue to be the less developed economies, in particular Africa.
- In 2019, the amount of new renewable power capacity added (excluding large hydro) was the highest it has ever been at 184 gigawatts, 20GW more than in 2018. This included 118GW of new solar systems, and 61GW of wind turbines.
- Capacity investment in solar slipped 3 per cent to $131.1 billion in 2019, while that in wind climbed 6 per cent to $138.2 billion
- Investment in R&D needs to accelerate, in 2014 $1.4 trillion was invested in R&D and as of 2018 only at $2.2 Trillion
To modernize our world’s infrastructure, stronger investments are critical in infrastructure enablements to fuel innovation, much of it which is dependent on AI, Internet of Things, Robotics to modernize infrastructure especially on communication networks.
However, modern infrastructure also requires continued investment in roads, railways, needed to transport goods and people, plus ensuring power plants can support the needs of the vast communication networks.
According to Oxford Economics, the global infrastructure investment needs to be $94 trillion between 2016 and 2040. This is 19 percent higher than would be delivered under current trends, and is an average of $3.7 trillion per year. To meet this investment need, the world will need to increase the proportion of GDP it dedicates to infrastructure to 3.5 percent, compared to the 3.0 percent expected under current trends.
Also we cannot forget this alarming factoid that with Covid-19, the aviation industry has also lost over 300 billion due to the global pandemic, and airlines are one of our most significant logistics and transportation networks supporting our global infrastructure dynamics.
Hence in summary, the innovation and infrastructure investments across the globe to achieve Goal 9 are not making their mark. Covid-19 has on one hand propelled many industries ahead, but on the other hand impacts in manufacturing have steeply declined. Deloitte projections based on the Oxford Economic Model (OEM) anticipate a decline in annual manufacturing GDP growth levels for 2020-2021, with a forecast of -6.3% for 2020 and 3.5% for 2021.
Despite these global market dynamics, investments in Artificial Intelligence have been growing. Here are a couple more facts:
- Over two-thirds of senior executives across industries cite AI as vitally important to the future of their businesses and plan to increase their investments post pandemic. The Driving ROI Through AI Report shares that companies increased investments by 4.6% on average over the last year with a plan to invest 8.3% per year over the next three years,
- Markets and Markets experts predict that the market will reach $191 billion by the year 2025, quite a jump from the approximately $40 billion that the market is valued at currently.
How can AI advance innovation and infrastructure modernization?
As we already know, AI is a powerful engine of productivity and economic growth. AI is an excellent innovation that improves decision-making of almost every complex business process, given its appetite to analyze large volumes of data and perform complex calculations that humans simply cannot perform.
Research launched by Accenture covering 12 developed economies, which together generate more than 0.5 % of the world’s economic output, forecasts that by 2035, AI could double annual global economic growth rates.
AI enables stronger increase in labour productivity (by up to 40 %) due to innovative technologies enabling more efficient workforce-related time management. Pricewaterhouse Coopers (PwC) further estimates that the global GDP may increase by up to 14 % (the equivalent of US$15.7 trillion) by 2030 as a result of the accelerating development and take-up of AI.
Lets now look at ways AI is supporting infrastructure innovations and highlight a few initiatives in two industries: Construction and Manufacturing and in the Transportation Industry on Road Infrastructure Intelligence
AI in the Construction Industry
Globally, businesses spend over $10 trillion per year on construction-related activities and is projected to keep growing by 4.2% until 2023. In the 2020 McKinsey report, The Next Normal in Construction: How Disruption is Shaping the World’s Largest Ecosystem, they identified a number of construction solutions using AI.
New ways of working in construction will be accelerated use of robots to evaluate job progress, track the location of workers and equipment, enables project managers to tell instantly which job sites have enough workers and equipment to complete the project on schedule, and which might be falling behind where additional labor could be deployed. The ability to aggregate data patterns from all equipment and people movements as man and machine interfaces continue to flow data insights will change how construction is done.
Robotics, AI, and the Internet of Things can reduce building costs by up to 20 percent. Engineers will increasingly use virtual reality smart goggles and deploy smart and more mini robots to perform repeatable work tasks. These robots will use cameras to track the work as it progresses and report back, even help plan the routing of electrical and plumbing systems in modern buildings to do more agile planning. AI will be able to track the real-time interactions of workers, machinery, and objects on the site and alert supervisors of potential safety issues, construction errors, and summarize and report on productivity issues.
AI in Transportation /Road Intelligence
Roads are foundational to enabling people to transport goods and services, conduct business and cities play an important role as mega city infrastructures continue to be the hot bed to live. Although Covid-19 sent many residents to live in more remote and safer locations, the attractiveness of smart infrastructure will roar back in 2022 like nothing we have experienced before.
The value of AI in smarter roads is that AI, IoT make it easier to monitor, collect, and analyze traffic patterns and make adjustments or improvements in real time. With collections of sensors, cameras, adaptive traffic lines, data collection methods traffic can be easily be rerouted, identify road condition issues, and even analyze Co2 emission levels to support environmental goals.
Why road infrastructure intelligence is worth highlighting in the UN Goal 9 is very much driven by this key fact – For an average US citizen, congestion costs 99 hours of their time and USD 1,377 each year. Smart road technology can track vehicles and adjust traffic lights when there are fewer or no cars approaching, helping prevent bumper-to-bumper traffic. This could help drivers and passengers save 9.4 hours each year.
The construction and transportation (road) industry are just two examples undergoing significant changes enabled by AI, IoT, Smart Sensors and massive data consumption and analytic methods.
Striving to advance the UN goal #8 supporting accelerated innovation and infrastructure modernization is a board director and CEO level responsibility.
We need to have bolder conversations, demonstrate more courage, and find pathways to unlock more innovation capacity and infrastructure investments.
Furthermore, boards have an important role in ensuring their CEO leadership is effectively managing both the potential of AI and also increasingly its organizational risks—including ethical, and reputational risks.
It is part of a board’s fiduciary responsibility to oversee AI and its potential impact on the business, but also ethically on society and strive to make our world a better place.
The United Nations developed in 2015 the Sustainable Development Goals as an universal call to action to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere. The 17 Goals were adopted by all UN Member States in 2015, as part of the 2030 Agenda for Sustainable Development which set out a 15-year plan to achieve the Goals.
To see the full AI Brain Trust Framework introduced in the first blog, reference here.