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What is artificial intelligence? Defining it in business – a CTO guide

In the dictionary, Artificial Intelligence is defined as: the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.

This guide will focus on what is artificial intelligence, in the context of business, with insights from CTOs and AI experts.

The Exploration Of Intelligent Behaviour

Harald Gölles, the CTO of omni:us, says that — broadly — “artificial intelligence (AI) is the exploration and development of intelligent behaviour in machines”.

“Businesses can rely on dedicated AI solutions to take automation to the next level and solve complex practices that are often too complicated and costly to maintain.”

Just An Algorithm

Hari Mankude, CTO at Imanis Data, believes that at this point, AI is just an algorithm.

“There’s little ‘intelligence’ in terms of autonomous, experience-based decision-making. The science behind it is complex, but the real importance here is that businesses are beginning, after years of doubt, to trust AI (in this case, machine learning) to manage the enormous scale and granularity of big data that enterprise otherwise are really struggling to protect and analyse.”

“I think we’re truly cresting a wave of early adopters who have taken the plunge, and I think the decision-making behind that is interesting.”

Useful Decisions

Ed Bishop, co-founder and CTO at Tessian, suggests that artificial intelligence can be used to describe computer systems that are able to receive inputs and make relatively useful decisions based on those inputs.

“For example, AI could be used to identify features of a photo. As a result, insurance companies can use it to evaluate customer-submitted photos of car damage. Combined with the ability to store and process much larger volumes of data, AI allows businesses to extract significantly more value from the many forms of information related to their organisation.”

A Spectrum Of Technologies

John Gikopoulos, Global Head for automation and AI at Infosys Consulting, says it is important to define what artificial intelligence is, because the technology is becoming a bit of a buzzword.

“When we talk about AI, we’re talking about a spectrum of technologies ranging from advanced analytics and the ability to predict outcomes, to robotic process automation (RPA), through to natural language processing (NLP) and deep learning.”

“This is the “laboratory” definition of AI.”

“In the business context, it’s about how these technologies are brought together to help businesses drive value by solving complex organisational challenges in a smarter, faster, more efficient way. The question that any business must ask about their AI deployments is this: Is the technology helping us to make better-informed decisions? That, ultimately, is what AI means for business. The process automation, the ability to learn, the data crunching – these are all the functions rather than the goal of AI.”

“As with any major strategic undertaking, AI should have specific, measurable, achievable, realistic and time-bound objectives. If the combination of technologies described above can deliver these, then it’s a true AI system.”

AI: Part Of Everyday Life & Reliant On Data

Greg Hanson, CTO and VP at Informatica, believes that AI is now ubiquitous in our everyday lives.

“With the continuous advances in machine learning, AI is increasingly able to apply human decision-making capabilities to a plethora of tasks, including organising, indexing and transforming large volumes of complex data.”

“AI is enabling businesses to transform in ways they could never have imagined. In recent years, there has been widespread investment in analytics and predictive outcomes, but companies need to look deeper than just decisions and predictions. From a business perspective, AI can be used to harness and tackle data challenges, to ensure that it makes good quality decisions and provides solutions.”

“The success of AI engines is wholly reliant on quality of data – you cannot just pump vast quantities in and expect a perfect outcome, because that will not happen. It sounds simple, yet businesses’ face many challenges here: combatting fragmentation of data, managing its immense volume and scale, and automating the benchmarking and correction of data to ensure it is high quality, to name a few.”

“Ultimately, a common data strategy that integrates AI into the quality and management of data in the backend is just as crucial as investing in AI to generate output in the first place. If businesses keep this front of mind when deploying AI projects, they are on the right track for success in digital transformation.”

A Non-Linear Impact

Paul Clarke, CTO at Ocado, says that AI, machine learning and robotics are going to have a very non-linear impact.

“That’s what makes this so different from maybe similar technological revolutions that you can point to in the past. The non-linear nature of how those technologies will impact us means that we have to respond in a very non-linear way too.”

“We need some big thinking here; big, joined-up holistic thinking that’s quite disruptive.”

“I think we need to force ourselves to think bigger than maybe we’re used to doing, and that’s true as individuals, it’s true as businesses and institutions and it’s true as governments.”

The Human Brain & Beyond

Kalyan Kumar, Corporate Vice President and CTO at HCL Technologies, explains that in simple terms, “AI leverages self-learning and healing systems that use multiple tools like data mining, pattern recognition and natural language processing, and operates very similarly to the way a human brain functions.”

“With huge amounts of data being churned out of modern-day systems, it is impossible for human brains to consume all that data and make sense of it to enable further business decision making. This is where AI and machine learning come to the rescue, by doing what is impossible for a human being, like correlating, predicting, forecasting, and gathering knowledge at scale, to drive the business forward.”

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Italy to cut deficit from 2020, provides relief to markets

Italy will cut its budget deficit targets from 2020 and reduce its debt over the next three years, Prime Minister Giuseppe Conte said on Wednesday, easing fears about fiscal policy in the euro zone’s third-biggest economy.

The ruling coalition last week stunned investors by tripling Italy’s previous deficit target for the 2019-21 period to pay for tax cuts, welfare for the poor and a planned revision of an unpopular pension reform.

Speaking to reporters after a meeting of ministers, Conte said the government would push ahead with its expansionist fiscal programme but would keep its spending in check.

“We will show courage above all in 2019, because we believe that our country needs a budget that calls for strong growth,” said Conte, flanked by deputy prime ministers Luigi Di Maio and Matteo Salvini, and Economy Minister Giovanni Tria.

Conte confirmed a deficit target of 2.4 percent of gross domestic product (GDP) in 2019 and said this would fall to 2.1 percent in 2020 and 1.8 percent in 2021.

He predicted the debt/GDP ratio would fall beneath 130 percent next year and hit 126.5 percent by 2021. It is currently around 131 percent, the second highest in Europe after Greece.

The government did not release growth targets, but Tria said the gap between Italian growth and the rest of the eurozone would halve next year. The IMF has forecast growth of 1.0 percent in Italy in 2019 against 1.9 percent for the eurozone.

News the coalition planned to cut the deficit faster than previously indicated caused Italian government bond yields to fall sharply on Wednesday, while the Milan bourse outperformed other major stock exchanges in Europe to close up 0.9 percent.

Investments

The coalition came to power in June promising to slash taxes and boost welfare spending, and says an expansionary budget is needed to lift Italy’s underperforming economy, which is some six percent smaller than it was a decade ago before the sovereign debt-crisis exploded.

Tria said the 2019 budget would include a lift in public investment and would offer tax breaks to firms investing in equipment and staff. The jobless rate would fall from around 10 percent now to as low as 7 percent, the prime minister said.

European Commission officials and EU allies had expressed their concern over Rome’s spending plans and there was some relief over the reduced targets.

“It’s a good signal that the trajectory has been revised because it shows the Italian authorities are hearing the concerns and remarks from their partners and the European Commission,” EU Commissioner Pierre Moscovici said in Paris.

Italy’s minister for European affairs, Paolo Savona, went to Strasbourg on Wednesday to try to reassure EU lawmakers that Rome was not being irresponsible.

“I think there is no chance that Italy will default on its public debt,” said Savona, who has previously called into question Italy’s membership of the euro currency.

“I do not intend to take any action against the euro. On the contrary, I want to strengthen it,” he said on Wednesday.

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China hits back at Trump with tariffs on $60 billion of US goods

China is to slap tariffs on an additional $60bn (£46bn) of imports from the United States in retaliation against $200bn of new trade sanctions on Chinese goods announced by Donald Trump.

The latest moves represent a new step towards a full-scale trade war between the world’s two biggest economies. Further escalation is deemed likely because President Trump is facing low approval ratings ahead of the United States midterm elections in November, while China will not want to be seen to back down.

President Trump announced his latest escalation of the bitter trade standoff late on Monday, promising to introduce the additional border taxes of 10% on Chinese goods from next week.

The tariffs – designed to make United States domestic products more competitive against foreign imports – apply to almost 6,000 items, including consumer goods such as luggage and electronics, housewares and food.

The United States president threatened further tariffs on an additional $276bn of goods if Beijing unveils retaliatory measures – a step that would mean tariffs on all Chinese imports to the United States and equate to 4% of world trade.

Early on Tuesday he tweeted to accuse China of “actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me”.

The United States president added: “What China does not understand is that these people are great patriots and fully understand that China has been taking advantage of the United States on trade for many years.

“They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”

However, China then unveiled $60bn of tariffs on US imports including aircraft and coffee.

Ahead of China’s latest move, Jack Ma, the founder of e-commerce giant Alibaba and one of the country’s wealthiest men, warned the conflict could drag on for 20 years and would be a “mess” for all parties.

China faces difficulty in responding on a scale equal to President Trump’s new tariffs because its annual imports from the United States total only about $130bn, while its exports to the United States total more than $500bn.

However, analysts said the Chinese government had a comprehensive toolbox of alternative measures it could deploy to disrupt United States businesses operating in China – and might even devalue its currency to offset the impact of the tariffs.

Erik Britton of research firm Fathom Consulting said he believed China was eventually likely to capitulate and would enter fresh talks to end the threat of tariffs as a result of the trade imbalance.

“Our likeliest outcome is that China yields. They’ve been in a game of chicken – only the United States is driving a 40-tonne truck and China is driving a Fiat Cinquecento.”

Britton added that President Trump was probably using the threat of tariffs to force Beijing to change its economic policies covering United States companies.

“The point is they [the United States] want something to change,” he said. “When I threaten my kids with stopping their pocket money it’s not that I want to raise money. It’s that I want them to tidy their room.”

President Trump has argued Beijing uses “unfair” trade practices such as forcing the transfer of United States firms’ intellectual property when they operate in China. Some analysts, however, said the threat of tariffs could exacerbate these actions, rather than end them.

David Chmiel, the managing director of risk consultancy Global Torchlight, said: “There could be a weaponising of regulation by Beijing. You can see a situation where they target specific United States companies.”

Economists said this could have a significant impact as many United States companies – including Nike, General Electric and Apple – have operations in China. Disruption could range from invasive health and safety checks to tougher labour controls or rules on fire standards. Mergers and acquisitions could be made more difficult, and state contracts could be withheld from United States firms.

Keith Wade, the chief economist at Schroders, said: “Very zealous enforcement of regulations could make life quite difficult for companies. America is also probably more dependent on China than the official trade figures suggest.”

United States Census Bureau figures show China sells about $375bn more to the United States than goes the other way. However, Deutsche Bank reckons taking into account direct in-country sales by United States firms in China would give a $20bn surplus in favour of the United States.

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Former directors face questioning over Carillion’s collapse

The Insolvency Service is to start interviewing former directors of the collapsed government contractor Carillion as it steps up an investigation into one of the biggest corporate failures in recent British history.

Nearly seven months after Carillion entered liquidation, the government agency said it had finished transferring 278 contracts to new suppliers as part of a painstaking process designed to ensure smooth continuity of public services.

Officials are now expected to devote more time to an investigation into why the company failed, including a closer examination of the role played by former directors, who were branded “delusional” by MPs earlier this year.

The service has the power to disqualify people from serving as company directors for up to 15 years if it finds them guilty of misconduct and can pass information to criminal enforcement bodies in the most serious cases.

Earlier this year, the business secretary, Greg Clark, called on the government agency, which has 1,700 staff, to fast-track its investigation.

But while officials are understood to have been in contact with directors, who were accused of “recklessness, hubris and greed” in a report by MPs, they are yet to be interviewed.

The government’s official receiver, Dave Chapman, is expected to start the interview process in the coming weeks following the completion of the transfer of public and private sector contracts.

In a statement, the Insolvency Service said Chapman had “wide-ranging powers to obtain information, material and explanations”.

The inquiry will run alongside two parallel investigations into Carillion’s failure, which is likely to cost the government at least £150m due to the expense of hiring a team from the accountancy company PricewaterhouseCoopers to help manage its liquidation.

The Financial Conduct Authority is looking into allegations of insider trading, while the Financial Reporting Council (FRC) is examining the role played by its auditor, KPMG, and the former finance directors Zafar Khan and Richard Adam.

The Insolvency Service is turning its attention to the directors after completing the “trading phase” of the liquidation, which involved finding new companies to take on contracts for public services such as cleaning hospitals, serving school dinners, and road and rail projects.

A further 429 jobs have been rescued, taking the number saved since Carillion’s collapse to 13,945 – more than three-quarters of the company’s pre-liquidation workforce.

The number of redundancies has reached 2,787, while 1,272 have retired or found work elsewhere, the Insolvency Service said.

A further 240, mainly in Carillion’s former head office in Wolverhampton, have been retained by the Insolvency Service to help wind down its remaining activities.

Chapman said: “Carillion is the largest ever trading liquidation in the UK.

“The continued uninterrupted delivery of essential public service since the company’s collapse in January reflects the significant effort put in by its employees, supported by my team and those employed by the special managers [PwC].”

He said the Insolvency Service was still overseeing the transition of “limited” services to some suppliers and would also work with suppliers who have continued to provide goods and services during the liquidation to make sure they get paid.

“My investigation into the cause of the company’s failure, including the conduct of its directors, is also under way,” he said.

Carillion’s failure in January led to widespread recriminations, with former directors, regulators and the government all facing criticism over a company that managed huge construction projects and provided government services.

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Google just rebranded its $100 billion advertising business

Google, which books more than $100 billion per year in advertising revenue, announced on Tuesday that it is streamlining multiple advertising technologies into three main products called Google Ads, Google Marketing Platform and Google Ad Manager.

While the change is mostly cosmetic, it’s a subtle acknowledgment that consumers are increasingly accessing the internet and viewing ads on a variety of devices, not just on their computers.

About 85 percent of Google’s total revenue comes from its technologies that place advertising on its properties and partner sites. It dominates online advertising alongside Facebook, with the two companies taking in 56.8 percent of all U.S. digital advertising spending, per eMarketer.

Despite this massive success, the company is eliminating the AdWords brand, which launched in 2000 as one of Google’s first advertising products, and the DoubleClick brand, which it acquired in 2007.

AdWords allowed marketers to buy ads on Google properties and partner networks through search terms, text or banner ads (known as display), video ads, or in mobile apps. It brought in $95.4 billion last year according to Google’s government filings. But its name still reflects the days where desktop and websites were the main way to access the internet, and the internet is a much different place from when Google started selling advertising 18 years ago.

Google announced in 2016 that there were more searches coming from mobile than desktop in 10 countries including the U.S. and Japan. Advertisers realize this, and they want flexible ways to reach customers wherever they are, not just on the web.

Google Ads is primarily just a name change for AdWords. Like its predecessor, it will allow companies to buy ads on Google’s ad network across different platforms, including searches, YouTube videos, Google Maps, Google Play, Android Store apps and on partner sites. Instead of buying a specific type of behaviour (desktop viewer, mobile viewer, etc.), Google’s system will allocate advertising dollars across platforms based on the customers advertisers are trying to reach.

However, there’s one small change: Google Ads will make it easier for smaller businesses to advertise through Google. An option called Smart Campaigns will let companies create an ad within minutes through a set form, and set a goal like getting phone calls, sending people to their website or bringing customers to their store.

Google Marketing Platform is aimed for larger advertisers and media buyers, and will combine advertising technology from DoubleClick, which Google acquired in 2007, and data management from Google Analytics 360 to help companies purchase and track the effectiveness of their ads.

Google Ad Manager is a product to help publishers manage spaces on their sites available for advertising, otherwise known as ad inventory. It subsumes DoubleClick for Publishers and DoubleClick Ad Exchange.

Smaller web sites will continue to use AdSense, which lets advertisers place small ads on their sites, and mobile app developers will continue to use AdMob, which lets them earn money from mobile ads in their apps.

To continue to thrive across all these platforms, Google will have to continue tracking user behaviour, especially as advertisers grow more demanding. As people grow increasingly wary of technology firms monitoring what they do online and more regulation comes into effect, Google will have to tread a line between helping marketers find customers and keeping personal data private.

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Dutch entrepreneurs optimistic about Chinese business climate

This week, BenCham presented the key findings of the Sino Benelux Business Survey at the Embassy of the Kingdom of the Netherlands in Beijing. Every year, BenCham investigate the business climate for Benelux businesses in China. “It is great to see that Benelux businesses are performing very well and are expecting to profit even further from the current business climate. Many are actually outperforming the local market,” said Mr. Bas Pulles, Deputy Head of Mission of the Netherlands Embassy in Beijing.

Favorable Business Climate

Dutch and Benelux businesses are optimistic about doing business in China. A majority experiences the business climate as favourable. 89% of Dutch companies realized equal or increased profits according to the survey. The success of Dutch companies may be due to their competitive position in the market, which according to businesses is thanks to their high product quality and good management. Expectations for the business results in 2018 are overall very positive.

Economic Slowdown

The Chinese economy has entered a new phase after its years of high-speed GDP growth. The aim of the government is to stimulate qualitative rather than quantitative growth by focusing on domestic consumption. So far, the effects of the Chinese economic slowdown on Benelux businesses appear limited. More than half of the businesses do not expect any impact.

“Even though we expected the economic slowdown to severely impact businesses, it seems we are already transforming towards ‘the new normal’ and the impact is limited. We believe this is mainly because many Benelux businesses are active in sectors which are booming because of economic trends such as urbanization, made in China 2025 or the rise of the middle classes,” said Mr. Roland Reiland, Deputy Head of Mission of the Luxembourg Embassy in Beijing.

Rising Salary & Regulatory Costs

Businesses experienced positive results, based on higher turnovers, better use of technology and increased efficiency. However there were also negative drivers. There is an increasing financial burden because of rising salary and regulatory costs, which makes that some businesses are considering leaving China. Also, the unlevelled playing field is making things increasingly difficult for Benelux businesses: many businesses feel local competitors receive preferential treatment. Moreover competition from other foreign owned (and Chinese) companies is growing. Also, more so than last year, businesses perceive the government regulations as restrictive.

“It is an interesting paradox really: many businesses are profiting in the current business climate but at the same time we see an increasing number of businesses contemplating to leave the Chinese market,” said Mr. Karel van Hecke, Deputy Head of Mission and Head of the Economic Department of the Belgium Embassy in Beijing. “A possible explanation may be that businesses who came here many years ago purely for cheap production are now struggling, but more recent entrants to the market are thriving,” mentioned Mr. Raoul Schweicher of Moore Stephens Advisory.

Belt & Road Initiative

For the first time the BenCham questionnaires and the Sino-Dutch survey were merged. When the 2016 edition of the Sino Benelux Business Survey was presented, little was known about the impact of the Belt and Road Initiative. Right now, more details on projects are available. However, only 16% of Dutch respondents has come across opportunities arising from BRI, and a vast majority 81% feels they don’t have enough information about BRI to profit from it.

“Let us not forget that many projects are currently being branded as a BRI-project. This makes it difficult for entrepreneurs to discover what BRI actually entails. For instance, we are already seeing some impact on for instance the logistics sector, with air routes being used much more frequently. This is due to BRI-projects, but not directly linked. It’s important that local authorities start defining BRI projects more clearly so that we can actually gain insight into the opportunities,” said Mr. Van Hecke.

Mr. Pulles added: “Because so many projects are branded as a BRI-project, businesses are very unsure of concrete opportunities. Right now, we notice most opportunities are within really specific projects for very specific parts or subprojects, for instance in the field of technology or ports. As embassies, we need to share more information on BRI and work on translating high-level BRI projects into such concrete opportunities.”