Pervasive Intelligence

Advances in artificial intelligence (AI) are giving rise to a multitude of smart devices that can recognize and react to sights, sounds, and other patterns—and do not need a persistent connection to the cloud. These devices could well unlock greater efficiency and effectiveness at organizations that adopt them. In some industries, they may even change how profits are apportioned.

From connected to pervasive

The age of pervasive intelligence will be marked by a proliferation of AI-powered smart devices and machines that will learn from experiences, adapt to changing situations, and predict outcomes. Some will infer user needs and even collaborate with other devices. Moreover, with AI embedded rather than confined to the cloud, these smart devices will not depend on internet connectivity, and will not suffer from latency entailed in transmitting data to the cloud for analysis. This will enable applications that require instantaneous response and robust performance even when connectivity is poor or not available.

Taking root across industries

A wide range of industries are set to benefit from these smart devices. Below are some examples that provide a glimpse of how pervasive intelligence may affect company operations—and, in some cases, industry dynamics.^[1]

Manufacturing. Robots are increasingly being equipped with sensors and AI, dramatically boosting their utility.^[2] Manufacturers could also benefit from leveraging onsite intelligence for other equipment to reduce chemical leakages and costly downtime.^[3]
Health care. Smart medical devices could change how health care is delivered, cut associated costs, and enhance patient well-being. Trials, for instance, have indicated that AI-powered implants for epilepsy significantly reduce frequency of seizures.^[4]
Construction. Real-time monitoring of progress at construction sites with drones and smart cameras could prevent project delays and cut material waste.^[5]
Logistics and distribution. Intelligent robots are cutting costs and increasing speed and efficiency in the logistics domain. For instance, a system of warehouse robots can collaborate to jointly tackle online order fulfillment, significantly slashing pick-up times.^[6]
Transportation. Autonomous vehicles are expected eventually to reshape the transportation sector by offering a cheaper alternative to traditional car ownership.^[7]
Energy. Networked wind turbines equipped with sensors and tapping algorithms can share information about changing wind conditions and make real-time adjustments, allowing the generation of maximum power with minimum wear and tear.^[8]

Strategic implications

Smart devices can help companies achieve new levels of efficiency and effectiveness by automating processes, cutting waste, reducing cost, and increasing output. But their impact goes beyond just that:

Expanding markets

By cutting costs and increasing efficiency, smart machines may well help expand certain markets. For instance, the adoption of the aforementioned warehouse picking robots could potentially expand the market for online grocery shopping.

Threatening incumbents

Product companies of all kinds may face competition from new entrants offering smart alternatives. Makers of traditional surveillance cameras or herbicide spraying equipment, for instance, could see demand for their products shift toward smarter alternatives; they—and those operating on other industries—should thus consider adding smart options to their product lineup.

Shifting revenues

Smart devices could shift how revenue and profits are shared. Many, for example, expect autonomous ride-hailing services to drive down vehicle ownership, thus shifting revenues from carmakers to autonomous fleet operators.^[9]

Implications

The era of pervasive intelligence will present professionals working in a variety of roles with opportunities as well as challenges.

Operating professionals may need to consider how to select, integrate, and employ smart products to gain greater organizational efficiency.
Product marketers may need to plan new products with embedded AI. Smartphone manufacturers have already begun enhancing their products with embedded AI capabilities.^[10]
Strategists will need to consider how pervasive intelligence can create opportunities for new revenue sources and business models.
Risk leaders will need to work with product marketers to analyze, manage, and monitor the potential risks associated with the proposed products, especially those deployed in sensitive settings.

The coming era of pervasive intelligence

There is still time before pervasive intelligence has a significant impact on most industries. Smart devices are sure to become ubiquitous in commercial setting and consumers’ lives, enabling entirely new levels of performance and efficiency. Companies should start to map out the potential impact of pervasive intelligence on their businesses and position themselves to reap the benefits.

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Endnotes

^[1] The industries are listed in descending size order according to estimates from the US Bureau of Economic Analysis. See Bureau of Economic Analysis, “Industry data,” accessed October 28, 2018.

^[2] For a view of how advances in robotics are changing multiple industries, see David Schatsky and Amanpreet Arora, Robots uncaged, Deloitte University Press, October 18, 2017.

^[3] Reality AI, “Industrial equipment and manufacturing,” accessed October 28, 2018.

^[4] NeuroPace, “NeuroPace closes $74 million equity funding to accelerate patient access to the world’s first brain-responsive neurostimulation system to treat epilepsy,” October 24, 2017.

^[5] Clay Dillow, “The construction industry is in love with drones,” Fortune, September 13, 2016.

^[6] Max Smolaks, “Robots and software: How Ocado is creating new business models,” Data Center Dynamics, August 29, 2018; Ocado, “ How online grocer Ocado is automating warehouses using swarms of robots,” Harvard Business Review, May 22, 2018.

^[7] Scott Corwin et al., The future of mobility, Deloitte University Press, September 24, 2015.

^[8] Katie Fehrenbacher, “Why wind turbines should talk to each other,” Greentech Media, February 17, 2017.

^[9] Craig A. Giffi et al., “The race to autonomous driving,” Deloitte Review 20, January 23, 2017.

^[10] Taylor Hatmaker, “Google ups the Pixel 3’s camera game with Top Shot, group selfies and more,” TechCrunch, October 9, 2018.