Technology

Seven out of ten artificial intelligence projects fail, according to study

A survey conducted by the Boston Consulting Group showed that the lack of culture inside the companies is one of the reasons

The Boston Consulting Group BCG is a global consulting firm, active in the field of business strategy. Photo: Shutterstock

“AI is quite different from engineering: it is not about making a plan and executing it, but rather learning from mistakes. It’s also a matter of culture: it’s not just a technology issue, it’s a whole business issue.” Sylvain Duranton, one of the consultants that took part in the study conducted by the Boston Consulting Group in partnership with the Massachusetts Institute of Technology, explained to the media outlet Estadão the reasons why seven out of ten artificial intelligence projects fail, according to what the survey found out. 

Although it became popular saying that a company that doesn’t invest in AI will become outdated, the study held in 97 countries, with more than 2.5 mil professionals from 19 different industries, showed that the answer is a bit more complex than that. “Executives have already realized that anyone who can’t find a way to use this technology at scale will be out of the game. For this, however, it is not enough just to develop solutions: culture is needed. When an AI project is reported to the company’s technology area, it is twice less likely to work than when under the command of the business area or the CEO,” the expert further explained. 

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A supporter of the idea that artificial intelligence must complement human work, instead of replacing it; Duranton raised a major concern that he called algocracy – a system in which the lack of humanity in bureaucracies is combined with the high speed of the digital world. “An algocracy is faster, but its effects causes more damage. In a scenario of bureaucracy, there is the human factor: despite the rules, people try to commit to what is right. Time also prevents major distortions from happening. On the other hand, an algorithm will make instant decisions – which can affect all social justice on the planet in a matter of seconds, for example.”

Regarding what are the countries that best performed when it comes to implementing AI, the survey showed that China and the US led the results, followed by the UK, Europe, and Japan – for what the expert explained as being less a matter of talent and more about culture. For him, in this sense, Europe and Brazil has a similarity that he calls an “engineering culture”. “A company that is successful with AI has a very fast innovation cycle and works with agile teams – something rare in European companies that aim for the perfection of engineering. Pragmatism is better than perfection in this case,” stated.