How is Artificial Intelligence (AI) reshaping industrial development?

 

The emergence of AI-related technologies warrants analysis from multiple perspectives. One of the most significant impacts is in automation, where AI is facilitating the development of intelligent systems capable of performing complex tasks with minimal human intervention. While this advancement offers numerous benefits, it has also raised concerns about potential job displacement, particularly in industries that rely heavily on routine manual labour. However, while automation may reduce the demand for certain types of jobs, it also creates new opportunities in emerging sectors that require advanced technical skills. Recent studies on AI-related automation find that the net impact on global employment is generally positive. This is because the productivity gains associated with AI often lead to the emergence of new industries and job opportunities. Despite its growing prominence, AI has not yet made significant inroads on industries globally. Consequently, we must rely on forecasts to gauge AI potential impact on the industrial sector and the effects that come with it. In terms of employment, studies predict that while AI will displace certain jobs, it will also create new ones; the net effect on employment is likely to vary across sectors, with some industries experiencing localized disruptions and job losses. This emphasizes the need for proactive planning and policies to prepare workers for an AI-driven future. While AI holds great promise, developing countries encounter several challenges in its adoption. These challenges include limited access to capital, a shortage of trained maintenance staff and unreliable energy infrastructure. Furthermore, many firms in low-income countries have yet to transition to digital production methods, relying instead on analogue techniques. This reliance poses a significant barrier to AI adoption, as these technologies are built on the foundation of digital systems. The 4IR is further blurring the boundaries ofthe industrial sector. 

Technological advancements and new divisions of labour have led to a deeper integration between manufacturing and other sectors, particularly knowledge-intensive business services such as information technology (IT) R&D, market analysis and digital platform development. This phenomenon, often referred to as the "servicification" of manufacturing, means that many value-added processes now extend across various sectors of the economy, requiring digitalization-related solutions and services. Industrial R&D, logistics, product design, product management and other intangible services are becoming integral components of production, erasing the lines between manufacturing and services. In today’s Global Value Chains, for instance, products such as smartphones involve contributions from numerous industries, including semi-conductors, software development and industrial design. 

This 21st century phenomenon calls for a shift in industrial policy from focusing on specific sectors to embracing broader production ecosystems and ‘industrial commons’ that involve manufacturing, services and agricultural processes.

Highlighting the Impact of AI on Industrial Automation,

AI-powered industrial automation solutions help manufacturers to improve process control, quality control, and safety.