Authors: Zelin Zhuo, Frank Okai Larbi and Eric Osei Addo
Affiliated organization: Center for Southeast Asian Culture and Education Studies, School of Education, South China Normal University, Guangzhou, P.R. China) ; Institute of International and Comparative Education, Research Center for Hong Kong and Macao Youth Education, South China Normal University, Guangzhou, China) ; School of International Trade and Economics, University of International Business and Economics, Beijing, China
Type of publication: Article – Research paper
Date of publication: December 2020
In recent years, artificial intelligence (A.I.) has drawn attention as a key for economic growth in developed countries. Indeed, Sutton and Trefler (2016) describe both theoretically and empirically how developing countries such as China initially entered new markets at a low level of quality but over time developed the capabilities to deliver high quality, and internationally competitive goods and services via A.I. technology. This is mainly due to the attention been focused on developing new A.I. information communication technology. The use of A.I. technologies offer many benefits (Canbek and Mutlu, 2016) and risks (Alzahrani, 2019). It brings the appearance of normal human language use into a new social relation between machines and humans (Barrett et al., 2019; Sanzogni, 2017). This innovative media presents a powerful technology that uses analytics to determine news feeds, information, products and purchases (Cunnean et al., 2019). Notably, it is a fundamental, pervasive economic and organizational phenomenon that holds many opportunities in store for management (Foss, 2005). Again, A.I. unlike the natural intelligence displayed by humans is transforming the face of commerce in the business world and how it creates products and services to customers (Armbrust et al., 2011).
Considering the importance of A.I. in today’s commerce, this paper explores the benefits and risks of introducing such a mechanism into trade. Furthermore, this study reviews the process of A.I. in commerce together with the processes of conducting businesses for profit or not for profit goods, commodities, property or services in the field of commerce. Therefore, the objective of this study is to address the following research questions: firstly, does the introduction of A.I improves commerce performance at both the organizational and process level and secondly, what is the business value of A.I based projects within organizations. The authors draw seven key hypothesis:
- H1: Usefulness of A.I positively affects the customer’s purchase decisions.
- H2: Trust of A.I negatively affects the consumer’s risk of a transaction.
- H3: Data management in A.I will more likely affects the adoption of its usage.
- H4: Experts knowhow in A.I will more likely affects the adoption of its usage.
- H5: Cost incur will more likely affects the firm’s adoption of its usage.
- H6: A.I privacy protection positively affects the consumer’s intention to purchase on the internet.
- H7: Overall value of A.I positively affects the introduction of such technological tool.
Success factors impacting artificial intelligence into trade/commerce
The introduction of A.I. has immense contribution to the development of the business/commerce industry in the area of product customization, market trend analysis, target marketing, customer relationship management, web personalization among others. Below are some key benefits of introducing artificial intelligence into trade/commerce. Firstly, artificial intelligence enhance creative tasks by freeing users from routine and repetitive tasks and allows them to spend more time on creative functions. In doing so, allows robots to develop repetitive, routine and process optimization tasks automatically and without human intervention.
Secondly, A.I reduces failures caused by human limitations. In some production lines, A.I is used to detect, by means of infrared sensors, small cracks or defects in parts that are undetectable by the human eye. Thirdly, A.I control and optimize of productive processes and production lines more efficiently via error-free processes and obtain greater control over production lines in the company. This not only increases productivity at the machine level, it also makes workers more productive and increases the quality of the work they do because having more information allows workers to have a more focused view of their work and make better decisions.
The introduction of A.I. has immense contribution to the development of the business/commerce industry in the area of product customization, market trend analysis, target marketing, customer relationship management, web personalization among others
Barriers of introducing artificial intelligence into trade/commerce
With regard to the limitations of introducing A.I into commerce, below are some of the most common factors that can occur in the business environment. The first risk is the cost and installation time of A.I projects. The cost of installation both at the time and the economic level, is a very important factor in choosing to execute this type of project. Companies that lack internal skills or are not familiar with AI systems, must value the outsourcing of both implementation and maintenance in order to obtain successful results in their project. Another obstacle that often occurs at the business level for introducing A.I is the lack of qualified professionals to manage / operate the technology. Thirdly, artificial intelligence cannot be improved with experience because they perform the same function again if no different command is given to them. Again, it stores a lot of data but the way it can be accessed and used is very different from human intelligence. This means that A.I technology cannot cope up with the dynamic environment and so they are unable to alter their responses to changing environments.
Effects of COVID-19 pandemic on implementing artificial intelligence
Currently, the impact of COVID-19 situation has resulted in the growing use of artificial intelligence in trade / commerce. Significantly, the effect of A.I stands to promote reliable and practical implementation of digital marketing across businesses. Moreover, the applications of Artificial Intelligence has the potential to solve challenges in the distribution of goods during unforeseeable events like COVID-19 pandemic among others.
Companies that lack internal skills or are not familiar with AI systems, must value the outsourcing of both implementation and maintenance in order to obtain successful results in their project
In order to perform our empirical analyses, the study uses questionnaire survey conducted in four West-African countries, namely: Ghana, Nigeria, Togo and Burkina Faso. The selected countries were chosen because of the large number of manufacturing and production companies located in these countries. Furthermore, the responded data for this study were collected via an online platform. A total of 3,000 questionnaires were administered online and afterwards, the study analyzed completed data of 2,903 from manufacturing companies (after accounting for missing data). Nevertheless, the study examines perceived value as the comparison between benefit and cost (sacrifice) which compares (1) usefulness, trust and data management (2) experts, cost and privacy and (3)
Analysis and discussion of results
It is explained that male manufacturers occupies 55.39%, which means that men are in control of such an industry and key decision makers of such digital technological usage into commerce than women with a score of 44.61%. Again, the study recorded 47.61% of industry players who are over 41-50 years of age. . Furthermore, 54.15% of the respondents attained a bachelor’s degree and this juxtapose the technological skills they possesses in using artificial intelligence tool in their line of operations. Likewise, the working period which influence their capabilities in digital platform. From the table, 36.31 % of the respondents have been in the industry for over 21 years and this immensely had contributed to the success story of introducing artificial intelligence into trade/commerce. Lastly, top three sub-sector manufacturers that contributed hugely to the study were the aluminium sector (20.01%), followed by textiles (15.77%) and then automotive (13.88%). Clearly, this shows the adoption rate of manufacturers in promoting the use of artificial intelligence in their business transactions.
Currently, the impact of COVID-19 situation has resulted in the growing use of artificial intelligence in trade / commerce
On average, A.I has enhanced the way industry players effectively complete the task and product delivery at a weighted mean of 80.97 percent. This means that A.I has help improve efficiencies and augment our human capabilities with new products and processes in the manufacturing industry. Additionally, the use of A.I has facilitated good decision making process and also, build confidence in business transaction as a weighted average growth rate of 84 percent (approximately). Likewise, data management in artificial intelligence technology which saw a rate of 82 percent with its ability to stores lots of data in a structured electronic format. Moreover, the acquisition, installation and maintenance cost (fees) of the technological device together with its expertise support contributed equally to its usage with a weighted average of 78 percent and 80 percent respectively. On the basis of such device privacy protection scored an average figure of 73 percent approximately. Overall, the beneficial value of such technological device recorded a weighted average mark of 88 percent while respondents’ reasons for adopting such artificial intelligence technology in their business operations had a 90 percent acceptance rate. In sum, this portray that A.I is an integral part of our business system because it allows companies to design, produce and deliver products and service better than ever before.
On average, A.I has enhanced the way industry players effectively complete the task and product delivery at a weighted mean of 80.97 percent
On the basis of analyzing the benefit of introducing A.I into commerce, for instance; A.I improves task performance across Ghana, Nigeria, Togo, and Burkina Faso as significantly related to the usage of such technological tool. Hence, the acceptance of the proposed framework and H1. Likewise cost (fee) and privacy protection that recorded a similar digits of introducing artificial intelligence into commerce. Empirically, this supports H2, H3, H4 and H5 framework constructed. Finally, the value of A.I positively affects the adoption of such technological tool via its ability to deliver good results in business transactions at respective rate of Ghana, Nigeria, Togo and Burkina Faso. Clearly, the result estimates shows that artificial intelligence is helping companies of all sizes and in all industries improve productivity and the bottom line at every stage of the business lifecycle from sourcing material to sales and accounting to customer service. With A.I, the study justifies that technology has become even more entangled into our daily existence, workplaces and society in which we operates.
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