Created 01.02.2022 at 13:37
Updated 11.04.2022 at 14:23
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A study carried out at the LUT School of Business and Management shows that training and engaging people play a decisive part when a company aims to increase or develop its use of artificial intelligence.

"Many industrial enterprises have a long history. It is difficult to change all of the practices or legislation that have come about over the course of decades, but what we can influence is people's behavior. Education lowers the threshold for experimentation and increases understanding of the topic area," explains Post-Doctoral Researcher Päivi Aaltonen.

The LUT School of Business and Management conducted a qualitative study on seven industrial enterprises that have their headquarters in Finland and utilize artificial intelligence (AI). The study suggests that enterprises can harness the full potential of AI if they apply two types of learning throughout the organization.

"We talk about exploitative learning, meaning the improvement of existing businesses with the help of AI, and about explorative learning, which refers to the use of AI in novel ways and in new types of processes and use cases," Professor Paavo Ritala outlines.

Industrial companies that successfully use AI have three things in common: the desire to renew their business, patience in developing their business, and the ability to accept failures.

LUT-kauppakorkeakoulun professori Paavo Ritala
Finland is gaining momentum, and our situation is good compared to other European industry.
Paavo Ritala
Professor

What should a business do?

  • Establish centralized AI teams that support and train employees throughout the organization. The training can simplify, model, give examples of, visualize and demystify artificial intelligence.
  • Take advantage of different partnerships to obtain and increase AI capabilities.
  • Build funding mechanisms that enable rapid AI experiments in the organization.
  • Communicate about the different stages of the process and its advantages regularly.
  • Encourage the development and promotion of ideas that apply AI.
  • Continuously assess the progress of the process and celebrate successes together

Finland is "gaining momentum"

In Finland, the number of businesses that utilize artificial intelligence has more than tripled in three years, relates the report State of AI in Finland (2020). Nearly 800 business enterprises are developing AI, and roughly 300 announce that their turnover primarily comes from AI development. In addition, tens of growth companies are founded annually around AI.

Ritala says the Finnish manufacturing industry has long traditions in the utilization of technology.

"We have employed concepts such as digital twins for remote monitoring and process quality assurance, and also in product development. Many present-day industrial solutions would not be feasible without digital technology. In the future, artificial intelligence will play its own role in this," Ritala explains.

The companies involved in the study by the LUT School of Business and Management develop different AI solutions and are pioneers in that sense.

"In the big picture, the utilization of AI started to gain ground only during the past decade. Finland is gaining momentum, and our situation is good compared to other European industry, as we have taken steps to prepare for this earlier on."

The State of AI in Finland report relates that the growth of AI solutions in Finland is hindered by a lack of expertise and data. According to Aaltonen, employees' resistance to artificial intelligence can be reduced by a better and pragmatic introduction to the topic.

"AI is like an undefined lump in the media, and the word may even be used to scare people. Resistance to AI may stem from the simple fact that people don't understand the concept," Aaltonen analyzes.

Mika Ruokonen LUT-kauppakorkeakoulun teollisuusprofessori
We don't need to be afraid of AI. It's ultimately a question of taking advantage of statistics and mathematics to solve problems.
Mika Ruokonen
Industry Professor

Proliferation of AI in industry

In the manufacturing industry, equipment purchases and energy and human resource expenses are large items of expenditure. With AI, these expenses can be optimized better.

"In industry, even small changes may have a huge impact. If AI helps to increase process efficiency even by one percent, for many large enterprises it would mean millions of euros in savings. Also the environment profits from AI solutions," says Industry Professor Mika Ruokonen of the LUT School of Business and Management.

Aaltonen adds that profit margins are narrow in industrial manufacturing, but new services can be used to create new revenue models.

"These services include software that measures efficiency and user control to minimize the need for service and maintenance," she says.

AI-based services enable making manual work more meaningful and productive and increasing its added value.

"The aim is to automate heavy and dirty routine work and focus human labor on issues such as problem-solving, which is best done by humans," Ruokonen states.

According to the Taiwanese technology director and author Kai-Fu Lee, robots and AI will take over the manufacturing, delivery, design and marketing in most fields in the coming decades.

Ritala considers this vision very interesting but adds that there are uncertainties related to these developments.

 "It will take a long time before AI achieves concrete gains in all industry sectors. Some industries are much further along than others. However, the development trend is unmistakable," he says.

Ruokonen goes on to say that the development of AI is a continuum – a never-ending evolution. First there was talk about a digital transformation, now an AI transformation.

"Artificial intelligence helps us to learn about data. We don't need to be afraid of it. It's ultimately a question of taking advantage of statistics and mathematics to solve problems."

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