Chile's Ai Future: Reversing Decades of Economic Decline
In Chile, traditional drivers for production, such as capital and labor, provide no warrant for long-term sustainable economic growth.
According to Accenture’s report, gross domestic product (GDP) growth has been slowing over recent decades.1 Indicators of capital efficiency are trending sharply downward, while labor-force growth is also diminishing in the region.
Fortunately, the solution is on the horizon.
AI is Chile’s opportunity to leapfrog to more significant innovation, productivity, and economic progress. Chile has already taken AI seriously.
Mining companies are using autonomous machines in copper mines, job recruiters draw on “emotion analytics” algorithms to select the potential candidates, and customers are getting used to seeking solutions from chatbots.
With AI as the new factor of production, it can drive growth in two important ways.
First, AI serves as a new virtual workforce that can handle complex physical tasks much better than humans, especially in the mining industry. AI can help identify ore bodies, separate ores, and mitigate risks.
Tomra has developed mineral and ore sorting equipment, using sensors to separate valuable ores from the waste rock with fast-paced laser sorting and product identification.2
Second, while traditional automation technology is task-specific, the unique feature of AI-powered intelligent automation is its ability to be adopted widely across industries and job titles.
Chatbots are good examples. Machine-learning algorithms are trained to simulate the real world or predict the future.
The third and most powerful feature of intelligent automation is self-learning, enabled by repeatability at a large scale.
Chilean company NotCo developed an algorithm that analyzes animal protein-based food products and generates recipes for vegan alternatives that not only have the same taste and texture but also offer better nutrition.
The larger its database grows, the more the “chef” algorithm learns—and the more combinations it can produce. Self-learning provides tremendous potential as it can continually improve itself.3
Labor and capital augmentation
AI can enable labor and capital to be utilized more efficiently.
At Escondida Copper Mine in Chile, BHP company uses Smart Cap technology to analyze the brain waves of the drivers to determine their physical state, Improving production efficiency and drives’ safety.4
The Chilean company AIRA has developed a system to conduct the pre-interview process, preventing the recruiters from dealing with those cumbersome processes. The more recruiters can focus on the essential interviews, the more value can be added. Algorithms are designed and trained to create value by optimizing operations such as data-driven decision making.
AI’s potential impact on the economy
The good news is that AI is already becoming a reality for many sectors across the region, especially for the economy.
According to Accenture’s model, AI would generate $63 billion to Chile’s gross value added(GVA) in 2035. Intelligent automation, augmentation, and innovation diffusion channels would contribute $21 billion, $30 billion, and $12 billion, respectively.
The main reason is that Chile has the strength in commodity-based industries. For example, the mining industry could absorb the benefit of AI quickly and generate profit through cost reduction directly.
However, while Chile has comprehended the value of AI on the application level, its innovation incentive needs to be strengthened.
Strengthen AI Research and Education
According to the Report of Artificial Intelligence Development 2019 published by Tsinghua University, the shallow talent pool would be a crucial concern for not only Chile but also the South America region. 5
The following figure shows the distribution of global scholars in the field of machine learning. The map is drawn according to the geographic location of the scholar ’s current institution, where the darker the color, the more concentrated the scholars. As can be seen from the map, the number of talents in the United States is far ahead and mainly distributed on the east and west coasts; there are also talents in central and western Europe; talents in Asia are primarily distributed in eastern China, Japan, and South Korea; others such as Africa and South America Scholars are very scarce. The situations remain the same for other significant fields within AI, such as computer vision and knowledge engineering. Data shows that improving research and education quality will be crucial, as well as deepening collaboration among South American countries.
Source: Report of Artificial Intelligence Development 2019, Tsinghua University
Encouraging AI-related policy and regulation
Ten experts will work together to create a National Artificial Intelligence (AI) Policy in Chile. The Ministry of Science, Technology, Knowledge, and Innovation chose the members of the committee to contribute their experience in technology, ethical considerations, the public policy of data uses, and economic development related to technology.6
As autonomous machines take over tasks that have exclusively been undertaken by humans, current laws and regulations will need to be revisited. The most exciting part is that AI itself can be adopted in the supervision and regulation technology, contributing to the cost-saving and efficiency improvements.
AI offers a solution for Chile to add more value on a more sustainable basis, and the appetite from business, government, and individuals appears no less in Chile than in the most technologically advanced parts of the world.
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Written by Sheng Zhao
Edited by Jack Argiro, Jason Kauppila, Michael Ding & Alexander Fleiss
1 Accenture, “How Artificial Intelligence can drive South America’s growth”, 2019
2 Gustmann, N. (n.d.). Large new Tomra X-Ray sorter a game changer for mineral processing. Retrieved from https://im-mining.com/advertiser_profile/tomra/
3 Baram, M. (2019, March 8). How vegan mayonnaise convinced Jeff Bezos to make his first investment in South America. Retrieved from https://www.fastcompany.com/90316486/how-vegan-mayonnaise-convinced-jeff-bezos-to-make-his-first-investment-in-south-america
4 Chapman, S. (2017, November 3). BHP Billiton using caps to monitor drivers' brainwaves. Retrieved from https://www.miningglobal.com/technology/bhp-billiton-using-caps-monitor-drivers-brainwaves
5 Tsinghua University, Report of Artificial Intelligence Development, 2019
6 Pérez-Tejada, P. (2019, September 11). Meet the experts who will elaborate Chile's national policy in AI. Retrieved from http://www.latinamerica.tech/2019/09/12/meet-the-experts-who-will-elaborate-chiles-national-policy-in-ai/