Global Recession: How AI can help businesses emerge stronger in 2023

This year, the global economy has experienced a rapid deterioration of growth prospects, coupled with rising inflation and tightening financing conditions. It's hard to predict how long the slowdown in economic indicators such as GDP, corporate profits and employment will last. However, by making a few intelligent investments today, businesses can emerge from any oncoming recession with resilience and better productivity.

During Covid-19, digital transformation helped companies survive the challenges that came their way. That should continue, but digital transformation needs to go many steps further than simply taking processes online.

Artificial intelligence can help companies unlock a whole new level of recession-proof growth.

Impact on the Indian economy

With major economies experiencing slowing economic growth and rising inflation, India's resilient domestic demand and rapid infrastructure development are shielding the country from recessionary pressures. However, there is a possibility that India won't be able to avoid the effects of the global economic downturn totally. According to Moody's analytics report titled "APAC Outlook: A Coming Downshift," India will witness slower growth in 2023. Economist Nouriel Roubini, who correctly predicted the 2008 recession, has stated that India will be affected by the global recession throughout 2023.

How AI Can Help

Post-pandemic, companies have had to become predictive and dynamic in their decision-making to achieve operational resilience. In their zeal to become flexible, businesses started to conserve cash, slowing their growth plans and preparing for survival, given that the future could be challenging.

In such scenarios, AI can make a meaningful impact by reducing hidden costs, improving productivity, and finding new revenue streams. Let's understand the two key aspects of AI that can support corporate growth during the current economic downturn.

Automate workflows and processes

The first effect of slowing down hiring and freezing headcount to limit costs is operational pain.

However, when too few employees are assigned too many tasks, morale and productivity suffer. AI-enabled automation allows businesses to streamline processes across all functions. AI-enabled automation can improve operations in a variety of ways. For example, It can be used to optimize scheduling and resource allocation, process and analyze large amounts of data, and automate customer service tasks such as answering frequently asked questions.

By automating repetitive tasks, businesses can free up their human resources to focus on more value-added activities and potentially increase efficiency. Automation can also help companies save time and money by reducing the need for manual labour and reducing the risk of errors.

Increase revenue efficiency

AI will eventually be recognized as an essential technology for any industry to stay competitive, even during an economic downturn. According to Accenture, AI can potentially increase profitability rates by an average of 38% by 2035 and generate an additional US$14 trillion in economic growth across 16 industries and 12 economies.

Businesses may experience decreased revenue and profitability due to reduced demand for their products or services during a recession. Artificial intelligence (AI) can potentially help increase revenue efficiency by automating certain tasks and processes in an organization. It has the ability to comb through multiple data points from customers, the company, and competitors to provide valuable insight into patterns and vulnerabilities within a customer base, identifying customers who are likely to leave, and improving overall customer retention. For example, the tech giant, Amazon uses artificial intelligence to drive dynamic pricing – reducing prices to elicit more sales when needed, and increasing prices when demand is high.

Algorithms can also reveal patterns in buyer behaviour, sales performance, and external conditions, which increase sales revenue while eliminating uncertainty in the sales process. This assists the sales leader in determining which tactics work best at each touchpoint.

AI to help thrive, not just survive

AI can help a business navigate nearly any market environment by increasing productivity, accuracy, and growth at a lower cost while reducing customer churn and improving expense management.

Investing in new technology during a downturn may seem daunting, but the medium to long-term benefits far outweigh one-time costs.

Authored By: Mandar Mungee, Chief Revenue Officer, Grene Robotics