The Initial ‘Hype’ Has Passed: Artificial Intelligence in Companies is Taking Real Shape

The application of artificial intelligence is growing in almost all industries, with applications based on or powered by artificial intelligence emerging daily, and many entrepreneurs are seeking ways, opportunities, and ideas on how to use AI and create additional value in business. It is positive that artificial intelligence, after the initial ‘hype’, is now taking on the contours of realistic expectations, emphasized Lidija Karaga, CEO of Poslovna inteligencija, in her opening lecture during today’s Digital Croatia conference organized by the American Chamber of Commerce in Croatia (AmCham). As Karaga pointed out, artificial intelligence is not a magic box that will solve all the world’s problems, but realistic expectations are now being set before it. Therefore, she emphasized the importance of data governance (data governance), urging the gathered entrepreneurs to treat data as a company asset.

– Simply put, data should be treated the same way as any other asset a company has, for example, like any machine – you need to know where it is, who is responsible for it, maintain it, and it must be recorded. The same goes for data. If we say that they are the strategic assets of our company that will power various AI solutions, we must manage them systematically and comprehensively. Do not forget about data management because the output of artificial intelligence will be good exactly to the extent that the data you put into the models is good and as well as how well you manage that data, concluded Karaga.

Knowledge is the greatest power

The application of artificial intelligence, which raises productivity and competitiveness of companies, is crucial for the development of Croatia, as well as digital transformation, said Andrea Doko Jelušić, director of AmCham, during the conference. She added that artificial intelligence is currently in focus not only for the IT community but for the entire economy and that its application and introduction in companies currently means a lot. AI can, noted Doko Jelušić, bring a productivity growth of 17 to 30 percent in companies.

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Andrea Doko Jelušić

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The fact that we are in an extremely important technological moment due to artificial intelligence was also emphasized by Joško Mrndže, director of Google for the Adriatics region. As Mrndže compared, Sundar Pichai, CEO of Alphabet (Google’s parent company), believes that AI is on par with the discovery of fire or electricity.

– The ‘buzz’ around artificial intelligence was created by generative AI, models that can generate text, images, or video, like ChatGPT, but the fact is that AI has existed for many years and has been functioning in the ‘backend’ for a long time, said Mrndže.

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Joško Mrndže

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The development of artificial intelligence is a fantastic opportunity for those who will manage to achieve additional competitiveness with new technology, but there is also a logical concern that this acceleration will lead to job losses. Unfortunately, in part, it will, but one study for the USA states that out of 100 jobs, 60 did not exist before 1940. New technology will create new jobs, and therefore it is extremely important to invest in people’s skills, said Mrndže, who believes that knowledge, agility, and skills will be the greatest power in the future.

AI reduces the time for tedious, repetitive tasks and allows people to focus on what is important, where their creativity and experience are needed, said Vedran Bajer, director of Microsoft Croatia, concluding that there is no industry that AI will not touch.

– AI will not replace us; it will be everywhere, in all educational systems and industries, but we must be aware of that, said Bajer.

‘Brussels Effect’

Since we have entered an era of digital transformation shaped by artificial intelligence in both business and private, as well as political life, it is clear that there are also risks in all areas, especially democracy and elections, said Karlo Ressler, a member of the European Parliament, explaining the European goals of the recently adopted act on artificial intelligence.

The first goal was to try to create a ‘Brussels effect’, similar to GDPR, where European legislation, although it applies only to the EU, has had broader consequences because various companies operating in Europe decided to adopt standards for personal data protection, and now a similar attempt is being made in the field of artificial intelligence. After 10 years since GDPR was adopted, we see that there are problems and shortcomings that could not be understood at the time it was created. The same goes for the act on artificial intelligence. In its implementation, which will be important in the year ahead, as with GDPR, problems and questions will arise that should be addressed in cooperation with European and national AI centers. This is ahead of us, and it will be important not to create additional barriers to business and innovation, said Ressler.

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Andrea Doko Jelušić, Karlo Ressler, Andrea Čović Vidović, Joško Mrndže, Vedran Bajer

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The concept of the act on artificial intelligence, Ressler explained, starts from the gradation of different types of risks, from activities that are completely prohibited (e.g., social scoring systems and subliminal manipulation), transparency that someone is in contact with AI, to activities that are allowed but for which different levels of compliance are set for companies developing those products (e.g., using AI in medicine, transportation, etc.).

– It is crucial to emphasize that the concept of risk gradation is something that has come from the private sector because sectoral bans and restrictions were to be avoided, which would not be good, and in this way, an attempt was made to make the system more stable, added Ressler.

The adoption of the AI act is an unprecedented event because no one in the world has tried to protect citizens in this way as the EU has, said Andrea Čović Vidović, deputy head of the Representation and head of media at the European Commission Representation in Croatia.

– We are interested in human rights and the protection of democracy, which sounds very abstract, but in practice, it is important when it is violated, added Čović Vidović.

When asked how the AI act will affect the competitiveness of EU companies, Čović Vidović replied that the goal is not for regulation to kill creativity and innovation, but the idea is to help startups, small and medium-sized enterprises, and all states must ensure a safe environment for innovation before they go to market.

Much work remains to achieve EU goals

Regarding Croatia’s progress in the European digital decade, which was also discussed during the panel discussion at the conference, there are no significant updates compared to last year’s results when Croatia ranked 21st out of 27 EU member states according to the DESI index. The report for this year, which will no longer rank countries due to a change in methodology but will look at how each member state contributes to the EU’s digital decade, has not yet been published.

Although a lot has been done in the field of digitization in Croatia, we cannot be satisfied with the final results because Croatia can do better, emphasized Bernard Gršić, state secretary in the Central State Office for the Development of the Digital Society.

– Of all 12 goals set by the EU, I would highlight the one that is strategically most interesting to us, which is that the ICT sector contributes 13 percent to Croatia’s GDP by 2030. However, this will certainly not happen without people, ICT professionals, whose number we need to double, which is not at all simple. Formal education is not enough; we can achieve this goal through lifelong learning and retraining. Digital transformation brings new jobs; some will be less needed or will not exist, and it is up to us to accept this process and adapt, said Gršić.

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Tajana Hašperger, Renata Vujasinović, Mislav Galler, Gordan Vidić, Bernard Gršić

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In achieving the goals of the digital decade, the growth of digital payments, which is directly correlated with GDP, can help, said Renata Vujasinović, manager of Visa in Croatia.

– If digital payments in Croatia were to grow by five percent for five consecutive years, it would impact GDP growth by 440 million euros, said Vujasinović.

It is also necessary to raise awareness among people about the benefits of e-invoices, such as security and reducing the CO2 footprint, as people are still accustomed to paper invoices and are afraid to step out of their comfort zone, noted Mislav Galler, a member of the Management Board of Telemach.

Croatia is below the EU average in electronic information exchange, and this trend can be improved by investing in digital infrastructure, increasing digital literacy, and fostering a conducive environment for digital transformation, explained Gordan Vidić, commercial director for Croatia at Iron Mountain.

In conclusion, for the development of companies, technologies such as cloud, artificial intelligence, and digital twins are the most important, added Tajana Hašperger, director of Hewlett Packard Enterprise managed by Selectium.