Artificial Intelligence: Burgeoning Applications in Industry

Published - Jun 2003| Analyst - John Gosney| Code - IFT041A
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Report Highlights

  • The total worldwide AI market was estimated at $11.9 billion in 2002.
  • Its expected average annual growth rate (AAGR) will be 12.2% through 2007.
  • Expert systems will see strong growth reaching $4.8 billion in sales in 2007.
  • Belief networks will see $2.2 billion in sales, and an AAGR of 13.1%.
  • AI-enhanced applications will be the strongest in growth.



BCC's goal in conducting this study was to determine the applicability of applying artificial intelligence (AI) - based technology to a cross-section of industry ranging from education to manufacturing. The ways in which AI is defined varies greatly in both technology and application. Of particular interest in the research, and thus a primary focus of this report, is to clearly define AI in regard to practical application, and to differentiate AI from more conventional technologies.

Our key objective was to present a succinct, defined analysis of AI-specific technologies and their associated industry and commerce applications, as well as to define the AI-specific technology/methodology being used in said applications.


Artificial Intelligence is, at best, a highly ambiguous term. At worst it is a futuristic, "science-fiction"-influenced topic of little or no real-world applicability. Despite a general decline in the venture capital and general investment in AI-centric companies and research organizations in the mid to late 1990s, there remains viable AI technology that is being implemented today across a wide range of industry and commerce. However, there is a tremendous amount of confusion resulting from the general term "AI" as well as the associated technologies and methodologies that surround it (e.g. agents, neural networks, etc.).

The reasons for performing this study were threefold: first, to clearly identify and explain these associated technologies/methodologies; second, to differentiate these technologies from existing, more conventional technologies; and third, to show how these technologies are being implemented across a range of industry and commerce.


This study has a primary focus of definition and differentiation: what are the specific technologies and terminology that comprise AI, and how are these technologies unique (i.e. differentiated) from existing, more conventional technologies?

That said, then, this report wants to separate the science fiction, or otherwise "futuristic," view of AI from how it is being practically implemented today in industry and commerce. To do this, we present a clearly defined overview of the field of AI, including its historical origins and related topics. We then focus on several AI-specific technologies, again clearly defining them as their own unique entities. Next, we focus on how these AI-specific technologies are being implemented across various areas of industry and commerce, all the while keeping a focus of differentiating these technologies from more conventional technologies that have been in place for an extended period of time. Throughout the report, we offer projected development of these technologies both in relation to the field of AI in and of itself, as well as how these technologies will influence, be utilized in or be driven by specific industry and commerce applications. Projections are given for the years 2002 to 2007.

This study will be of interest to a wide variety of readers, including those involved in finance, automated manufacturing, transportation and guidance systems, defense and domestic security, medical and healthcare/biotechnology, entertainment and education. It will also be of interest to those seeking a clear definition and understanding of what constitutes AI, including the historical development of the field, and associated research and technological development and deployment.


The scope of the study encompasses several major markets where AI-related applications are being utilized, based on clearly defined AI-related technologies. For each technology (and associated market application) BCC provides an analysis of the current status, its association with other technologies and a forecast of potential growth and development over the next five years. Note that this association with other market applications is especially critical in a complete understanding of how AI is being practically implemented today. Many AI technologies cross into more conventional technological markets, so that rather than being a unique entity in and of themselves, they help to further the viability/functionality/performance of an existing technology or application.

The analysis provided in this report focuses on both American and worldwide applicability and implementation of AI-related technologies. Again, a clear definition of the AI field in specific relation to practical industrial and commercial applications is the main focus as we seek to remove (for this report) the philosophical, ontological or otherwise metaphysical issues and aspects related to this topic (i.e. the science-fiction component). While these issues are potentially important in understanding the overall history and direction of AI, the focus of this report will remain on "real world" applicability and implementation.


Since AI is not, in and of itself, a clearly defined industry or technology but rather draws on several related technologies/industries, a key focus of this report is, again, to clearly define specific AI technologies and associated methodologies, and to then analyze how these technologies/methodologies are being practically implemented in various industrial and commercial applications.

For this analysis, BCC first focuses on specific, currently in-use applications that utilize/are enhanced/are facilitated by AI-related technologies/methodologies. For each of these applications, a discussion of the current and projected market sales is provided, along with a discussion of relevant implementation hurdles/regulatory issues/etc.

The second component of the analysis, then, is to focus on specific industrial and commercial markets by specific AI-technology (e.g. neural networks, decision systems, etc.). For each market application, the benefits and challenges to utilizing AI-enhanced applications (i.e. those discussed in the first section of the report) are discussed, along with specific AI technology percentage implementation for each of the markets, across the applications discussed in the first part of the report.

For each section of the analysis (i.e. Market by AI Technology and Market by Application Type), the potential future application (2002-2007) of AI technology is provided, along with a detailed assessment of the current application as it specifically relates to AI technology and methodology.


Extensive historical and industry-related research was performed to help clearly differentiate AI-specific technology from otherwise conventional applications, and to show how the two compliment or enhance each other in terms of performance, applicability and industrial/commercial viability. Finally, several specific areas of industry and commerce were examined to determine the current level of AI-related applications being utilized, and to project the future involvement of applying this technology and its associated benefits/challenges.

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