Paul Daugherty: We also have another component of Accenture Ventures, which we call Open Innovation. It’s our program for working with all the entrepreneurs, accelerators, and incubators that we can find. We have a team that focuses specifically on open innovation.
We currently have over 3,000 startups that we’ve met with. We’ve curated and understand what we do. That number is ever growing and is growing very rapidly. We curate them into a framework so that we understand, for a given startup, what stage they are at, how ready they are to go to large corporate clients, and what industry and geography they specialize in. We have a system that we track all that in.
We meet with startups continuously to understand all this. We invest in a subset of them. The real difference for the startup community is that we can be a bridge for them. When the client comes in with a challenge that wants to expand and go into agricultural products, we identify about a dozen potential startups that could help them accelerate into that market very rapidly.
It turns out we ended up using a number of those to quickly ramp up and create a new business for retail. Accenture was able to do something very innovative by doing that matching. The client got acceleration and they were able to accelerate the growth of these startups by giving them a channel. That’s one example of what we do everyday in working in that bridge maker role. We tend to work with the Global 2000.
Sramana Mitra: Very interesting. This is probably something we should start collaborating on and make sure that our startups get access to your program.
Paul Daugherty: That’s a really good area to explore.
Sramana Mitra: Switching gears a little bit, in the last nine months or so, we probably had a hundred investors in the very early stages of the investment game come on to our podcast and talk about what they are doing and what they are looking for. I always ask them what they have seen in their deal flow that would be representative of the trends that are going on in the startup industry.
Unanimously, the one thing that comes up over and over again in recent times is artificial intelligence. I imagine, for you, this is a huge trend. Talk to us about it. I know you’ve written a book on this. Talk to us about what is happening in AI and how are you folding all of that into your innovation strategy at Accenture.
Paul Daugherty: I studied AI many years ago in college. It has changed a lot since then. There were some fundamental advances about six or seven years ago in deep learning algorithms that allowed us to take deep learning to a new level combined with computing advances like CPU and storage and data advances that led to the take off of AI in a big way. I describe AI as the alpha trend that we see in our business.
I’ll just state for the record here that I’ve been with Accenture for 32 years. I’ve been through everything from punch cards, relational database, Internet, to IoT. We’ve never seen a trend grow as fast as AI is growing right now in terms of number of startups, venture capital inflow, revenue to our business, speed at which we are acquiring and training AI talent. We have the fifth largest pool of AI talent based on some independent service.
The challenge for us is, how do you deploy AI in the right way to drive business value. How do you avoid some of the pitfalls and issues around responsible application of AI and data bias? The reason we wrote the book is we wanted to provide a management guide into how to navigate all those challenges that businesses could accelerate because we believe that the potential of AI is huge. That’s what we see in our business.
What we’re looking for in the entrepreneurial community is better solutions that can accelerate speeds at which we can drive value to our larger clients. I met with a very interesting company yesterday for example. They have a very interesting machine learning algorithm to sort out criminal fraud in the banking environment. They have a very interesting novel approach. I think there’s tremendous opportunity for entrepreneurs to combine AI and some industry knowledge to create some exciting new businesses. It’s an interesting time in technology.