How Big Will the Financial Impact of Virtual Human Agents Be?
Virtual Human Agents (VHA) are changing the way the world works. Their financial impact could reach trillions of dollars — faster than you think.
Industries and technologies’ impact is measured by a multitude of parameters, including market size and impact on related fields. The same applies to Virtual Human Agents (VHAs) like those created by Couger. While the exact figures remain difficult to predict, the near-future market for VHAs will be measured in billions of US dollars — and could well reach into the trillions once all factors are considered.
Rising Value in a Changing World
Outlining accurate predictions for a technology’s impact is challenging — especially in a year where much has changed due to Covid-19.
VHAs are ideal for overcoming many of the effects and challenges generated by the global pandemic, indicating that they will see a growing market. On the other hand, the world economy has undergone a general slow-down. Balancing out the effects, we believe there is an argument for the near-future market for VHAs growing and seeing a rapid rise as the economy returns toward normal.
Part of the reason is that VHAs is a touchless technology that can replace many current, touch-based solutions. Many companies and institutions are looking to increase their overall resilience to potential outbreaks. Their preparations will include the introduction of more touchless and voice-controlled technology, which matches with VHA abilities.
Furthermore, VHAs can take on various roles and responsibilities throughout our daily lives and professional environments.
Calculating the Market Size
Even before 2020, the projected market sizes for intelligent virtual human systems were billions of dollars. One report put it at US$ 3,442 billion in 2019, projected to reach US$ 44,255 billion by 2027, growing at a CAGR of 37.7% from 2020 to 2027.
The market size in this context primarily refers to the direct sales of VHA and VHA-like solutions. The buyers can be everyone from private companies and public organizations to individual users.
Projecting future market size for technology — especially disruptive new technology such as VHAs — can be complicated. One of the factors that you must look at is how the market size will grow as more and more people can access the technology. In the case of VHA technology, the spread of high-speed internet, 5G networks, and access to modern hardware, such as smartphones, will increase the market size rapidly. The same goes for the number of use cases.
At Couger, we are working with the SDK kit, which is one way to extend the use of the VHA into new areas. This fact contributes to us believing that the US$ 44 billion — while impressive — is very much at the low end of the scale.
It is a point of view shared by some of the world’s premier analytics companies, who have looked at the business value of VHA-like technology.
What About Business Value?
The overall business value generated by a technology extends beyond direct sales incorporating all benefits to both companies and their customers.
VHAs are AI-powered, which is an area expected to drive US$ 2.9 Trillion of business value in 2021. Furthermore, VHA technology is also part of the market for virtual agents, which are expected to drive $1.2 trillion in business value in the near future.
VHA technology will not be exclusive to either area — nor will they account for all business value in each space. But it stands to reason that they will help drive business value across all the fields that Gartner has segmented the AI market into:
- Decision Support/Augmentation
- Agents
- Decision Automation
- Smart Products
All four areas match VHAs abilities and strengths. Today, many routine tasks are being automated. We can expect the complexity of these tasks to increase as the AI matures. This should enable even more organizations to improve operations through VHA technology.
Contrary to popular belief, more automation will not necessarily result in fewer jobs. Gartner predicts that “In 2020, AI becomes a positive net job motivator, creating 2.3 million jobs, while eliminating only 1.8 million jobs.”
What is Included in AI-driven Business Value?
In its analysis, Gartner included customer experience, revenue generation, and cost reduction as the core elements of the study. Reaching a number like 1.2 trillion based on such an overlay may initially seem very big, but looking at real-life examples helps qualify the figures.
For example, if companies have an average of 10 customer support agents handling routine tasks, such as directing calls to specific experts and dealing with standard customer requests. In many western countries, an agent’s average cost would be somewhere between $30,000 and $40,000 when all factors are included. VHA can generally be deployed to handle such tasks for less than 1/10 of that price.
In the US alone, there are currently around 75,000 companies with more than 250 employees. In our example, they are currently paying between $2,25 and $3 billion and would be able to save literarily billions of dollars on introducing VHA-technology.
Furthermore, this is just the automation of one task for one group of companies — in one country. VHAs have many more use cases, so the impact is likely exponential.
