Artificial Intelligence (AI) is a domain of computer science which deals with thedevelopment of

intelligent computer systems, which are capable to perceive, analyze,and react accordingly to the inputs
[1,2]. It is well-known fact that humans are consid-ered as the most intelligent and smart species on
earth. The features which have helpedthem to bag this title include the ability to think, apply logic, do
reasoning, under-stand the complexity, and make decisions on their own. They can also do
planning,innovation, and solve problems to a greater extent. However,for researchers, it can be
considered that sky is not the limit for new inventions. So,they tried to create a “man-made
homosapien” species, which can be related to theworld of computers in the form of AI (which are
Artificial, i.e., manmade, and Intel-ligence, i.e., has thinking power). If a system can have the basic skills
like learning,reasoning, self-improvement (by learning from experience), language understanding,and
solving problems, then it can be assumed that there is the existence of AI. The AIhas been used and
implemented in many fields especially in technological domainand is expected to provide 2.3 million
jobs by 2020. It is a cutting-edge technologywhich has its impact in almost every field, be it business,
defense, aerospace, or healthcare systems. It can also be denoted as the method of simulation of
human intelli-gence designed or programmed by humans. With the help of AI, a well-equippedlife is
generated where the automated machines work for humans, saving their timeand energy. Basically, two
types of assistants are considered for humans, manual(in the form of robots), and digital (Chatbots)
which can perform risky, repetitive,and troublesome tasks.

Types of AI (Based on Capabilities)

The various types of artificial intelligence based on the capabilities can be classified as

– Weak or narrow AI

– General AI

– Strong Al

Weak or narrow AI: it is a type of AI which can perform a predefined narrow set ofinstructions without
exhibiting any thinking capability. It is the most widely used typeof AI in this world. Some famous
examples are Apples’s Siri, Alexa, Alpha Go, IBM’sWatson supercomputer, Sophia (the humanoid) all
belong to the weak AI type.

General AI: it is the type of AI which can perform the tasks like what human cando. Till now it is not
achieved, there are no such machines which works like humanor can think as perfectly as human, but it
may happen in near future.

Strong AI: it is the type of AI in which it is expected that the machine will surpassthe capacity of human.
It will perform better than humans, though it is tough, but itis not impossible. It may be the situation
when it can be said that the machines willbe the master and overtake humans. It has been considered as
a great threat to thesociety by scientists including Stephen Hawking.
Types of AI (Based on Functionality)

Based on the functionality, artificial intelligence can be classified as per the followingtypes:

(i) Reactive machines

(ii) Limited memory

(iii) Theory of mind

(iv) Self-awareness.

Reactive machines: these are the machines which works on the data available in theform of predefined
dataset. It does not have the facility of data storage for storingthe past and future data. It completely
depends on the present data. IBM’s chessprogram which defeated famous champion Garry Kasparov
and the deep blue system,Google’s AlphaGo are some of the examples for reactive machines.

Limited memory: these are the machines which can store the past experience orstore the memory for
limited period of time. An example for limited memory AI isthe self-driving cars (it can store the
information like speed, distance, speed limitrequired for the navigation of the car).

Theory of mind: these are types of machines, which are expected to understand thepsychological and
emotional aspects of human mind and work accordingly. So farsuch machines are a dream but scientists
are working to develop such machines innear future.

Self-awareness: these machines belong to a hypothetical concept that will be consid-ered as super-
intelligent machines, which can think, act, and will be self-aware asthey will have consciousness and
sentiments like humans. Research is carried out todevelop such machines and considered as future AI.

Applications of Artificial Intelligence in Modern World

Artificial intelligence has been evolved as one of the most important technology inthis world, with its
impact on almost every field of human endeavor. It was all startedin the year 1950s, after its invention
by John McCarthy (the father of AI). With time,it has played a significant role in helping the human
generation to become moreadvanced and equipped than ever before. It can be mentioned that it has
spread thebroad spectrum of its application from “the soil to the space”. The 24 ×7 Internetfacility, the
invention of cloud technology, the concept of big data, sensors, and othertechnological advancements
have turned up as a boon for the development of AI.Although AI has not yet replaced humans
completely, it has assisted humans to agreat extend in solving and handling the problems which are
difficult and risky. Inthe form of intelligent machines, it has played the role of representative of
humanbeings. Today, AI has found wide applications in agriculture, business, education,entertainment
industry, medical, defense, and space technology where it has crucialand admirable effects. It has a
great impact in the health sector which has helpedto bridge the gap between technology and medicine,
in diagnosing the patients. Itrequires data accuracy and security and the trust of the patients on the
system. It hasalso many amazing applications of robotics in the form of robots performing surgeryor
assisting in diagnosis. Basically, AI deals with large amount of data to obtain therequired results, and
accordingly the algorithms are designed to reduce the chancesof error and provide accurate results. As
already mentioned, the spectrum of itsapplication has spread from soil to space as a booming
technology for the bettermentand development of human life. Following are few of the application
areas of AI anddata based on some case studies.

Business, Banking, and Finance

This industry or sector is very important and delicate to protect the data and recordsof millions of
customers. The prime factor is the trust, data transparency, and securityof the customers. But
unfortunately, till date, AI is unable to stop any fraud cases.However, with the help of AI many fraud
detection methods and technologies are nowoffered to make the system more robust. Similarly, the
business and retail market arealso getting benefited by improvised methods of customer handling and
providingfaster and safer services. The world of e-commerce is highly affected by its high-levelof
customer interaction.In the finance and banking sector, AI has come up with many technological
aidseither in form of apps or methods to prevent from frauds, enhance better customer
datastorage/retrieval, and many more. A study by a bank helped online fraud detection solution
provider, i.e., Teradata which helps to manage the false positive cases anddetection of real frauds.
Another study revealed that the payment fraud over anomalyof data is nicely dealt by a client bank
using the software Feedzai, using which thebank got a hike of 78% of new customers. DataVisor
software helped a bank in USAto detect the fraud in loan and repayments and get profit by 30% with a
high accuracyof 90%. Similarly, in business sector, AI has helped many IT firms like Deloitte, IBM,Infosys
to bloom in the market as a better technological service provider. Elsevierundergone a digital
transformation from being a publisher to a tech with the help ofbig data and machine learning

Concept of innovation

“Innovation consists of the generation of a new idea and its implementation into a new product,
process or service, leading to the dynamic growth of the national economy and the increase of
employment as well as to a creation of pure profit for the innovative business enterprise. Innovation is
never a one-time phenomenon, but a long and cumulative process of a great number of organizational
decision-making processes, ranging from the phase of generation of a new idea to its implementation
phase. New idea refers to the perception of a new customer need or a new way to produce. It is
generated in the cumulative process of information-gathering, coupled with an ever-challenging
entrepreneurial vision. Through the implementation process the new idea is developed and
commercialized into a new marketable product or a new process with attendant cost reduction and
increased productivity” (Urabe, 1988). In general, the concept of "innovation" - a rather complex
and multifaceted, his study of the subject of many studies, but, despite this, the generally
accepted definition of innovation in science does not exist.

Schumpeter, which may be called the founder of the theory of innovation in the economy generally,
regarded innovation as the economic impact of technological change, as the use of new
combinations of existing productive forces to solve the problems of business. (Schumpeter, 1982).
According to Twiss, innovation - a process that combines science, technology, economics and
management, as it is to achieve novelty and extends from the emergence of the idea to its
commercialization in the form of production, exchange, consumption. (Twiss, 1989). According to the
interpretation of Molchanov, innovation is the result of scientific work aimed at improving the social
activities and intended for the implementation of social production. (Siauliai, 2013).

Afuah, (2018) refers to innovation as new knowledge incorporated in products, processes, and services.
He classifies innovations according to technological, market, and administrative/organizational
characteristics.

Empirical framework

Alexander (2016) conducted a study on

The paper presents the different definitions of innovation; the objective of the research being that of
creating a theoretical model building on the previous work of several authors. The aim of the research is
to define the different models, classifications and definitions of innovation. In this article we made use
of a wide range of bibliographical sources on innovation, efficiency and also used comparative analysis
of innovation definitions. Theoretical concepts were studied as well. The approach was constructed
based on theoretical models of innovation definitions and used the technology and market perspectives.
The main methods employed were comparative analysis of definitions of innovation and the creation of
a model of innovation. It has been emphasized in the literature that the role of innovation is very
important for making decisions regarding investment projects or investments for production. Innovation
can bring benefits such as saving time, costs, and products and use them more effectively. Nowadays in
the world, innovation is one of the most important factors of economic development, production,
creation of a variety of products and in making management decisions. Innovation activity stimulates
and has a positive effect also in investment activity.
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