CEO of Smartlink communication. Global analyst, consultant and trainer, passionate about leadership, global communication and competition.
The ongoing discussion about artificial intelligence (AI) tends to get so hot that simple business considerations are often left out of the debate in favor of large-scale opportunities and threats brought to the fore by AI.
Certainly, common fears do not need to be dispelled. According to a Pew Research Center report, 62% of Americans believe AI would have a major impact on jobs, while 32% believe AI will generally harm workers. In addition, AI can already be used to make decisions that affect people’s lives, such as determining the suitability of a loan or hiring decisions.
However, it is the individual decisions of business leaders that will ultimately shape the Fourth Industrial Revolution, and the context of those decisions is often more human and complex than grand narratives allow.
First and foremost, companies must survive. AI is rapidly changing the business landscape, bringing new opportunities and threats to companies across industries. As AI technology continues to evolve, companies must adapt and evolve to stay competitive.
So it makes sense to step back and look at things from the manager’s office.
Contents
Opportunities for business
First, let’s look at two immediate probabilities.
efficiency: According to Brookings, AI has the potential to increase labor productivity 33% over 20 years. And according Goldman Sachs, generative AI could increase global GDP by nearly $7 trillion. This increase in productivity can lead to higher economic growth and greater prosperity for companies and employees.
Customer Experience: Based on a report from Salesforce, 73% of customers expect companies to understand their needs and expectations. AI can be used to create personalized customer experiences, such as chatbots that can answer customer questions or recommendation engines that suggest products based on a customer’s browsing history. This can lead to increased customer satisfaction and loyalty, important in the context in which attracting new customers can take place six to seven times the cost of keeping one.
Threats to business
Then there are several threats that every manager should be aware of.
retraining: Current estimates are about that 15% of current jobs (registration required) will go and about 80% will be partially automated. That can be positive, provided some retraining of staff and new hires is ensured for new roles that support AI, such as data scientists and AI specialists. However, conversion is never easy and many people could feel abandoned.
Security: This is according to a report from PwC. 49% of CEOs cite cybersecurity as the top threat to their business. As the use of AI increases, so do the data streams that a company must maintain, and with it, the risks increase exponentially. AI also means that IT is becoming more business-critical and employees need to be trained to handle that aspect of the job.
Getting behind: Last, but perhaps most relevant, is the threat of being left behind. While the McKinsey Global Institute estimates approx 50% to 60% of companies surveyed have adopted AI to some degree, in fact a minority reporting increasing financial returns.
For example, while the media narrative focuses on massive job cuts or tipping points in social development, I find that most executives are concerned about a simpler number: the cost of developing ChatGPT-4, the chatbot that made headlines recently, was about $100 USD. million and it reportedly costs approx $700,000 to walk per day. Purpose-driven large language models (LLM) can be developed significantly more cheaply, and analog math can reduce costs in the long run, but in the current situation most companies simply don’t have the resources to build up similar resources, leaving them with access only to a shared resource that is not a competitive advantage.
A Business New Deal
All this implies that a new deal between companies and governments may be needed.
As mentioned, companies often have no choice but to embrace AI-related technologies to remain competitive and relevant to customers. But that need for change, without the right support, can also lead many companies to jump headlong into AI threats.
Proactive customization can include everything from integrating cloud AI services into business workflows, but it can go beyond that. Limited but purposeful English language LLMs can be built for the cost of a web scraper and the computing power required for training.
Many who find themselves not integrating AI into some of their current workflows may be behind the curve. As the McKinsey Global Institute reports in the 2021 State of AI report, 56% of managers report that it already incorporates at least some AI technology.
Sometimes “AI onboarding” may not even be necessary. As open models become more widespread, many companies that have been digitally upskilling in recent years will start working with AI.
Governments can act to support businesses.
First, grants and initiatives to retrain staff to use AI in their work can broaden successful adoption. Second, clearer data security legislation can encourage data providers to fully assume their fast-growing role as part of the national infrastructure. Third, governments need to be clear on AI and provide a stable legal framework for businesses to adapt without fear of a populist backlash.
take away
As AI technology continues to develop, it will play an increasingly important role in the business world. Companies that embrace and use AI strategically will be better positioned to succeed in the AI era. But leaders and governments are increasingly playing a role in leveling the playing field to seize AI opportunities and mitigate threats.
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