CEO of Smartlink Communications. Global analyst, consultant and trainer, passionate about leadership, global communications and competition.
The current discussion on artificial intelligence (AI) tends to heat up enough that simple business considerations are often left outside of the debate in favor of large-scale opportunities and threats brought forward by AI.
Certainly, general fears need not be dismissed. According to a report by Pew Research Center, 62% of Americans believe AI would have a major impact on jobs while 32% believe AI will generally hurt workers. Plus, AI can already be used to make decisions that impact people’s lives, such as determining loan eligibility or hiring decisions—with 71% of American respondents saying they would oppose AI making a final hiring decision.
It is, however, the individual decisions of business leaders that will ultimately shape the Fourth Industrial Revolution, and the context of those decisions is often more humane and complex than grand narratives allow for.
First and foremost, businesses need to continue to stay in business. AI is rapidly changing the business landscape, presenting new opportunities and threats for businesses across industries. As AI technology continues to advance, businesses must adapt and evolve to remain competitive.
So, it makes sense to take a step back and see things from the manager’s office.
Opportunities For Business
First, let’s look at two immediate opportunities.
Efficiency: According to Brookings, AI has the potential to increase labor productivity by 33% over 20 years. And according to Goldman Sachs, generative AI could raise the global GDP by nearly $7 trillion. This increase in productivity can lead to higher economic growth and greater prosperity for businesses and workers.
Customer Experience: Based on a report by Salesforce, 73% of customers expect businesses to understand their needs and expectations. AI can be used to create personalized customer experiences, such as chatbots that can answer customer inquiries 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 clients can take six to seven times the cost of retaining one.
Threats For Business
Then there are several threats that each manager needs to be aware of.
Retraining: Current estimates are that about 15% of current jobs (registration required) will go and about 80% will be partially automated. That can be a positive thing, provided that some retraining for staff and new employees for new roles that support AI, such as data scientists and AI specialists, is provided. However, reconversion is never an easy thing and many people could feel left behind.
Security: According to a report by PwC, 49% of CEOs cite cybersecurity as the main threat to their business. As AI use increases, the data flows that a business needs to maintain also increases and risks tend to increase exponentially with that. AI also means IT becomes more mission-critical and employees need to be trained in handling that aspect of the job.
Falling Behind: Last but perhaps most pertinent is the threat of being left behind. While the McKinsey Global Institute estimates about 50% to 60% of surveyed companies adopted AI to some extent, it is actually a minority that reports increasing financial returns.
For example, while the media narrative focuses on large-scale job losses or inflection points in social development, I find that most managers are worried about a simpler figure: the cost of developing ChatGPT-4, the chatbot which made recent headlines, was about USD 100 million and it reportedly costs about USD 700,000 per day to run. Purpose-focused large language models (LLM) can be developed for significantly cheaper, and analog computing may bring costs down in the long term but as it stands most businesses simply do not have the resources to build similar resources, thus only having access to a shared resource that is not a competitive advantage.
A Business New Deal
All these imply that a new deal might be needed between businesses and governments.
As stated, businesses often have no choice but to embrace AI-related technologies in order to stay competitive and relevant to customers. But that need for change, without the proper support, may also leave many businesses having to dive headfirst into AI’s threats.
Proactive adaptation may include everything from integrating cloud AI services into business workflows but can go beyond that. Limited but purposeful English-language LLMs can be built for the cost of a web scraper and the computing power needed for training.
Indeed, many who find themselves not incorporating AI in some of their current workflows may find themselves behind the curve. As the McKinsey Global Institute reports in the 2021 State of AI report, 56% of managers report incorporating at least some AI technology already.
Sometimes, “AI onboarding” may not even be necessary. As open models become more pervasive, many companies that upskilled digitally during the previous years may find themselves working with AI.
Governments can act to support businesses.
First, grants and initiatives for retraining staff in adopting AI into their work can broaden successful adoption. Secondly, clearer legislation on data security can encourage data providers to fully adopt their burgeoning role of being part of national infrastructure. Third, governments must remain clear-eyed about AI and provide a stable legislative framework in which businesses can adapt without fearing a populist backlash.
Takeaway
As AI technology continues to advance, it will play an increasingly important role in the business world. Businesses that embrace AI and use it strategically will be better positioned to succeed in the age of AI. But leaders and governments have an increasing role in evening out the playing field such that the opportunities of AI are seized, and threats mitigated.
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