[85] What Is Stopping Businesses From Adopting AI?
[Beyond Tech, AI, Geographical Differences]
GM Readers!
Sharing an essay I wrote for my Evolving Internet Insights Newsletter unpacking what’s holding businesses back from fully bracing the AI revolution.
Friendly reminder: moving forward I will release weekly Life in Color Essays on Tuesdays!
-LJW
(P.S. For the summary and further breakdown of this essay, follow me on Twitter)
🚨New Newsletter🚨:
Launched a new short form weekly newsletter where we cover the week’s top emerging tech stories and add our insights on top.
Read Issue #8 👉 [HERE] 👈
And remember to SUBSCRIBE 🙏
P.S. Life in Color is not going anywhere :)
Note: Some sections of this essay were originally released on my Evolving Internet Insights newsletter.
_Foreword
It’s clear AI will have widespread impacts on every single company. As a technology, it’s as foundational as the Internet. But like most technologies, who adopts first and who benefits is all over the map. 🗺
_AI Adoption Differ Across Regions
McKinsey’s State of AI Report highlights that North America and Asia Pacific exhibit the highest percentages of companies “regularly using” generative AI tools for work.
With North America companies leading the charge at 28% of them regularly using generative AI tools for work, that same figure is 20% for companies in developing markets.
If you ask executives today about AI, you’ll find it’s on the top of their agenda, particularly how to implement and use AI in their businesses.
With this, you’d think that a greater percentage of companies would be using AI regularly. (Read: why is that “headline” number only 28%?)
There are two broad questions here:
What is stopping companies from implementing AI to its fullest extent, especially if executives see AI as their highest strategic priority?
What is driving the disparity across regions?
_What is preventing companies from fully embracing AI?
Ethan Mollick, a professor at Wharton, outlined in his blog that one of the key reasons why companies are having trouble capturing the benefits from AI is that there aren’t policies that promote its use.
It sounds rather obvious but at the onset of new technologies, everyone tends to focus on the magic of the technology but forget about the other important things that enable and incentivize people within organizations to use the technology.
Technology without purpose leads to minimal adoption.
On the other side of the spectrum, Mollick highlights that some companies have banned their employees from using generative AI tools. This has pushed employees to use AI “in the shadows.” Mollick highlights that these policies ”are causing employees to bring their phones into work and access AI from personal devices.” Ironically, this makes organizations worse off because employees using it in the shadows actually puts more data at risk.
As more AI companies bring solutions to market, they’ll also need to segment their products across consumer focused applications and enterprise level solutions. Recently Open AI announced their enterprise solution, which should alleviate some the concerns from companies adopting AI.
The big “So What” is: as with all new technologies, some folks lean into the change and adopt early, while others try to preserve the status quo.
Those early adopters can reap the rewards ahead of their competitors.
A “big, hairy, and audacious goal” for companies who understand the power of AI will be how to motivate their workforces to use the technology responsibly and to gain efficiency.
Remember, innovation cannot be put back in a bottle. 🍾
_What is driving the disparity across regions?
There are some regional disparities when it comes to adopting AI.
Let’s look at LatAm as an example — a region that has shown tremendous interest in using AI. In LatAm, 62% of people agree that “products and services using AI have more benefits than drawbacks” compared to 49% for the rest of the world.
The challenge for LatAm-based entrepreneurs building with AI is the cost. Most startups use OpenAI and it costs about $0.03 per 750 words. While these figures may feel small at first glance, purchasing power is quite different across regions, and if you are a startup that is looking to use ChatGPT to create content for customers, this cost scales very quickly.
Compared to its North American counterparts, LatAm faces a different problem: they have the interest to adopt the technology, but the costs have not decreased enough for everyone to implement AI (fully) into their businesses.
The “So What” for founders is: emerging markets represent a huge opportunity to build companies that enable wider access to AI for all. While OpenAI may not get cheaper, there is an opportunity to leverage open source models and infrastructure products that meet the cost constraints of entrepreneurs in emerging markets.
_Zooming Out
AI will usher in a “New Normal” like the Internet did.
Today, the number of businesses and people who have some sort of Internet presence is only going in one direction — up and to the right. Being on the Internet today is table stakes.
We are quickly entering the “New Normal” in AI and using and integrating AI becoming table stakes.
AI is both important and urgent for businesses (and even individuals) to think about!
🤖🦾
Additional Readings: Here, Here
Relevant Essays:
🎨 Other Life in Color Essays You Might Enjoy: [AI Rewires our Work Model] + [The AI Renaissance] + [How Barbie Used AI to go Viral]
SHAMELESS Ask:
🙏 Share Life in Color with a friend and ask them to subscribe
🙏 Share on Twitter / Linkedin with a short note
🙏 Share on your company Slack / Teams channels and communities
🛟 Disclaimer:
This post is provided for educational and informational purposes only. Nothing written in this post should be taken as financial advice or advice of any kind. The author(s) may own some of the NFTs, art and/or collectibles mentioned in this post. The content of this post are the opinions of the authors and not representative of other parties.
Empower yourself, DYOR (do your own research).