The state of AI in 2023: Generative AI’s breakout year

The state of AI in 2023: Generative AI’s breakout year

In recent years, AI has gone from being a niche topic discussed only among tech employees to becoming a key focus for company leaders. According to a survey, almost one-quarter of C-suite executives personally use generative AI tools for work. Additionally, one-quarter of respondents from companies using AI reported that generative AI is already on their boards' agendas. This shows that AI is no longer just a buzzword, but a technology that is actively shaping the strategies of organizations.

However, it is still early days for managing the risks associated with generative AI. Surprisingly, less than half of the respondents in the survey said their organizations are mitigating the risk they consider most relevant - inaccuracy. This highlights the need for organizations to prioritize risk management when it comes to AI implementation.

Despite the potential risks, experimentation with generative AI tools is already relatively common. Respondents in the survey expressed their anticipation for the transformative capabilities of these tools, with 79 percent reporting some exposure to generative AI either for work or outside of work. Furthermore, 22 percent of respondents stated that they regularly use generative AI in their own work. The most commonly reported business functions using these newer tools are marketing and sales, product and service development, and service operations such as customer care and back-office support.

The expectations for generative AI's impact are high, with three-quarters of respondents expecting it to cause significant or disruptive change in the nature of their industry's competition within the next three years. Industries heavily reliant on knowledge work are likely to experience more disruption and potentially reap more value from generative AI. This is due to the technology's strengths in language-based activities rather than physically demanding tasks.

Interestingly, manufacturing-based industries such as aerospace, automotive, and advanced electronics may experience less disruptive effects from generative AI. This is a notable shift from previous technology waves that primarily affected manufacturing. However, it is important to note that few companies seem fully prepared for the widespread use of generative AI and the potential business risks associated with it.

In terms of addressing AI-related risks, respondents in the survey cited inaccuracy as a concern more frequently than cybersecurity and regulatory compliance. This highlights the need for organizations to prioritize accuracy in their AI systems. Most respondents stated that their organizations are not adequately addressing AI-related risks, indicating a significant gap in risk management strategies.

Respondents from AI high performers are twice as likely as others to state that their organizations' top objective for generative AI is to create entirely new businesses or sources of revenue. They also mentioned the increase in the value of existing offerings through new AI-based features. This demonstrates the potential for generative AI to drive innovation and create new opportunities for businesses.

Looking ahead to the next three years, respondents predict that the adoption of AI will reshape many roles in the workforce. While there may be concerns about job displacement, the survey results suggest that more employees will be reskilled rather than separated from their roles. Nearly four in ten respondents expect that more than 20 percent of their companies' workforces will be reskilled. Only 8 percent of respondents predict a decrease in workforce size by more than 20 percent. However, when it comes to the predicted impact of generative AI, most respondents expect a decrease in workforce size specifically in service operations.

It is important to note that the emergence of generative AI has increased the estimate of worker activities that could be automated. However, this does not necessarily mean the automation of entire roles. Instead, it highlights the potential for AI to augment and enhance existing job functions.

In conclusion, the state of AI in 2023 is characterized by the breakout of generative AI. Company leaders are increasingly adopting these tools, but there is still a need for better risk management strategies. Organizations must prioritize accuracy in their AI systems and address AI-related risks more comprehensively. As the adoption of AI continues to reshape the workforce, reskilling efforts will be crucial to ensure that employees can adapt to the changing landscape. To prepare for the future of AI, organizations should focus on creating new businesses or revenue sources and leveraging the value of existing offerings through AI-based features.

Actionable advice:

1. Prioritize risk management: Ensure that your organization is actively mitigating the risks associated with AI, particularly inaccuracy. Implement robust strategies to address AI-related risks, including accuracy, cybersecurity, and regulatory compliance.
2. Invest in reskilling: As AI adoption reshapes roles in the workforce, prioritize reskilling efforts to equip employees with the necessary skills to thrive in the changing landscape. Identify areas where reskilling is needed and provide opportunities for continuous learning and development.
3. Embrace innovation: Look for opportunities to leverage generative AI to create new businesses or revenue sources. Explore how AI can enhance and add value to existing offerings, driving innovation and staying ahead of the competition.

By following these actionable advice, organizations can navigate the evolving AI landscape successfully and harness the transformative power of generative AI for their business.