Texas Border Business
It seems that everywhere you look these days, there’s a new headline related to Artificial Intelligence (AI) and its implications. Billions of dollars in data center construction are generating economic benefits in communities across the country, initial public offerings for major players are garnering headlines, and chipmaker Nvidia’s market valuation is topping $5 trillion. AI is having multifaceted and massive effects, and there’s no end in sight.
A key question, however, is how common AI usage is in the business world. While many people love its amazing capabilities on a personal level, huge investments in technology only make economic sense if they are used in commercial settings and create sustainable value. The more AI can enhance productivity and efficiency, the more it will grow the economy while generating profits to those enabling its usage.
According to the US Census Bureau’s Business Trends and Outlook Survey, overall AI usage by businesses has been trending between 17% and 20% over the past six months, and a slightly higher percentage of companies expect to use it soon. Larger firms (those with at least 250 employees) are far more likely to use AI (37%), and deployment is growing somewhat faster than in smaller companies. Some 32% of those with 100-249 workers indicated usage, with the frequency dropping to below 20% for smaller enterprises.
Use rates also vary by industry, with the highest being about 40% in Information and 34% in Finance and Insurance. By contrast, businesses in the Retail Trade sector reported current and expected usage of only about 14%.
A closer look at how the technology is being used reveals that the scope remains somewhat limited, with 57% of users integrating AI in three or fewer business functions. Most users (66%) rely on AI solely to augment tasks, especially involving Sales and Marketing (52%), Strategy and Business Development (45%), and IT (41%). Writing, document analysis, and information searches are the leading Generative AI uses.
Although there have been high-profile layoffs where AI conversion had been blamed, these instances represent small proportions of the overall workforce. Some companies have also indicated that they may hire fewer entry-level workers, but in reality such strategies aren’t sustainable over time without running out of employees with the appropriate experience profile. Every major technological development tends to bring some disruptions in its early stages, but ultimately the jobs added are inevitably far more than those lost. There is a need for folks to adapt their skills to embrace AI, much as we did with the computer, the internet, and myriad innovations throughout history. If the value proposition expands as anticipated, it will be an increasing part of our lives going forward. Hitch up and hold on! Stay safe!
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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of more than 3,000 clients over the past four decades.
