From Job Displacement to Job Creation: How Companies Can Embrace AI Innovation

At a Glance

•AI is rapidly spreading in the business world, and it has the potential to both displace jobs and create new ones.
•Companies that want to mitigate the risks of AI unemployment need to proactively embrace AI innovation.
•This means adopting a bias for boldness and a startup mindset, and investing in AI skills and experience.
•By doing so, companies can create new avenues of value creation and ensure a continuous cycle of job creation.

KEYPOINTS

•The pace of AI adoption is accelerating, and it is likely to have a significant impact on the job market.
•Some companies have already embraced AI and have created new jobs as a result.
•However, other companies are still hesitant to adopt AI, and this could lead to job displacement.
•The best way to mitigate the risks of AI unemployment is for companies to proactively embrace AI innovation.
•This means investing in AI skills and experience, and adopting a bold and startup-like mindset.

In recent years, the pace of AI adoption has accelerated, and its impact on job markets has become a topic of discussion. While historically new technologies have not led to widespread unemployment, the rapid integration of AI into operations suggests that job losses may occur before the benefits are fully realized. This situation poses a particular challenge for white-collar workers, whose specialized knowledge may no longer provide the same level of job security.

To address this risk, there are two potential approaches. The first involves government intervention, either by regulating the commercial adoption of AI (which is highly unlikely) or implementing welfare programs to support and retrain those affected by job displacement. However, an alternative solution exists, one that does not rely on government action but rather on the proactive stance of companies themselves.

Some companies have already embraced generative AI not merely for task automation but also to enhance employee productivity and enable them to achieve more than before. By radically redesigning corporate processes, these companies unlock new avenues of value creation, which can lead to the creation of additional jobs. If many companies adopt this approach, we can overcome the short-term displacement caused by AI technology and ensure a continuous cycle of job creation.

However, the challenge lies in whether companies will rise to the occasion. While most companies excel at cost-cutting measures, innovation often poses a greater challenge. In the past, gradual industry changes allowed for innovation to keep pace with job displacement, resulting in the creation of new jobs. Yet, with the swift transition to AI, we no longer have the luxury of time.

Therefore, the solution lies in numerous companies innovating at a faster pace, creating new jobs as quickly as existing ones are eliminated. Generative AI is rapidly spreading in the business world, presenting an opportunity for companies to accelerate their innovation efforts. By adopting a bias for boldness and a startup mentality, businesses can navigate this transition successfully and mitigate the risks of AI unemployment.

However, it is important to note that companies should not view AI solely as a means to address macroeconomic challenges. Instead, they should recognize the inherent business benefits of embracing AI and position themselves for long-term success.

Seizing the AI Advantage

Several companies have already taken significant steps toward AI innovation. Elon Musk, known for his trailblazing achievements with reusable rockets and electric cars, has set his sights on making Twitter a leader in AI, alongside Microsoft and Google. While Musk’s endeavors are noteworthy, it is essential to understand what it means for a company to proactively engage with AI.

To shed light on this matter, let’s examine what distinguishes agile and innovative companies from those that remain neutral or defensive. A research team studied 26 sizable companies from 2006 to 2022, categorizing them based on agility and innovation levels. The team identified eight drivers of agile innovation: existential purpose, customer-centric focus, influential leadership, a startup mindset, a bias for boldness, radical collaboration, tempo control, and bimodal operations.

Companies that excel in these drivers demonstrate the ability to navigate change successfully. For instance, Microsoft achieved corporate leadership by overhauling its hierarchy and forging partnerships, such as the one with OpenAI. Similarly, other companies have capitalized on AI by embracing the drivers of boldness and a startup mentality, triggering transformative changes throughout their organizations.

Bold AI Strategies

Merely investing in AI will likely yield incremental gains, such as cost-cutting. However, cautious investment alone will not lead to substantial value creation or a defensible niche in the long run. To address the macroeconomic challenges and remain competitive, companies must adopt a bias for boldness, embracing and maximizing the potential of AI technology.

Consider the example of Adobe, a leading provider of Photoshop. Instead of cautiously adopting generative AI in select areas, Adobe boldly integrated it deeply into Photoshop, enabling ordinary users to create videos with newfound ease. By having the courage to invest aggressively in AI, Adobe elevated its users’ capabilities and seized the opportunities AI presented.

Nvidia, a prominent chipmaker, provides another example. The company’s success in offering superior semiconductor chips for AI is not accidental. Nvidia has actively acquired and developed AI expertise, including customized chips and software, over the past decade. This boldness has enabled Nvidia to deliver higher-value offerings and unlock AI’s potential beyond simple cost-cutting measures.

While boldness does not guarantee success in every instance, it is crucial to overcome risk aversion ingrained within corporate hierarchies. Embracing boldness allows companies to capitalize on AI’s transformative power.

Startup Mindset for AI Success

Equally important to boldness is adopting a startup mentality, regardless of a company’s age or size. Startups excel in market exploration and swift adaptation to meet evolving customer needs. Although larger companies possess ample resources, they often move too slowly due to internal barriers and a lack of boldness, allowing startups to outpace them in reaching new markets.

OpenAI serves as an example of successfully combining a startup mentality with ample resources. They outperformed Google with ChatGPT, owing to their startup mindset, which enabled them to embrace opportunities without hesitation while benefiting from the support of Microsoft and other investors.

A startup mentality encompasses courage, flexibility, and an unwavering commitment to significant achievements. Startups prioritize value creation over predictability, disregarding established structures and biases to accomplish what needs to be done.

Amazon, the e-commerce giant, demonstrated a startup mentality when it embraced AI. Recognizing the potential of AI in creating a new web interface, Amazon developed the Echo speaker and Alexa digital assistant. This move went beyond facilitating online purchases; it opened new channels for value creation and job opportunities. Amazon continues to invest aggressively in AI, aiming to transform and improve customer experiences across various domains.

While companies cannot adopt these drivers overnight, they can gradually work towards a more committed and proactive stance regarding new possibilities. These drivers are not limited to organizational levels but can also guide individuals in their pursuit of purpose and career advancement. Employees can proactively invest in acquiring AI skills and experience, enhancing their value and contributing to the company’s success.

To prevent widespread unemployment, companies must break free from the discipline of solely focusing on reliable product delivery at low cost. Embracing the potential of AI requires a collective effort to expedite its integration. Humanity has always thrived by harnessing innovation rather than fearing it. We must extend the power of AI to every individual, collectively achieving new heights and shaping a better future.