STRATEGICALLY NAVIGATING THE AI TERRAIN: AN IMPERATIVE FOR LEADERS IN BUSINESS (Writer: Tunde-Success Osideko)
The rise of Artificial Intelligence (AI) has now reached a point where distinguishing between exaggeration, misconceptions, and tangible progress presents a significant challenge.
My introduction to the realm of AI occurred during my MBA at Warwick Business School, particularly through a course on Data Analytics for Decision Making. This experience was captivating and motivated me to explore the diverse impact of digital technologies on a global scale.
Defining AI is comparable to capturing the wind, yet researchers like Duan et al. (2019) encapsulate it as a machine’s ability to learn, adapt to new inputs, and perform tasks akin to human intelligence.
AI, now recognized as a general-purpose technology, shares transformative characteristics with historical technological advancements such as the steam engine, electricity, and the railroad.
The recent surge in AI’s popularity is largely credited to breakthroughs in Machine Learning, particularly its applications in text and speech analysis (Charlwood & Guenole, 2022; Jaiswal et al., 2021).
As illustrated by the example of ChatGPT (Budhwar et al., 2023), revolutionary innovations have propelled AI into the mainstream, capturing global attention.
Breaking down the intricate concept of AI into three fundamental components—data, algorithms, and the cloud—provides a simplistic understanding and profound insight into its mechanisms.
In analogy to meal preparation, data, akin to ingredients, manifests in various forms such as text, numbers, images, and videos. Algorithms, including Machine Learning, Natural Language Processing (NLP), and Computer Vision, act as the recipe, guiding the machine’s actions. The cloud, likened to the energy needed for cooking, supplies the computational power for data processing, ensuring scalability, cost efficiency, and security.
AI encompasses three key capabilities: predicting the future based on historical patterns, making recommendations, and personalizing interactions.
Despite skepticism about AI’s potential negative impacts, including workforce disruption, unethical algorithm design, and social inequality concerns, it’s crucial to note numerous AI use cases today, such as virtual assistants, fraud detection, personalization, and self-driving cars.
The disruptive impact of AI on future work and industries is not speculative but substantiated by research (Bughin et al., 2017; Østerlund et al., 2021). Its role in enhancing competitiveness underscores the necessity of integrating AI into business operations (Haefner et al., 2021). Large enterprises, as pioneers in AI adoption, stress its strategic significance in shaping business strategy (Acemoglu & Restrepo, 2020; Ransbotham et al., 2017).
AI’s transformative nature provides businesses with a significant competitive advantage, heralding an era of innovation (von Krogh, Roberson, and Gruber, 2023; Rust & Huang, 2014).
The contemporary world operates within the Fourth Industrial Revolution, also known as Industry 4.0, characterized by technological evolution.
The change AI brings is not incremental but transformational, marking the disruptive nature of the technology. Virtually everything is poised to be impacted by digital technology, making technology an intricate and essential part of our lives, work, and interactions with stakeholders (Brunetti et al., 2020).
Businesses should prioritize AI because, according to a PwC report, it could contribute $15.7 trillion to global economies and boost GDP in local economies by up to 26% by 2030. Framing AI conversations as essential to the business or economy is strategic, making it a key agenda item at every board meeting. Developing an AI strategy should be the highest priority for CEOs and business executives.
According to a Deloitte Centre for Integrated Research report, only digital businesses are adaptable in the 21st century (Nanda et al., 2021). Therefore, investing in digital technology is no longer a luxury but a critical business imperative.
Undoubtedly, technology adoption brings numerous advantages, including improved efficiency, enhanced agility, and value creation for all stakeholders. Accenture Research even declared that all companies are technology businesses (Accenture Research, 2022; Buchanan et al., 2016).
In conclusion, the arrival of AI is not a futuristic concept but an integral part of our present reality. Entrepreneurs and researchers must recognize and actively embrace AI’s strategic imperative to remain adaptive, competitive, and relevant in the rapidly evolving digital landscape. Failing to do so is akin to entering a gunfight with a knife or maintaining a typewriter mindset in a world driven by algorithms and data.
News Source: Techeconomy
