The Nashville Chamber of Commerce has been hosting an annual gathering for local businesspeople since the 1800s, but the most recent gathering had a decidedly modern theme: artificial intelligence.
The aim was to clarify the technology for the chamber’s approximately 2,000 members, especially for small businesses.
“My sense is not that people are on guard,” says Ralph Schulz, the chairman of the House. “They are just unclear about its potential use.”
When generative AI entered the public consciousness in late 2022, it captured the imagination of companies and employees with its ability to answer questions, compose paragraphs, write code, and create images. Analysts predicted that the technology would transform the economy by fueling a productivity boom.
However, the impact has so far been limited. Although AI adoption is increasing, only about 5 percent of companies nationwide are using the technology Census Bureau business survey. Many economists predict it will be years before generative AI will measurably impact economic activity, but they say change is coming.
“To me, this is a five-year story, not five quarters,” said Philipp Carlsson-Szlezak, chief global economist at the Boston Consulting Group. “Am I going to see anything measurable over a five-year horizon? I think so.”
While some of the largest companies in Nashville and elsewhere are finding applications for AI and spending time and money developing it, many smaller companies are just beginning to experiment with the technology, if they use it at all.
“The best and the biggest are now working to implement it and get value from it, but the adoption curve is still very early,” Mr. Carlsson-Szlezak said.
Allison Giddens, co-president at Win-Tech, an aerospace manufacturing company with 41 employees in Kennesaw, Georgia, said she started using ChatGPT about six months ago for some operational tasks, such as writing emails to employees , analyzing data and preparing basic data. procedures for the company’s front office. A note on her computer monitor simply reads “ChatGPT” to remind her to use the technology.
“We need to make it a habit to actually use the tool,” she said.
But she faces obstacles in implementing it more widely and using it to make her business more efficient. Sometimes she thinks ChatGPT’s answers are incorrect. Cybersecurity is important in her industry, so she has to be careful about the information she puts into AI models. And she hasn’t yet found a place for the technology on the factory floor, where machinists make custom aluminum and titanium parts for the defense industry.
“There aren’t that many use cases for the workplace yet,” she said.
Technological innovations, including computers and the Internet, have historically taken many years or decades to spread through the economy and affect productivity and output. As American economist Robert Solow said in 1987, “You can see the computer age everywhere except in productivity statistics.”
Economists generally believe that the spread and adoption of generative AI will happen much faster, in part because information flows faster than in the past. For example, the consultancy firm EY-Parthenon concluded in a recent series on generative AI that the technology could undermine productivity within three to five years.
But there are some significant barriers, including hesitation around using the technology, legal and data security hurdles, regulatory friction, cost, and the need for more physical and technological infrastructure to support AI, including computing power, data centers and software.
“We’re still in the early stages of the revolution, in the sense that we’re already seeing significant investment in laying the foundations for that revolution,” said Gregory Daco, chief economist at EY-Parthenon. “But we haven’t yet seen the full extent of the benefits from a productivity standpoint, from an increased output standpoint, from an increased labor deployment standpoint.”
David Duncan, CEO of First Hospitality, a hotel management company in Chicago, said the company is working to ensure its internal financial data can be used by AI systems in the future.
“We are planning for the next generation of AI applications,” he said.
Mr. Duncan said he envisions using AI to analyze this data and create early drafts of reports, giving executives and general managers more freedom. The company, which has about 3,600 employees, also hopes to use AI to analyze weekly employee surveys over the course of a year to understand trends in the overall morale of its teams.
“I think we are in the early stages of a huge transformation in the way we process business ideas, strategy, data and results,” said Mr. Duncan.
According to research, AI adoption is greatest in information and professional services, including graphic design, accounting and legal services – traditionally white-collar jobs that are less threatened by automation.
The research shows that marketing is one of the most common applications for AI across businesses. Gusto, a payroll and benefits platform for small businesses, found it that of the companies founded last year that used generative AI, 76 percent did so for marketing.
Yet many economists believe that in the long run, few if any occupations will remain untouched by AI in some way. EY-Parthenon estimates that two-thirds of U.S. employment—more than 100 million jobs—are highly or moderately exposed to generative AI, meaning that these jobs could be transformed by the technology. The rest, typically jobs with more social and human interaction, are also likely to be affected, including tasks such as clerical work.
And the spread of AI seems to be gaining momentum. a working paper of the Centre for Economic Studiesusing data from the Census Bureau’s Business Formation Statistics, found a “substantial, discrete jump” in applications for AI-related businesses last year, which could fuel the technology’s spread. The paper also found that businesses that emerged from AI-related applications over the years had greater potential than others for creating jobs, salaries and revenue.
Summarizing this, “we believe there is potential for these AI startups to impact our economy in the near future,” says Can Dogan, associate professor of economics at Radford University in Virginia and one of the authors of the article. .
“In general, existing companies need to figure out what they can do with these technologies,” he added. “I think that’s the key to broader adoption.”
Chris Jones, the founder of Planting Seeds Academic Solutions, a teaching and tutoring company with nine employees and 100 to 150 independent contractors, is among those trying to figure out how to use emerging AI technologies. Jones, based in Dallas, said he became interested in using AI at his company in 2021 or 2022, but “never had the full focus on how to incorporate AI into our business.”
He hopes to soon bring in a consultant to show the company how AI can be used for sales, administrative tasks and program operations such as curriculum creation. He’s aware of the potential impact on his employees’ jobs, he said, but he’s also clear-eyed about the changing economic landscape.
“As a company I have to keep my head above water because the competition is real,” said Mr Jones.
In Nashville, chamber chairman Bob Higgins is a driving force in pushing small and medium-sized businesses to embrace AI. He has spoken to other business leaders, held webinars and collaborated with a professor from Vanderbilt University who is an expert in generative AI.
Mr Higgins also tries to lead by example. At Barge Design Solutions, an engineering and architecture services company where he is the CEO, his human resources team used generative AI to create job openings that yielded more qualified candidates for hard-to-fill positions. He also uses the technology as a “thought partner” to prepare for meetings and create agendas.
The ultimate goal, he said, is “to make Nashville a GenAI city.”
“If you’re afraid of it,” he said, “I think you’re going to be left out.”
