The Nashville Area Chamber of Commerce has hosted an annual gathering of local business leaders since the 1800s, but the most recent meeting had a decidedly modern theme: artificial intelligence.
The goal was to demystify the technology for the chamber’s approximately 2,000 members, particularly small businesses.
“In my opinion, people are not suspicious,” said Ralph Schulz, executive director of the chamber. “They’re just not sure whether it could be useful to them.”
As generative AI entered the public consciousness in late 2022, it captured the imagination of companies and workers with its ability to answer questions, compose paragraphs, write code, and create images. Analysts predicted the technology would transform the economy by triggering a productivity boom.
However, so far the impact has been limited. Although adoption of AI is increasing, only about 5 percent of companies nationwide are using the technology, according to a Census Bureau business survey. Many economists predict that generative AI is still years away from having a measurable impact on economic activity – but they say change is coming.
“For me, this is a story of five years, not five quarters,” said Philipp Carlsson-Szlezak, chief global economist at Boston Consulting Group. “Will I see anything measurable over a five-year period? I think so.”
While some of the largest companies in Nashville and elsewhere are finding uses for AI — and devoting money and time to further development — many smaller companies are just beginning to explore the technology, if they use it at all.
“The best and biggest are currently working on implementing it and taking advantage of it, but the adoption curve is still very early,” Carlsson-Szlezak said.
Allison Giddens, a co-president at Win-Tech, a 41-employee aerospace company in Kennesaw, Georgia, said she started using ChatGPT about six months ago for some operational tasks, such as writing emails. Emailing employees, analyzing data, and designing basic task procedures for the company’s front office. A note taped to her computer monitor simply says “ChatGPT” to remind her to use the technology.
“We need to get used to actually using the tool,” she said.
However, she encounters hurdles when it comes to implementing it more comprehensively and thus making her company more efficient. Sometimes she finds ChatGPT answers wrong. Cybersecurity is important in her industry, so she needs to be careful about the information she feeds into AI models. And it hasn’t 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 many use cases for the workshop yet,” she said.
Technological innovations, including computers and the Internet, have historically taken many years or decades to spread through the economy and impact productivity and production. American economist Robert Solow said in 1987: “You can see the computer age everywhere except in the productivity statistics.”
Economists generally expect the spread and adoption of generative AI to occur much faster, in part because the flow of information is faster than in the past. For example, in a recent series on generative AI, consulting firm EY-Parthenon concluded that the technology could increase productivity in three to five years.
However, there are some significant obstacles, including reluctance to use the technology, legal and data security hurdles, regulatory hurdles, costs and the need for more physical and technological infrastructure to support AI, including computing power, data centers and software.
“We are still in the early stages of the revolution as we have begun to make significant investments in laying the foundations for this revolution,” said Gregory Daco, chief economist at EY-Parthenon. “But we have not yet seen the full extent of the benefits from the perspective of productivity, greater output and greater work effort.”
David Duncan, chief executive 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 the next generation of AI applications,” he said.
Mr. Duncan said he envisions using AI to analyze that data and produce initial draft reports, freeing up executives and chief executives. The company, which has about 3,600 employees, also hopes to use AI to analyze weekly surveys of workers over the course of a year to gain insight into trends in their teams’ overall morale.
“I think we are in the early stages of a massive transformation in the way we process business ideas, strategies, data and results,” Mr Duncan said.
According to surveys, AI use is greatest in information and professional services, which include graphic design, accounting and legal services – traditionally office jobs that are less threatened by automation.
The research shows that marketing is one of the most common uses of AI in all companies. Gusto, a payroll and benefits platform for small businesses, found that 76 percent of companies founded last year that used generative AI did so for marketing purposes.
Still, many economists believe that in the long run, few if any jobs will remain unaffected by AI in any way. EY-Parthenon estimates that two-thirds of U.S. jobs – more than 100 million jobs – are heavily or moderately impacted by generative AI, meaning these jobs could be transformed by the technology. The rest, typically jobs with more social and human interaction, are also likely to be affected by tasks such as administrative work.
And the spread of AI appears to be gaining momentum. A Center for Economic Studies working paper using data from the Census Bureau’s Business Formation Statistics found a “significant, discrete increase” in applications for AI-related businesses last year that could spur the technology’s adoption. The paper also showed that companies that have adopted AI-related applications over the years had greater potential for job creation, payroll and revenue than others.
In summary, “We believe these AI startups have the potential to have an impact on our economy in the near future,” said Can Dogan, an associate professor of economics at Radford University in Virginia and one of the authors of the paper.
“In general, existing companies should figure out what they can do with these technologies,” he added. “I think that’s the key to broader acceptance.”
Chris Jones, the founder of Planting Seeds Academic Solutions, an education and tutoring company with nine employees and 100 to 150 independent contractors, is among those trying to figure out how to harness new AI technologies. Mr. Jones, who is based in Dallas, said he became interested in using AI in his company in 2021 or 2022, but that he “never had a full focus on figuring out how AI could be integrated into our company.”
He hopes to soon hire a consultant to show the company how to use AI for sales, administrative tasks and program operations such as curriculum creation. He said he is aware of the potential impact on his employees’ jobs, but is clear-eyed about the changing economic landscape.
“As a business I need to stay afloat because competition is real,” Mr Jones said.
In Nashville, Chamber President Bob Higgins is a driving force in getting small and medium-sized businesses to adopt AI. He has spoken to other business leaders, held webinars and worked with a Vanderbilt University professor who is an expert in generative AI
Mr. Higgins also tries to lead by example. At Barge Design Solutions, an engineering and architectural services firm where he is CEO, his human resources team has used generative AI to create job postings that produce more qualified applicants for hard-to-fill positions. He also uses technology as a “thought partner” to prepare for meetings and create agendas.
The ultimate goal is to “make Nashville this GenAI city,” he said.
“If you live in fear of it,” he said, “then I think you’re left out.”
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2024-06-17 09:03:13
www.nytimes.com
