by Paul Disselkoen, Senior Associate, Public Affairs & Strategic Research
There has been a tremendous rise in the development and mainstream adoption of Artificial Intelligence (AI) tools in the last couple of years. While AI is already a part of our lives, from vaccine development to voice assistants and traffic maps, the conscious use of AI tools in everyday life is a relatively new phenomenon. Specifically, generative AI tools, such as ChatGPT, have become central to conversations from the boardroom to backyard barbeques. Just two months after launching, the chatbot gained 100 million users, a meteoric rise that is many times faster than Instagram and TikTok1.
Experts believe that this is only the beginning as educators, corporations and investors all shift their attention to new generative AI tools and use cases for everyday life. A recent report from PwC estimated that AI could boost the global economy by $15.7 trillion by 2030 and provide a 26% GDP increase for local economies2.
Of course, the real driver of growth for local economies are small businesses. They create jobs and drive economic activity that fosters healthier communities. As AI adoption continues to grow, it will be critical for entrepreneurs to leverage these tools to optimize costs, develop new strategies and save time, perhaps the most valuable commodity for busy small business owners. In the past year, we have seen record numbers of small businesses being created3. If they hope to survive and remain competitive with larger businesses, integration of AI will be a requirement.
79% of small business owners that have adopted AI tools to help with marketing and sales strategies reported an increase in revenue.
In 2022, large businesses were 60% more likely to be integrating AI tools than smaller companies4. However, according to a recent survey, 57% of small business owners are “eager” to learn more about how AI can be leveraged to optimize their business. The highest reported impact of AI on revenue is optimization of service operations, marketing and sales5. IBM reports that using chatbots can reduce customer service costs by as much as 30%. And 79% of small business owners that have adopted AI tools to help with marketing and sales strategies reported an increase in revenue6.
It is also important for larger corporations that serve small business customers to make it easy on entrepreneurs to leverage a trusted AI tool. For example, PayPal recently launched My AI Planner (M.A.P.) a new AI-powered business tool that leverages Natural Language Processing and Intelligent Document Processing to surface insights and help SMBs get actionable advice tailored to their business. These tools can help the smallest businesses develop a growth strategy to compete on a global scale.
AI tools can be leveraged for a range of business operations for small business owners that are doing multiple jobs at once. Besides the revenue-generating use cases for driving marketing and sales, generative AI can assist in email and social copy, personalized experiences for consumers, and cost savings. Building trust in these tools and developing a thoughtful regulatory approach to ensure consumer protection is an important consideration for both the public and private sectors. Additionally, ensuring that one is not relying solely on AI assistance and still doing due diligence is a responsible approach.
Inclusivity will be key to building trust around AI.
Inclusivity will be key to building trust around AI. In order to be inclusive, AI needs to be about to learn from unbiased data sets. One roadblock is the engineers/designers etc of AI are predominantly male and lacking in diversity (~78% of global professionals with AI skills are male - WEF, 2018), which has led to faulty/biased products. However, with interest rising in AI, there is potential for increased diversity in the talent pool and opportunities to explore new applications of AI that could be beneficial to improving inclusivity and tackling bias.
These trends will help to instill trust within marginalized communities, which will be key in driving adoption. If not, these small business owners will be left behind in this innovation and create an additional barrier to success7.
Given how high the stakes are, it is encouraging to see the priority that this is being given within the White House and Congress.
Given how high the stakes are, it is encouraging to see the priority that this is being given within the White House and Congress. Senator Schumer (D-NY) recently announced the SAFE Innovation Framework outlining potential bipartisan legislation which would result in new federal regulations. The White House and relevant federal agencies continue to build on the AI Bill of Rights and the8, and the NIST AI Risk Management Framework9. It will continue to be important that these stakeholders work with industry experts and international regulators, such as those in the EU that have developed their own framework, to ensure comprehensive and responsible regulations are created.
The uncertain state of the economy has created difficulties for small businesses as they try to manage cashflow, acquire capital and grow sales. Persistent inflation and rising interest rates as well as the recent turmoil in the banking sector have exacerbated challenges faced by small business owners. A recent survey by PayPal found that 54% of small business owners don’t know how to offset increased costs without passing them on to consumers and 81% feel inflation will make it impossible to reduce business expenses this year.10 Integrating AI tools to optimize operations, reduce costs and boost sales is a critical step in remaining competitive by keeping pace with evolving technology.
1https://time.com/6253615/chatgpt-fastest-growing/
2https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html
3https://eig.org/2022-business-formation/?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmacro&stream=business
4https://www.ibm.com/downloads/cas/GVAGA3JP#:~:text=54%25%20Financial%20services%20Global%20average,not%20pursuing%20AI%20at%20all.
5https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai-in-2022-and-a-half-decade-in-review
6https://thecurrent.media/ai-in-ecommerce
7https://aiindex.stanford.edu/wp-content/uploads/2021/03/2021-AI-Index-Report-_Chapter-6.pdf
8https://www.politico.com/news/2023/06/20/biden-ai-regulatory-strategy-00102753
9https://www.nist.gov/news-events/news/2023/01/nist-risk-management-framework-aims-improve-trustworthiness-artificial
102023 survey of PayPal small business owners