Following substantial developments and improvements to large language models (LLMs), Generative AI has surged to the forefront of the business world, capturing the imaginations of business leaders and sparking strategic conversations about harnessing this technology to drive growth and competitive advantage. McKinsey’s research estimates that Generative AI could add the equivalent of $2.6 trillion to $4.4 trillion USD to the global economy annually, with 75% of this value delivered across the areas of customer operations, marketing and sales, software engineering, and R&D. To put this into perspective, the UK’s entire GDP for 2022 was just over approximately $3 trillion USD (£2.27 trillion GBP).
Other experts including the World Economic Forum, BCG, PwC, and Gartner have championed Generative AI and its potential to reshape business as we know it. Organisations who have already adopted are reporting benefits to their productivity and effectiveness. But where are the biggest gains to be found? Our research has identified the following key areas as having the most potential for reaping Generative AI’s benefits:
That said, this may come with a caveat. A study conducted by BCG with the support of a group of scholars from Harvard Business School, MIT Sloan School of Management, the Wharton School at the University of Pennsylvania, and the University of Warwick found that when using Generative AI for tasks involving ideation and content creation, around 90% of participants improved their performance on a level that was 40% higher than that of those working on the same task without AI. But when using Generative AI for tasks related to business problem solving, participants performed 23% worse than those doing the task without AI. These results reinforce the idea that both Generative AI and human intelligence have their own areas of value creation, but the study also found that there are risks to relying on Generative AI for creative tasks long term. For instance, Generative AI enhanced creative performance but produced outputs that were fairly repetitive, with the diversity of ideas among participants who used AI 41% lower compared with the group that did not use technology. Over time, it is feared that over-reliance on Generative AI will stifle creativity, with 70% of participants sharing this belief.
To combat these adverse effects and truly reap the benefits of Generative AI for creativity, innovation, and strategy, senior leaders need to guide their organisations towards AI integration that enhances performance rather than stifling it. The challenge will be implementing Generative AI without creating an overreliance on it and building successful partnerships between man and machine. Understand where AI thrives and where humans have the advantage, and design activities around those core competencies.
In addition to benefitting from Generative AI in their own continuous learning activities, senior executives can expect to see productivity gains when training, reskilling, and onboarding their people. Generative AI can automate learning and development activities to equip teams with necessary skills quicker and more effectively through adaptive learning. Tailored learning experiences are more engaging and interactive, with the knowledge delivered more likely to be retained. This will result in time and cost savings for the business.
This is only just a flavour of what Generative AI can and will do for businesses and their leadership. As this technology evolves and becomes more advanced, it is likely that we will see more creative and strategic use cases arise, with new gains in efficiency and understanding as a result. The key thing to keep in mind, however, is that Generative AI is not a fix-all. There must be a balance between human capabilities and artificial intelligence to maximise the impact and value-add of both parties in the workforce. Senior executives will have a critical role to play in structuring how and why their organisation uses this and other technologies moving forward.