The Nashville Area Chamber of Commerce has convened an annual gathering of local business leaders since the 1800s, but the most recent gathering had a decidedly modern theme: artificial intelligence.
The goal was to demystify the technology for the chamber’s roughly 2,000 members, especially its small businesses.
“My sense is not that people are wary,” said Ralph Schultz, the chamber’s chief executive. “It’s just unclear as to its potential use for them.”
When genetic AI emerged into the public consciousness in late 2022, it captured the imagination of businesses and workers with its ability to answer questions, compose paragraphs, write code, and create images. Analysts predicted that the technology would transform the economy leading to an explosion in productivity.
However, so far, the impact has been limited. Although AI adoption is growing, only about 5 percent of companies nationwide are using the technology, according to a survey of businesses by the Census Bureau. Many economists predict that genetic AI is years away from measurably affecting economic activity — but they say change is coming.
“For me, this is a story of five years, not five quarters,” said Philipp Carlsson-Szlezak, global chief economist at Boston Consulting Group. “In a five-year horizon, will I see something measurable? I think so.”
While some of the biggest companies, in Nashville and elsewhere, are finding uses for AI — and spending money and time to develop more — many smaller companies are just getting started with the technology, if at all.
“The best and the biggest are actually working on implementing it and getting value out of it now, but the adoption curve is very early,” said Mr. Carlsson-Szlezak.
Allison Giddens, co-president of Win-Tech, a 41-employee aerospace manufacturing company in Kennesaw, Ga., said she started using ChatGPT about six months ago for some business tasks, such as writing emails to employees, analyzing data and the drafting of basic procedures for the company’s front office. A note taped to her computer screen simply says “ChatGPT” to remind her to use the technology.
“We have to get used to actually using the tool,” he said.
But she faces obstacles in applying it more widely and using it to make her company more efficient. Sometimes it finds ChatGPT’s responses off base. Cybersecurity is important in her industry, so she needs to be careful about what information she feeds into AI models. And it hasn’t found a place for the technology on the factory floor, where engineers make custom aluminum and titanium parts for the defense industry.
“There aren’t many use cases for the shop floor yet,” he 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. American economist Robert Solow said in 1987: “You can see the computer age everywhere except in productivity statistics.”
Economists generally believe that the diffusion and adoption of genetic AI will happen much faster, in part because information flows faster than in the past. Consulting firm EY-Parthenon, for example, concluded in a recent series on genetic artificial intelligence that the technology could contribute to productivity in three to five years.
However, there are some significant barriers, including hesitancy about 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 are still in the early stages of the revolution as we are beginning to see significant investment to create the foundations for this revolution,” said Gregory Daco, chief economist at EY-Parthenon. “But we haven’t yet seen the full extent of the benefits in terms of productivity, in terms of greater output, in terms of greater workforce development.”
David Duncan, chief executive of First Hospitality, a hotel management company in Chicago, said the company is working to ensure that its internal financial data could be used by AI systems in the future.
“We’re designing for the next generation of AI applications,” he said.
Mr. Duncan said he envisioned using artificial intelligence to analyze that data and create initial draft reports, freeing up executives and general managers. The company, with about 3,600 employees, also hopes to leverage artificial intelligence to analyze weekly employee surveys over the course of a year to glean information about trends in the overall morale of their teams.
“I believe we are in the early stages of a massive transformation in how we process business ideas, strategy, data and results,” Mr. Duncan said.
According to research, the use of artificial intelligence is greatest in information and professional services, which include graphic design, accounting and legal services — traditionally jobs less threatened by automation.
Research shows that marketing is among the most common uses of AI across businesses. Gusto, a payroll and benefits platform for small businesses, found that among businesses created last year that used genetic AI, 76 percent did so for marketing.
However, many economists believe that in the long run, few or no occupations will be unaffected by AI in some way. EY-Parthenon estimated that two-thirds of US employment — more than 100 million jobs — are highly or moderately exposed to genetic AI, meaning those jobs could be changed by the technology. The rest, usually jobs with more social and human interaction, are likely to be affected as well, through tasks such as administrative work.
And AI diffusion seems to be gaining steam. A working paper from the Center for Economic Research, using data from the Census Bureau’s Entrepreneurship Statistics, found a “significant, distinct jump” last year in applications for AI-related businesses that could fuel the technology’s spread. The paper also showed that businesses stemming from AI-related applications over the years have had greater potential than others for job creation, payroll and revenue.
Putting this together, “we think there is a possibility that these AI startups will 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 businesses will have to discover what they can do with these technologies,” he added. “I think that’s the key to wider adoption.”
Chris Jones, founder of Planting Seeds Academic Solutions, an education and teaching business with nine employees and 100 to 150 independent contractors, is among those trying to figure out how to use emerging AI technologies. Mr. Jones, who is based in Dallas, said he became interested in using AI at his company in 2021 or 2022, but that he “never had the full focus on identifying how AI could be integrated into our business”.
He hopes to hire a consultant soon to show the company how to use AI for sales, administrative tasks and program functions such as curriculum creation. He is aware of the potential impact on his employees’ jobs, he said, but clearly about the changing economic landscape.
“As a business, I have to stay alive because the competition is real,” Mr Jones said.
In Nashville, a driving force pushing small and medium-sized companies to embrace artificial intelligence is chamber president Bob Higgins. He talks to other business leaders, holds webinars, and collaborates with a Vanderbilt University professor who is an expert in genetic artificial intelligence
Mr Higgins also tries to lead by example. At Barge Design Solutions, an engineering and architecture services firm where he is managing director, his HR team used genetic AI to help create job postings that yielded more qualified applicants for hard-to-fill positions. She also uses technology as a “thinking partner” to prepare for meetings and create agendas.
The ultimate goal, he said, is “to help make Nashville that GenAI city.”
“If you live in fear of it,” he said, “I think you’ll stay out.”
