Artificial Intelligence and Business Strategy
In collaboration withBCG
If you were a brilliant artificial intelligence (AI) expert just graduating from a doctoral program at a prestigious school, would you pursue that startup you’ve been thinking about, join a company that wants to build cutting-edge AI applications, or use your expertise to help scientists in other fields conduct basic research?
Admittedly, this is a bit of a silly question. The opportunities presented by the first two options are outrageous, and growing more outrageous by the day. With more than 2,000 startups absorbing much of the top-tier AI talent — estimated by some to be just 10,000 individuals worldwide — the combination of great scarcity and even greater demand for talent is driving salaries through industry roofs. Some businesses offer seven-figure compensation packages for elite AI talent.
Plus, it’s never been a better time to launch an AI startup. Investment in AI-focused ventures has grown 1,800% in just six years, from $282 million in 2011 to more than $5 billion in 2016, according to CB Insights.
The sanity behind these numbers comes, in part, from the fact that companies expect AI to allow them to move into new business segments or to maintain their competitive advantage in their industry. Driving this expectation is the idea that AI will enable them to dramatically improve the efficiency or effectiveness of their operations and offerings.
Despite the lucrative financial opportunities in these first two career paths, the alternative choice — to collaborate with scientists in other fields — may be more pivotal to how nations and businesses compete over the long term.
Conventional wisdom, based on no small amount of research, holds that AI-driven automation will create technological unemployment in a variety of sectors in the next five to 10 years. Optimists believe that this won’t be a big deal for the labor sector as a whole because corporate adoption of AI (and other digital trends) will create new industries and new job categories that will replace whatever AI-driven losses occur in labor sectors of the current economy. But there are two open questions about this hypothesis:
- How will these new industries be created?
- How soon will they come, if they come at all?
The creation of new industries frequently depends on dramatic advances in science and technology that can take decades to move from discovery to commercial application to new industry.