Navigating the AI Tsunami: who's at risk?

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It’s a given that Generative AI has, and will continue, to disrupt how we work, live and organize ourselves. In the context of business, some industries will be impacted far more severely and far sooner than others. What I am interested in exploring today is how these industries might be disrupted and what the future might hold for them. Let’s dive in!

Which industries are most at risk?

First things first, we should get specific about which industries will be impacted the most and the quickest. One way to tell is to look at the jobs with the highest exposure to Generative AI today. The higher the exposure, the higher the likelihood of these jobs being automated. Today, Generative AI applications are already capable of:

• generating text and serving as Chatbots

• generating images, audio, music and videos

• summarizing, refining content style and quality

• retrieving and presenting large amounts of information almost instantaneously

• interact with other software to execute tasks

• creating, managing and monitoring AI agents to execute some combination of the above tasks

Given the above, jobs that are most at risk are white collar ones that currently provide some combination of the above services. The chart below gives us a useful snapshot of what these are:

The industries most at risk are obvious. Think professional services, financial services, marketing and any other industry that relies on providing information-heavy services to deliver value to customers today. It is reasonable to assume that some combination of the services offered by these industries will become increasingly commoditized over time and trend towards zero cost. As Generative AI capabilities continue to develop rapidly over time, more and more jobs and services offered by these industries will become commoditized, prompting firms to search for newer ways to differentiate themselves from their peers with higher value offerings.

Differentiation via hyper-personalization

What might those higher-value offerings be? These will vary based on the industry in focus, however, it’s safe to say we can expect a trend towards higher-touch offerings for customers that focus more on the service experience, calling for more nuance, sensitivity and expertise at resolving complexities. For example:

• In the context of financial services: We may see a shift to specialized wealth management with financial institutions increasingly focused on providing highly specialized services such as bespoke wealth preservation strategies, complex estate planning solutions, and tailored risk management for corporations.

• In the context of professional services (e.g., Legal and Consulting): We may see legal and consulting firms focus on providing high-value advisory services such as complex litigation, strategic legal counselling, organizational transformation, M&As and innovation strategy. These firms will place a special emphasis on client relationships and aim to differentiate themselves through their individual experience and ability to understand clients' unique challenges and provide solutions that go beyond what AI can offer.

• In the context of marketing: Marketers will use AI for advanced consumer behavior analysis and hyper-personalization, enabling them to create highly targeted campaigns. Building authentic connections will be paramount, so they will find ways to penetrate an increasingly noisy arena to deliver experiences that resonate on a deeper level.

As these industries evolve to offer increasingly personalized experiences, service providers will seek out opportunities to earn their customers trust, become ever more integrated into their lives and encourage them to become increasingly dependent on them. While the size of the pie may decrease over time due to the commoditization of certain services, its overall value may remain substantial due to a growing focus on specialization.

So how do you get ‘there’ from here?

This useful article from the Harvard Business Review offers great guidance when it comes to thinking about how one might rely on Generative AI to derive competitive advantages. The authors suggest three ways for how one might implement AI:

• Option 1: Adopt off-the-shelf publicly available tools

• Option 2: Customize AI tools 

• Option 3: Seek out opportunities to create automatic and continuous feedback loops

While some of these options may be more relevant for some firms than others, the authors do advise that if the threat of disruption is high, businesses should look to move as quickly as possible to Options 2 and 3. Option 3 in particular aligns well with the point above about a trend towards hyper-personalized services. Having access to the relevant data about your customers and internal capabilities, will go long way in helping you learn from and better understand them, including what the optimal client experience might look like.

For the industries most at-risk, embracing Generative AI to stay relevant is a given. Since finding the right answers always come down to asking good questions, let me close off today’s piece with one to help you get started on your journey:

Thanks for reading,

Hardesh.

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