Bullish but Cautionary: A Balanced Way to Approach the Impact of AI

The head of the International Monetary Fund (IMF), Kristalina Georgieva, is bullish on the potential of artificial intelligence (AI), but cautionary, too.

In a blog post timed to coincide with last month’s World Economic Forum in Davos, Switzerland, Georgieva wrote that the technology could “jumpstart productivity, boost global growth and raise incomes,” but equally could “replace jobs and deepen inequality.” “The AI era is upon us,” wrote Georgieva, “and it is still within our power to ensure it brings prosperity for all.”

Business and nonprofit leaders in the U.S. may not feel so weighty a responsibility in assessing the global impact of AI, but we must realize AI’s power to impact our organizations, our local economies, our sectors, and our nation.

Last spring, four key federal government agencies, among them the Consumer Finance Protection Bureau, released a joint statement outlining a commitment to enforce their respective laws and regulations when it comes to AI. More recently, following the Biden Administration’s Executive Order on AI, the Office of Management and Budget issued a directive that will drive government standards as a user and purchaser of AI products. 

The proper use of AI is a serious matter and there are several steps for us to take, the first being education, assessment, policy development, governance, and process for ourselves and our teams. While that may seem overwhelming, there are plenty of resources available. 

Take recruiting and hiring, for example. You may not realize it, but AI is likely involved in your recruiting and hiring process, either overtly through your use of various AI tools for sorting candidates, or indirectly through AI’s role in “feeding” newly posted career opportunities to job seekers. Six months ago, I wrote about our project to develop principles and protocols for the use of AI in recruiting and hiring, and today those principles and protocols are more necessary than ever.

A new year also brings about new budgets and financial forecasts. Your organization is probably using an enterprise software system for your budgeting and forecasting and that system likely employs machine learning/AI in its data analysis. Here again there is an opportunity not to replace members of your finance team, but to embrace AI and enable them to produce more accurate, efficient, and realistic financial predictions.

In these areas there is more opportunity than challenge, which should lead to more hope than fear.

But what about the actual product or service that you offer to your customers and stakeholders? And how about the supply chain that enables you to develop and present those products and services? 

AI in product development does not have to be mysterious. If your organization has been conducting market research to learn what current or potential customers might want, AI can augment that process, making it “smarter” and allowing your product development leaders to layer their experience and insights on top of a richer recipe of data and analytics.

Your supply chain can also benefit from AI. After all, supply chains improve when they are measured carefully, analyzed deeply, and adjusted accordingly. Your process of measurement has probably included AI for years and you either did not know it or did not see a need to think about it. Deep analysis has also benefited greatly from AI injections and, while you probably knew that instinctually, you probably also have not spent much time wrestling with how to maximize the impact of AI.

Beyond the four walls of your own business or nonprofit organization, there are other aspects of AI that you should consider in the context of competitors, peers, and customers. Be truthful in your claims about your use of and your commitments to AI and keep a watchful eye on the AI claims and commitments of your competitors as well.

Government agencies are taking steps to ensure that use of AI follows the law and current regulatory frameworks. Congress has been examining what new laws – or changes to existing law – need to be made to provide the right level of AI governance while not hampering U.S.-led innovation.

As a December 2023 report from the Federal Trade Commission (FTC) stated, “. . .the FTC will continue to closely monitor generative AI industry developments and will remain vigilant and ready to use its law enforcement and policy tools to foster fair competition, protect consumers, and help ensure that the public benefits from this transformative technology.”   

This vigilance applies in several different contexts. At BBB National Programs, we are focusing on, among others, the FTC’s enforcement work in misleading advertising by AI, organizational privacy commitments, and copyright issues.

We are also looking closely at recent developments in litigation surrounding AI software and alleged unconscious bias and AI and consumer finance products.

Until ChatGPT burst onto the scene, the concept of generative AI seemed on the business horizon and less relevant to many. But now the “transformative technology” of generative AI is here to stay and it is incumbent for every business and nonprofit leader to assess what it may mean for every aspect of an organization’s operations. It is not just a “back-office” concern; even your frontline workers will have to become AI-savvy and AI-co-dependent.

The IMF’s leader, Kristalina Georgieva, is bullish on AI, and you should be, too. She is also cautionary about AI, and you should be as well. There is a balance to be struck and, as business and nonprofit leaders, it is within our power to harness the power of AI for good in our organizations.

Originally published on Forbes.