Table of Contents
- How Will Artificial Intelligence Change Corporate Strategy and Future Career Paths?
- Recommendation
- Take-Aways
- Summary
- Recent AI developments are changing how industries are pursuing innovation across three primary dimensions.
- AI has transformed the idea-generation process but is still weak when evaluating opportunities.
- Companies can integrate AI into their business models by focusing on customer journeys and pain points.
- People must innovate their career paths.
- About the Speakers
How Will Artificial Intelligence Change Corporate Strategy and Future Career Paths?
Discover how artificial intelligence impacts innovation management. Explore how businesses use AI for idea generation, strategic planning, and career adaptation.
Continue reading to learn practical ways to integrate AI into your business model, solve customer pain points, and successfully adapt your career path for the future.
Recommendation
In this episode of the Knowledge at Wharton podcast, host Eric Bradlow interviews innovation management experts Christian Terwiesch and Valery Yakubovich. Their discussion offers valuable insights into AI’s present strengths and weaknesses in the realm of innovation management and how it is reshaping business strategy and people’s career paths. Learn how businesses are using AI to address customer pain points and streamline their operations, and uncover the challenges and opportunities the rapidly evolving technological landscape presents for companies and individual workers.
Take-Aways
- Recent AI developments are changing how industries are pursuing innovation across three primary dimensions.
- AI has transformed the idea-generation process but is still weak when evaluating opportunities.
- Companies can integrate AI into their business models by focusing on customer journeys and pain points.
- People must innovate their career paths.
Summary
Recent AI developments are changing how industries are pursuing innovation across three primary dimensions.
First, AI now aids in the initial stages of innovation, such as idea generation and venture launching, by making processes like market research and prototyping more efficient and less expensive. Second, in larger organizations, AI plays a crucial role in managing and fueling the idea pipeline, enhancing the continuous flow of innovation. Third, AI assists managers in strategic planning by helping to envision future scenarios and potential disruptions to the status quo that people might not consider otherwise.
AI has transformed the idea-generation process but is still weak when evaluating opportunities.
AI excels at generating a wide variety of ideas, including “polarizing” innovations – a feat most people would not have believed possible just a couple of years ago. Famed economist Joseph Schumpeter defined creativity as the “recombination of existing ideas.” Considering AI’s current capabilities from this angle, it is less surprising that AI has become such a creative force: The models’ ability to recombine vast amounts of data leads to more diverse and creative outputs. AI-generated ideas often exhibit higher “payoff variance” – that is, ideas where the risk is higher, but so is the potential reward – compared to those generated by humans. And the cost of generating all these ideas is low.
“Coming up with ideas is – I don’t want to say ‘easy,’ but it’s something that humans can do, and now AI can do.” (Christian Terwiesch)
AI is less helpful in the selection phase of innovation. Its ability to predict the quality and success of the available ideas is still developing. Human judgment, thus, remains essential in this arena. AI’s effectiveness in evaluating ideas is expected to improve. Training AI models on more varied inputs will likely make them more capable of accurately forecasting the market success of innovations in the future.
Companies can integrate AI into their business models by focusing on customer journeys and pain points.
Rather than indiscriminately applying AI across all operations, businesses should identify specific areas where AI can provide solutions. For instance, a company that partners with the Mack Institute is using AI to “smarten” its supply chain management. Another is using AI for software testing – a vital element in innovation management. One start-up has used AI to automate patent writing – a task that, for humans, is quite labor-intensive.
“What are the customer needs? Where are the pain points? Identify those and [ask,] ‘Where could AI be the right solution?’” (Valery Yakubovich)
Other businesses are approaching AI from another angle: They’re now offering security and privacy tools and services to help companies secure their AI models and the company and customer data that feeds them.
People must innovate their career paths.
Students and those already employed in the corporate world should stay abreast of AI developments and consistently evaluate how their skills fit with those developments. Bear in mind that any given job includes a collection of tasks. Some are easy to automate; others are more difficult. Currently, AI excels at exploratory tasks, such as finding a route for a traveling salesman, but it’s less effective at contextual problem-solving that requires deeper understanding and precision. As AI becomes smarter and more widespread, it will also generate new kinds of work.
“If we make it efficient and cheap enough, there’s new work that is going to bubble up.” (Christian Terwiesch)
Today’s large language models are not the final word for AI. Even more advanced models are in the pipeline. People must, therefore, embrace the principle of adaptation in their career paths and understand that the arenas where human insight remains critical will remain a moving target.
About the Speakers
Host Eric Bradlow is the Vice Dean of Analytics at Wharton, guest Christian Terwiesch is the Andrew M. Heller Professor at the Wharton School, and Valery Yakubovich is the executive director of the Mack Institute for Innovation Management.