Australian business tuning into potential of generative AI

Mid-market businesses are racing to adopt generative AI tools, even if their enthusiasm is outpacing their awareness of challenges and risks, according to the latest Business Radar Report from Pitcher Partners.

One in three business leaders in the new survey of mid-market firms reported already integrating a generative AI tool into their operations, while a further four in 10 said they were preparing to do so, with a strong belief the technology will help counter resource shortages and improve operations.

Among businesses with a high confidence of future success, more than 50% were already using of generative AI tools.

“The enthusiasm we are seeing indicates mid-market owners and decision makers are dialled in to new and disruptive technology and are pivoting operations to make better use of it,” Pitcher Partners Melbourne Partner Gavin Debono said.

“Using GenAI to improve efficiency and output could soon become not just a competitive advantage, but an existential requirement.”

More than three quarters of respondents (77%) said they expect generative AI to have a positive impact on their business, while 84% expect it will lead to new products and services, and 82% believe it will streamline operations.

Business awareness of generative AI tracks consistently with the rapid uptake of new and evolving generative AI tools such as ChatGPT, the platform that reached more than 100 million users worldwide in its first two months.

But while nearly all mid-market business leaders surveyed had heard of generative AI, the report found a gap between use of and operational implementation of the new tools.

Some had concerns for business around widespread adoption. Among the negative sentiments that emerged from the survey, 60% said the adoption of AI would add complexity for management and 82% believed it would create a need to upskill their workforce.

Data security is also a concern, with over a third (39%) saying they don’t fully trust the data security and accuracy of generative AI tools, while 37% said cost was the biggest challenge. Nearly one in five (19%) said putting safeguards in place was their biggest barrier to adopting AI.

At the same time, the survey suggested that business leaders are underestimating the risks of implementing AI tools into their operations, with just 12% indicating any concern about the risks.

But 33% responded that they weren’t worried about risk, and 16% said they didn’t see any risk. For those that have adopted generative AI, 46% haven’t put in any safeguards, while 25% said they were thinking about it.

“These statistics are worrying, especially when you consider the probability that most businesses will have staff already using GenAI on their own initiative,” Mr Debono said.

“And that’s a problem – confidential customer or business information could be entered into tools, making it available in the public domain.

“Even businesses that aren’t or won’t ever use GenAI need to address and mitigate the risks it poses.”

You can access our Business Radar report here.