Embracing AI for competitive advantage
Since the start of the decade, business leaders have been adapting to operate in oscillating market conditions, shifting from favourable to perturbed in a matter of weeks. Geopolitical risk, resource costs, inflation, rising interest rates, and cyber security have proven to be interdependent and reciprocally damaging. However, they have also shaped a new generation of resilient, agile, and innovative leaders.
Technology has been a core theme of the ongoing transformations, bringing a new degree of efficiency, cost-savings, and modernisation to business models, products, and services. 68% of leaders believe that emerging technologies (including AI) are key to driving innovation, creativity and productivity in the business in this decade.
Artificial intelligence appears to be the next tenet to define the new era of economic competitiveness: 65% ranked AI as the most important technology for their business over the next 5 years. However, the adoption levels are largely uneven. The majority of leaders (37%) are still learning about the potential, impact, and implications of AI adoption, while 18% are optimising different aspects of their strategy and 7% leading across all areas.
The 2024 HLB Survey of Business Leaders explores how business leaders use innovative technologies to gain a competitive edge. Through 979 survey responses from 52 countries and six in-depth interviews with subject matter experts, we examine the leaders’ attitudes towards AI, their current position on the AI maturity curve, and strategic priorities for the next year.
Business confidence is on the rise
Business leaders have been tested with a ‘conveyor belt’ of crises. This year, over half of business leaders are concerned with 12 risk factors, up from just 5 in 2020. Ongoing disruption, however, also proved to be a launchpad for innovation. Strategic investments have been made in operational efficiency, business model transformations, and technology-driven innovation.
This year we’re seeing the highest levels of confidence, 85%, in business growth since the start of the decade, and a more optimistic outlook toward global economic growth: 41% expect an increase compared to just 27% in 2023. Concerns around inflation, geopolitical risks, and resource costs have cooled off. Yet leaders face new challenges: an expanding cybersecurity radar, more acute climate risks, and flash growth in disruptive technologies.
Making the most of emerging technologies
The majority of leaders see emerging technologies like AI and machine learning, as the key to driving innovation, creativity and productivity. Digital-led startups have been overtaking larger enterprises by strategically using emerging technologies to carve out their market share. Generative AI had a breakthrough year, demonstrating the new dimension of “intelligence” business software can have. In the next 12 months, 60% of leaders plan to adopt new technologies — twice more than in 2020.
Apart from driving innovation, emerging technologies can also help leaders unlock extra agility and achieve operational spending — two other critical priorities for this year. AI, cloud computing, and renewable energy are seen as the most important technologies in the next five years, and 42% of AI is already implemented in some business areas.
Varying attitudes towards AI adoption
Attitudes towards AI adoption vary, and so do the organisations’ maturity levels. Our survey identified three distinctive cohorts of business leaders.
The Innovators are fast-tracking AI adoption: 66% identified appropriate use cases and 68% incorporated AI tools in their business model. The Explorers are still evaluating the AI potential, with the majority focused on performing technology assessments, use case evaluations, and data quality reviews. The Conservatives don't see AI as an immediate priority and 4% even expressed aversion and doubt of its impacts.
The majority of Conservatives (39%) don’t use AI in any capacity. In contrast, Innovators are using AI with 3X higher intensity across use cases like process automation, document processing, customer analytics, sales, and marketing. Innovators are also more likely to launch new products in 2024 and are 1.8X more confident in their ability to grow revenue than Explorers or Conservatives.