NEWSWISE — Artificial intelligence (AI) capabilities are becoming powerful, but they are still in their early stages. As the government develops its strategy for regulating AI, U.S. companies have a responsibility to successfully adapt to AI policies as they are developed, says Kisraya Prasad, a research professor at the University of Maryland Robert H. Smith School of Management.
As academic director of the school's Center for Global Business, Prasad conducted a survey of 885 U.S. C-suite and mid-level managers from for-profit companies. Published as “AI Use and Regulation: A Survey of U.S. C-Suite Executives,” the findings shed light on executive sentiment, revealing both concerns and support surrounding AI adoption and governance.
The report begins with five key takeaways:
- Concerns about job losses are high, particularly in the financial services, insurance and communications industries.
- Strong support for AI regulation is evident, including mandating transparency around AI use, explaining autonomous decisions, and conducting third-party audits for algorithmic bias.
- There is strong support for restricting the export of key AI technologies.
- “Chatbot enhancement” and “coding” have been identified as the most significant uses of generative AI by November 2023, which will already be widely used in various sectors.
- While “improving customer experience” and “improving operations” are the main drivers for AI adoption, the main reasons for non-adoption are “lack of clear use case or perceived need” and “limited technical expertise in resources.”
Survey respondents were selected primarily based on their ability to provide diverse answers and perspectives on AI adoption across industries. Respondents span eight sectors – financial services and insurance, healthcare and biotechnology, hospitality and leisure, information technology, manufacturing, retail, and communications and transportation – and represent approximately half of the U.S. private sector workforce. A ninth category, “other,” was included to represent individuals outside of the eight major sectors.
Overall, around 58% of respondents said their companies have incorporated AI into their operations in some form, 35% responded in the negative, and the remaining 7% said they were unsure of the level of AI integration in their companies.
Additionally, the report covers job losses, level of support for AI regulations and export restrictions, sentiment regarding patentability of AI-assisted creations and IP infringement, usage of AI by sector, and drivers and barriers associated with AI adoption.
Key points in detail
Concerns about job losses are weighing heavily on executives' minds. About 20% of respondents said they were very or extremely concerned about the potential negative impact of AI on their career prospects over the next five years. These concerns resonated with 47% of respondents in financial services and insurance and 32% in communications. Additionally, this concern was shared by 27.5% of respondents with less than 15 years of work experience and 26% of those who identify as AI decision makers at their companies. While there is concern among those who work directly with AI in their jobs, “it's not clear whether this stems from greater knowledge of AI's potential or from being in a more vulnerable role,” Prasad wrote.
There is strong support for regulating AI. The Biden Administration's 2023 Executive Order on AI was intended to establish new standards for AI safety and security, provide privacy safeguards, and promote innovation and competition in business. Over the past five years, 17 states have enacted 29 bills on AI regulation promoting similar principles. Regarding the level of executive support for regulating AI-based systems, respondents were asked about three types of mandates: transparency regarding AI use and data collection, explainability of autonomous decisions made by AI algorithms, and third-party audits of the presence of algorithmic bias in AI algorithms. About 75% of respondents expressed strong or moderate support for regulations mandating transparency, with similar emphasis on regulating algorithmic bias. About 72% of respondents strongly or moderately supported regulations on explainability.
Overwhelming support for export restrictions on key AI technologies. In addition to the 2023 Executive Order on AI, the U.S. Department of Commerce tightened export controls on AI technology, targeting sales of advanced chips and chip manufacturing equipment to China. According to Secretary Gina Raimondo, the aim was to limit China’s “access to advanced semiconductors that could power breakthroughs in artificial intelligence.” Support for these policies was clear among survey respondents, with nearly 60% strongly or somewhat supporting restrictions. Companies with 10% or more of their sales abroad more strongly supported restricting exports of AI technology. Manufacturing led all sectors by a significant margin, with 70% of respondents strongly or somewhat supporting restricting exports of cutting-edge AI technology. Older respondents, those concerned about AI-related job losses, and those with greater trust in government were also more likely to support export restrictions.
Generative AI is taking an early lead in the adoption of AI in business. When asked about the AI technologies their companies have deployed, 39% said they are using generative AI, followed by computer vision (30%) and machine learning (27%). Companies with a large global presence were found to be using AI most intensively for generative tasks. Among respondents from these companies, 33% said they are using generative AI for chatbots, 32% for marketing purposes, and 30% for text generation. When it comes to decision-making tasks where they currently use autonomous decision-making systems, respondents frequently cite inventory management, logistics, personalization, and recruiting.
Improving customer experience and operational efficiency are at the core of AI adoption. Overall, drivers and barriers were similar across industries. However, among companies leveraging AI, these two drivers were present in 66% and 72% of responses, respectively. Barriers cited by more than 35% of companies that have adopted AI technologies included high upfront costs, difficulty in recruiting skilled experts, and difficulty in integrating AI into existing IT infrastructure. Among companies that have not adopted AI technologies, the two most common reasons cited were lack of a clear use case or perceived need for the technology, and limited expertise and resources to implement and manage the technology.
“AI usage patterns are very similar across sectors, but the levels vary significantly. Information technology, communications, financial services, insurance and manufacturing have much higher levels of AI usage than, for example, retail and e-commerce,” Prasad said.
But AI is used in the same way everywhere, he added. “Moreover, sentiment towards AI and its regulation is similar across sectors.”
This study was conducted with funds provided by the U.S. Department of Education through a Title VI grant under the CIBE program.
Read more: AI Use and Regulation: Survey of U.S. Corporate Executives
