Businesses who use AI see 38% growth

New research has indicated that businesses that use Artificial Intelligence (AI) to drive innovation can see 38% larger impact on growth according to IDEO research

The research also shows that using AI to accelerate innovation rather than efficiency can increase growth by more than a third.

Business leaders who received AI generated questions to help with ideation in response to the brief produced 56% more ideas, with a 13% increase in the diversity of ideas and a 27% increase in the level of detail compared to a control group who were not provided with AI prompts.

The study also found that the way leaders interacted with AI significantly impacted results. Business leaders who received AI generated example ideas, saw a 28% decrease in the volume of ideas, 19% decrease in diversity and 11.3% decrease in detail compared with leaders with AI generated questions.

Sergio Fregoni, Executive Director at IDEO said: “AI’s greatest potential is in helping leaders to create and launch new-to-the-world ideas. When AI is used as the world’s most diverse and informed collaborator, rather than a magic black box of solutions, we can address more divergent and complex challenges with greater speed, and at a larger scale.”

The research showed that UK businesses using AI saw a 2.4% increase in growth and 0.24% reduction in costs as a result, demonstrating that the greatest benefits of AI adoption come from driving growth, rather than cutting costs. However, these numbers hide significant variation.

C-suite leaders who use AI as a tool for innovation saw a 5.4% increase in their growth, a 38% higher figure than for companies who use AI for other objectives.

While businesses using AI consistently see benefits across customer experience, efficiency and product development, there are also growing pains. C-suite leaders who use AI as a cost cutting tool are three times as likely to see a reduction in their efficiency than average and twice as likely to say it has damaged their relationship with clients. Furthermore, more than a quarter (26%) say AI has actually slowed their growth.

Despite these trade-offs, just 18% of C-suite respondents intend to use AI to drive growth in their business, with 64% seeing it as a cost cutting tool.

Despite the potential of AI to drive growth, a worrying 21% of C-suite leaders do not understand how or why their businesses are using AI. This is in spite of the fact that 45% of C-suite respondents believe that AI will make or break their organization.

The findings underline that many C-suite leaders are failing to deeply integrate an understanding of AI into their strategy. A surprising 35% of the C-suite have said that AI has changed the way they talk about their products and services but has not changed what they actually do, with 26% believing AI is a passing fad.

Lorenz Korder, Managing Director of IDEO London, said “The time will come soon when AI is embedded within every business. Winning in this world will require leaders to give AI a seat in the boardroom, not just a role in the back office.

“Leaders need to know how to embrace AI to create new ideas and fresh business  models, not just ever more efficient versions of the businesses which came before.

“In a world which has thrown so many curveballs at business leaders, the disruptive potential of AI is a reason for optimism and growth. We must grasp it.”