How to best spend one billion on AI
The Norwegian government has allocated one billion Norwegian kroner over five years for research on artificial intelligence (AI). The question is how we can best utilize this potential. Should we research the development of AI, or should we research how to best reap the benefits of AI in businesses?
In 1960, Harvard Business School professor Theodore Levitt introduced the concept of "Marketing Myopia" in his famous article of the same name. He warned that companies that focus too much on existing products and markets risk long-term failure.
This concept, which is just as relevant today, can also be used to explain "Innovation Myopia," where companies limit themselves to small improvements instead of groundbreaking innovations – moonshots.
Examples from Norwegian businesses show that AI and innovation can go hand in hand to create entirely new solutions.
Cognite is a technology company revolutionizing the industry with digital twin technology. Gelato, a platform simplifying global print production. AutoStore developed a new warehouse and picking system technology, and Vipps provided customers with a simple mobile-based payment method.
These examples demonstrate that these leaders are customer-centric by using AI technology to launch services that customers didn't know they wanted or offering market solutions that were previously not possible.
Avoiding Innovation Myopia is about having a vision for innovation that goes beyond what is obvious today. It is about challenging the organization to look forward and break the bonds that limit creativity.
The consequences of Innovation Myopia can be devastating. Companies that fail to think big and innovate risk losing market share to more daring competitors. They may also miss out on new opportunities and growth, ultimately exiting the market.
Leaders who primarily use AI to produce the same goods and services they always have, just at lower costs, are typically exposed to innovation myopia.
To avoid the diagnosis, leaders must balance two worlds – operations and innovation. Forward-thinking leaders will use AI to increase efficiency and maintain sufficient customer satisfaction while developing a "moonshot"-oriented leadership philosophy – a philosophy that seeks beyond what customers can express as needs.
History shows that businesses experiencing stagnation or decline often had leadership that became too myopic in their thinking – too focused on efficiency and cost-cutting rather than innovation and market development.
The government's investment in AI research deserves applause and is a significant step towards a more innovative future. A future where AI is a natural part of businesses' business models in how they create, deliver, communicate, and capture value. It is worth reminding that out of the world's ten most valuable companies, eight are digital platform companies driven by data and AI.
Now it is up to researchers and businesses to develop and use AI technology to create and capture value in ways that were previously out of reach – something we could never do before.
One thing is certain. Artificial intelligence will not make businesses or jobs disappear, but businesses and employees who do not use AI will be replaced by those who do.