Last Wednesday, I had the pleasure to join retired Cisco CEO John Chambers, NC Secretary of State Elaine Marshall, NC Secretary, State Chief Information Officer Jim Weaver, NC IDEA CEO Thom Ruhe and others to discuss the impact AI will have on our future economy, jobs and the public sector. This AI Summit was pulled together by Morrisville Council Member Steve Rao and was hosted at the Central Pines Regional Council offices in RTP.
AI is the hottest of hot topics, with bold predictions ranging from how AI will solve every problem imaginable to AI destroying every job. The goal of the summit was to sift the reality from the hype and hear from experts the best predictions of the future.
Since retiring from Cisco, Chambers started a venture fund and has invested in 15 companies over the past few years. He said that a few of them were AI startups from the beginning, but since he has been involved, he has made it a mandate that every portfolio company focus on AI. He shared that AI is absolutely the future, and he may be right. Nine of his portfolio companies are already unicorns (>$1B valuation).
Chambers emphasized the speed that AI can accelerate a company. In the recent past, a typical startup journey would take 12-18 months to build a product, perhaps a year more to gain 5-6 customers and $1M in annual revenue. Add another year to get to $5M and a company was on its way to hockey stick growth. His AI companies are compressing the timeline down to 2-4 months to build a product, another quarter to get to $1M in revenue with some companies reaching $5M within the first year.
Secretaries Marshall and Weaver both touted the strong position North Carolina holds in the emerging tech sector. Our university system is strong, and the STEM graduate population is growing. For several years in a row, we have set records for new business formations in the state, demonstrating a rise in entrepreneurship. And the state itself has embraced the use of AI and digital tools within its own workflows, greatly expanding and improving services to all residents and businesses in NC.
There was some debate about how quickly the public sector is (or should be) adopting AI. Two local startups working at the intersection of AI and government were able to share their thoughts. Chip Kennedy, founder of Civic Reach and Pavani Peri, co-founder of Acta Solutions discussed the importance of building trust with the public and helping municipalities to solve workforce and budget shortages by augmenting technology to the existing workforce.
Kennedy’s company is building tools to better support 311 style services, helping residents to get information they need without burdening staff time. It is critical to avoid the current paradigm of low-quality chat-bot style AI. When the technology works seamlessly, and people get the answers they need and trust in the technology increases. Peri spoke about how AI enables government employees to work on important, higher-level work, since AI handles burdensome administrative tasks so efficiently. It makes government jobs more attractive, particularly for early career workers who historically have less fulfilling work in their day to day tasks. Acta Solutions’ powerful tools have enabled the startup to capture customers all across the United States.
Not everything about AI is positive, however. There is a good deal of fear about job loss. Chambers stated directly that he believes in the near term that AI will obsolete more jobs than it creates. I’m less certain that will happen, but I do agree that society is approaching a painful period of change.
In a recent Datafication Nation piece, I discussed the real probability that AI and robotics will obsolete restaurant and service industry jobs. AI is going to be really, really good at doing work in industries with lots of ordered structure and protocol. Law is a perfect example. What many of us think of as “legalese” looks a lot like learning the grammar, syntax and rules of software. We’ll definitely see robot lawyers.
Tom Snyder: What do we lose when tech takes over?
In the long run, I’m much more optimistic, and I’ll tell you why.
Our society still favors making money, and AI is going to be immensely good for business. In the short term, companies will see the cost-saving efficiency of replacing human workers with AI workers. Bottom line costs will reduce, boosting short-term productivity. But this doesn’t do much for the top line.
Top-line revenue is where the big money is, and here is where AI, augmented to human intelligence will really shine. Computers and the internet have been measured to have improved employee productivity by about 4x. In other words, one person with a computer could complete as much as 4 people without. Computers didn’t replace 75% of jobs. Instead, computers led to massive new job categories, enabling companies to make 4x the productivity per hire. Companies hired MORE people once they understood how much more money they could make.
We don’t know how much more efficient AI will make us, but early estimates are about 10x. In the short term, it will be too tempting for companies to grab bottom line savings through job removal. But the companies that instead hire more people, arming them with AI tools to achieve 10x productivity will really shine.
The hard part is the transition. Most people don’t know how to use AI or how to create new AI tools. This is where the entrepreneurial ecosystem is so important. Every new wave of technology is driven by entrepreneurs. It is great that North Carolina has a robust research and university foundation. But commercialization – the core of job creation – is done by startups and small businesses. Those startups, in turn, train a workforce to use AI as an assistant, as traditional “computer jobs” transition to their new “AI jobs.”
This is where North Carolina can really shine. NC IDEA has long been the strongest supporter of the entrepreneurial mindset, and the state-wide ecosystem. They’ve brought together dozens of entrepreneurial support organizations like RIoT to fund and mentor early stage companies that are building the AI and other technologies of the future. If we invest in “this thing of ours” as Thom Ruhe likes to describe our community, we can lead the AI economy and minimize the painful transition from an internet-driven economy to a Data Economy.
The event reinforced a few important takeaways. AI is here. AI is changing everything. And we can be a center of excellence in the Data Economy if we embrace it and invest in the entrepreneurs bringing it to market. If we do it right, we may even entice John Chambers to invest in a few NC AI unicorns.
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