Building Resiliency: AI’s Role in a Changing Economy

In this article we discuss:

• AI as the Backbone of Business Resiliency
• The Unintended Catalyst
• Empowering the Workforce for the Future
• Rapid, Purposeful Adoption
• Building Future-Ready Operations

The economic headlines lately have been a bit of a rollercoaster. From tariffs to trade tensions, businesses are grappling with a complex landscape. 

It’s been hard trying to unpack how organizations can not only survive but truly thrive amidst such uncertainty. That's where artificial intelligence enters the chat. It turns out it can be a powerful tool for resilience and growth. 

A recent Fortune article seems to back up that changing economies have driven past technological advancements, suggesting that AI could be poised to do the same. 

To dive deeper into the nuanced economic impact AI could have, Brian Sathianathan, chief technology officer and co-founder of Iterate.ai, shared his perspective on how the moment we’re in could fuel the rapid development of AI and shape our collective future.

AI as the Backbone of Business Resiliency

When the economic forecast looks a bit cloudy, what's often the first thing businesses do? Batten down the hatches and look for ways to cut costs. But AI offers a smarter path forward than just tightening the belt. As Sathianathan points out:

“During recessions, companies often prioritize reducing expenses, and AI technologies can streamline processes, automate routine tasks, and boost productivity."

It’s not just about doing less; it’s about doing more with existing resources, getting leaner and more efficient where it truly counts.

Think of it like trying to navigate a labyrinth blindfolded: AI provides the map. 

"Investing in Al during these challenging times can provide a competitive edge that enables organizations to adapt to market changes and leverage deeper customer insights for strategic gains."

It’s about more than just surviving; it’s about positioning your organization to come out ahead. Moreover, businesses are compelled to sharpen focus and identify and prioritize the most impactful applications of new technologies. Sathianathan observes:

“Economic slowdowns sharpen the focus on high-impact Al use cases, fostering innovation in areas like predictive analytics and customer service. For example, industries like finance may benefit from Al's capabilities in risk management and investment strategies."

From anticipating market shifts with predictive analytics to enhancing customer interactions through AI-powered service, and even shoring up financial stability with advanced risk management, AI becomes indispensable. Ultimately, the message is clear: 

"While facing economic challenges, businesses that embrace Al are likely to drive innovation and emerge stronger when the economy recovers."

The Unintended Catalyst

It might sound counterintuitive, but Sathianathan believes that the challenges ahead could spark innovation. The CTO sees the economic headwinds as potential tailwinds for the AI industry. Some industries are already seeing AI’s positive impact as the landscape changes. 

Sathianathan explains that this could spur AI development  and even create more jobs, ultimately stimulating local economies as companies invest in local talent and technology.

"Moreover, tariffs may accelerate the move toward local AI deployment. Companies may partner with domestic providers, leading to further investment in local infrastructure and talent,” he adds.

In essence, what might seem like a barrier could very well be the catalyst for remarkable growth and investment in AI infrastructure.

Empowering the Workforce for the Future

One of the most exciting aspects of AI adoption is its potential to liberate the human workforce. 

Sathianathan believes AI can directly benefit employees by automating repetitive tasks, allowing people to focus on more nuanced issues. He specifically notes that small and medium-sized businesses (SMBs) can utilize AI solutions like chatbots to handle customer inquiries, while staff focus on high-level tasks. 

Think about it: the tedious data entry, the endless email sorting, the administrative drudgery—all can be streamlined. This allows our collective energy to be redirected toward higher-value work, fostering creativity and deeper problem-solving.

Beyond just freeing up time, Sathianathan believes AI production, spurred by tariffs, could contribute to job growth as local investments spark new business opportunities. 

How should businesses prepare for this evolving workforce? Take a proactive approach by finding a meaningful way to drive AI adoption in your organization. 

Workday CIO Rani Johnson offered this advice during a recent Future of Work podcast:

“When driving AI adoption within your organization, remember to start with building awareness and excitement. Make AI tools readily available and integrated into your employees' everyday workflows. Then identify and empower your AI champions, showcasing real-life, relatable use cases that demonstrate the value and ease of using AI.”

This ensures that as AI reshapes industries, employees are equipped with the skills and knowledge needed to thrive in an AI-centric economy, ultimately securing a more robust and adaptable workforce for the future.

Rapid, Purposeful Adoption

The interesting thing about external pressures is how they can often accelerate internal transformations. 

As Sathianathan explains, "To address the costs and uncertainties associated with tariffs, companies might turn to Al solutions for better efficiency and reduced reliance on imported technologies." 

This could mark a shift across industries as organizations rush to adopt technology that will give them a competitive advantage. The CTO shares how some industries can benefit from strategic AI adoption:

• Manufacturing: AI can optimize production and lower labor costs.

• Logistics: AI can enhance route optimization and supply chain management.

• Customer service: AI chatbots improve response times and customer experience.

• Healthcare: AI diagnostic tools can enhance patient care.

But these solutions aren’t exclusive to just these industries or large enterprises. 

"Tariffs may drive the adoption of Al among small and medium-sized businesses as they look to optimize their operations, reduce costs, and remain competitive,” Sathianathan adds. 

Implementing AI strategically levels the playing field and empowers smaller players with powerful tools. SMBs are keenly adopting AI solutions like chatbots, freeing up staff for more meaningful, complex work. They're also leveraging predictive analytics tools to provide insights into customer behavior and market trends, which is incredibly powerful for thoughtful planning. 

Some executives agree that AI can be a useful tool but also warn that organizations should implement it thoughtfully and not assume it’s a solution to all problems. 

Pierre Laprée, chief product officer at SpendHQ, and Paul Magel, president of the supply chain tech division at CGS, both told PYMNTS that AI won’t automatically offset costs, with Magel adding, “AI is not a panacea. It’s incredibly helpful but requires the right approach to be effective.”

Building Future-Ready Operations

Navigating today's fast-changing economy is not just about responding to challenges, but adapting and planning with purpose. Sathianathan offers a clear roadmap for businesses to future-proof themselves amid economic shifts:

• Supply chain fortification: This includes crucial steps like diversifying suppliers and optimizing supply chain operations to minimize disruptions and reduce costs.

• Innovation investment: Beyond immediate adjustments, invest in research and development and explore alternative technologies.

• Financial foresight: For true financial resilience, forecast and budget for potential tariff costs, hedge against currency fluctuations, and develop strong financial plans.

Ultimately, the goal is to not just weather the storm, but to emerge from it stronger and more competitive. 

The integration of AI is a long-term evolving imperative. Sathianathan emphasizes, "To achieve a balance between fostering Al innovation and managing potential risks, businesses should adopt various strategies."

This involves a dual approach:

• Driving innovation: Businesses should consider investing in research and development to drive innovation and promote experimentation.

• Responsible governance: Focus on establishing clear Al governance policies. Organizations should conduct regular risk assessments and implement thorough testing and validation processes to mitigate risks.

Sathianathan insists that by cultivating a culture of responsible innovation, keeping stakeholders engaged, and staying informed about regulatory developments, businesses can ensure that their AI journey is both groundbreaking and secure, truly future-proofing their operations and competitive standing.

The Best Path Forward

The economic landscape might feel like a complex puzzle right now with tariffs and recession concerns adding new pieces to the board, but Sathianathan is firm that this isn't a time for retreat.

Artificial intelligence can serve as an indispensable tool for business resiliency and offers a competitive edge even amidst an economic downturn. While there will undoubtedly be challenges, a strategic pivot to AI could be a crucial tool in helping some companies stay ahead.

Ultimately, the path forward lies in organizations adapting and embracing AI with responsible governance, continuous innovation, and strategies that drive business value. Businesses are not just navigating challenges; they are building resilience, driving progress, and ensuring they emerge stronger and more competitive in the evolving global market.

Ninety-eight percent of CEOs said that there would be an immediate business benefit from implementing AI. Learn how your organization could benefit in this report, with insights from 2,355 global leaders.