New Deloitte survey finds expectations for Gen AI remain high, but many are feeling pressure to quickly realise value while managing risks

• Three-quarters of respondents expect Generative AI (Gen AI) to transform their organisations within three years.
• 56% of respondents are currently targeting improved efficiency and productivity, and 35% are targeting cost reduction; only 29% are targeting innovation and growth.
• Only a quarter of leaders believe their organisations are “highly” or “very highly” prepared to address governance and risk issues related to Gen AI adoption.
• Only 47% agree that their organisations are sufficiently educating employees on the capabilities, benefits, and value of Gen AI.
• More than half are concerned that the widespread use of Gen AI will increase economic inequality (51%)

Auckland, 31 January 2024 – Building on its annual State of AI in the Enterprise report, the Deloitte AI InstituteTM has unveiled at the World Economic Forum’s annual meeting, the first wave of a quarterly survey which explores how actions taken now will guide how Gen AI adoption unfolds and if its benefits are fully realised. The State of Generative AI in the Enterprise: Now decides next is based on a survey of more than 2,800 Director to C-suite level respondents across six industries and 16 countries. While respondents have a range of self-reported levels of Gen AI expertise, all are experienced with AI and are piloting or implementing Gen AI in their organisations.

“With the rapid advancement of Gen AI and the emergence of new tools, business leaders are finding themselves under pressure to understand the constantly evolving technology. Top of mind is figuring out how to best harness Gen AI’s capabilities to help their organisations, rather than disrupt and hinder them,” says Deloitte New Zealand’s Generative AI Lead, Dr. Amanda Williamson.

“The concept of ‘now decides next’ signifies that the actions, and learnings, that we decide to undertake today will ultimately affect the way that Gen AI unfolds for us in the future. Right now, many of us are in awe of the speed and scale of Gen AI and are carefully balancing the need to act with the desire to protect against risk.”

How early Gen AI experts are driving value

Three-quarters (79%) of respondents expect Gen AI to drive substantial organisational transformation in less than three years. Yet, at the moment, the majority report a strong focus on more tactical benefits, like improving efficiency and cost reduction, rather than things like growth and improving innovation. Like with many new technologies, improving efficiency and productivity was the leading benefit organisations said they were seeking (56%). Areas considered more strategic, like encouraging innovation (29%) and uncovering new ideas and insights (19%) are currently a lower priority.

More than four in 10 (44%) respondents believe they have “high” or “very high” expertise in Gen AI. Among this group, the 9% who report “very high” expertise levels (referred to as early Gen AI experts) reveal how leaders are thinking about and treating Gen AI differently. Nearly three-quarters (73%) of these early Gen AI experts say they are already integrating Gen AI into their product development and research and development, suggesting that they are beginning to use Gen AI for innovation and growth-related purposes. They are also more likely to use Gen AI at a higher rate across business functions.

The early Gen AI experts feel more trust and less uncertainty about the technology and appear to be the most prepared for the changes Gen AI will bring—but they also see greater potential for disruption. For example, compared to respondents with “some level of expertise,” early Gen AI experts are twice as likely to feel that their business or operating model is threatened by the widespread adoption of Gen AI.

Managing talent, governance, and risk are top challenges with Gen AI adoption

Respondents report feeling generally prepared when it comes to strategy and technology infrastructure, but they have lower confidence related to talent, governance, and risk, which are seen as significant barriers to AI adoption.

In fact, respondents cite lack of technical talent and skills as the single biggest barrier to Gen AI adoption. Only 22% of respondents believe their organisations are “highly” or “very highly” prepared to address talent-related issues related to Gen AI adoption. And many are not yet focused on education and reskilling—only 47% of organisations agree that they are sufficiently educating their employees on the capabilities, benefits, and value of Gen AI. The early Gen AI experts, however, are much more likely to focus on educating and reskilling their workforce, and to focus on recruiting and hiring technical talent to drive Gen AI initiatives. For example, 74% of respondents with “very high” Gen AI expertise say they are educating their workforce versus 27% of respondents with “some” expertise.

Similarly, governance and risk are barriers to Gen AI adoption. Only a quarter (25%) of leaders believe their organisations are “highly” or “very highly” prepared to address governance and risk issues related to Gen AI adoption. Respondents’ biggest concerns related to governance are a lack of confidence in results (36%); intellectual property concerns (35%); misuse of client or customer data (34%); ability to comply with regulations (33%); and lack of transparency (31%).

Leaders worry that Gen AI will drive greater economic inequality

Although the leaders surveyed are generally excited and enthusiastic about Gen AI’s potential business benefits, they are less optimistic about its broader societal impacts. More than half of respondents expect widespread use of Gen AI to centralise power in the global economy (52%) and increase economic inequality (51%). Additionally, 49% of respondents believe the rise of Gen AI tools/applications will erode the overall level of trust in national and global institutions.

To help address these concerns, the majority of respondents agree there is a need for more global regulation (78%) and collaboration (72%) to manage the responsible widespread adoption of Gen AI.

“Now is the time to act for the future, when we can easily see the potential while also imagining the risks and guardrails needed to manage the opportunities this new frontier of technology presents,” continues Dr. Williamson.“

New Zealand organisations have the opportunity to integrate Gen AI capabilities into their existing workflows, while also imagining new AI-enabled activities that will transform how they do business,” explains Williamson. “In order to derive full business value from this technology while ensuring use cases are ethical, compliant with regulations and culturally safe, organisations are encouraged to share lessons learned and foster increased workforce preparedness for the impacts Gen AI will have on the ways we operate.”

“While the need to balance the opportunities and risks of Generative AI is well recognised, managing risk in an area developing at such speed can be daunting. As a result, many New Zealand organisations either move very slowly or stand still altogether to ‘wait and see,’ falling behind their local and global peers in the process,” says Deloitte New Zealand Trustworthy AI Lead, Mariette van Niekerk.“

The key is to start small, tackling one or two use cases – leaning into the guardrails aspect at a manageable scale while starting to deliver value.”

To read the full report please visit: Deloitte New Zealand The State of Generative AI in the Enterprise

About the State of Generative AI in the Enterprise

This is the first of a series of quarterly surveys intended to track the integration of Gen AI in the enterprise. This research builds from Deloitte’s previous State of AI in the Enterprise report which has been running for six years now. This wave of the survey, conducted between October 2023 and December 2023, connected with more than 2,800 AI-savvy business and technology leaders directly involved in piloting or implementing Gen AI at major organisations across 16 countries and six industries including Consumer, Energy, Resources & Industrials, Financial Services, Life Sciences & Health Care, Technology, Media & Telecomm, and Government & Public Services.

Sixteen countries were represented: Australia (100 respondents), Brazil (115 respondents), Canada (175 respondents), France (130 respondents), Germany (150 respondents), India (200 respondents), Italy (50 respondents), Japan (100 respondents), Korea (11 respondents), Mexico (101 respondents), Netherlands (75 respondents), Singapore (76 respondents), Spain (101 respondents), Switzerland (50 respondents), the United Kingdom (200 respondents), and the United States (1,201 respondents).

The next wave of this survey will continue to track the integration of Gen AI in the enterprise, and will include a deeper focus on innovation, enterprise transformation, and trust.