US Business Leaders Address AI Impact and Regulation Sentiments in Recent Survey

COLLEGE PARK, Md., July 16, 2024 /PRNewswire/ -- As robust as artificial intelligence (AI) capabilities have become, it is still very much in its infancy. With governments formulating strategies for AI regulations, the onus is on U.S. businesses to successfully adapt to AI policies as they emerge, says Research Professor Kislaya Prasad at the University of Maryland's Robert H. Smith School of Business.

As academic director of the school's Center for Global Business, Prasad surveyed 885 U.S. business executives and middle managers from for-profit companies. Published as "AI Use and Regulation: A Survey of U.S. Business Executives," the findings shed light on executive sentiments, revealing both the concerns and support surrounding AI adoption and governance. 

The report begins with five key takeaways:

• Considerable concern exists about job displacement and is foremost in financial services and insurance and telecommunications.
• Strong support is evident for AI regulation, including mandates for transparency about AI use, explaining autonomous decisions and undergoing third-party auditing for bias in algorithms.
• Strong support exists for restrictions on export of key AI technologies.
• "Powering chatbots" and "coding" are identified as the most important uses for Generative AI, which was already widely used across sectors by November 2023.
• While "improving customer experience" and "improving operations" are key drivers of AI adoption, major reasons for non-adoption are an "absence of a clear use case or perceived need" and "limited technical expertise of resources."

Survey respondents were chosen primarily based on the ability to provide diverse responses and viewpoints on AI implementation across industries. Respondents spanned eight sectors comprising roughly half of the U.S. private sector workforce: financial services and insurance, healthcare and biotechnology, hospitality and leisure, information technology, manufacturing, retail trade, telecommunications and transportation.  A ninth category, "Other," was included to represent individuals outside the eight main sectors.

Collectively, almost 58% of respondents reported that their firms had incorporated AI into their business practices in some capacity, 35% reported in the negative, while the remaining 7% stated they were unsure about the level of AI integration at their company.

The report further addresses job displacement, support level for AI regulation and export restrictions, sentiments on the patentability of AI-assisted creations and intellectual property infringement, AI use by sector, and the drivers and hurdles associated with AI adoption.

More on the key takeaways

Job displacement concerns weigh heavily on executives. Regarding the potential adverse impact of AI on career prospects over the next five years, roughly 20% of respondents expressed that they were either very or extremely concerned. These worries resonated with 47% of participants from the financial services and insurance sector, and with 32% in telecommunications. Additionally, 27.5% of respondents with less than 15 years of work experience and 26% of respondents who identified themselves as AI decision-makers at their respective companies share this concern. Although there is discernable concern among people directly involved with AI in their work, "it's not clear if this stems from more intimate knowledge of AI's possibilities or from being in more vulnerable roles," writes Prasad.

A strong backing for AI regulations exists. The Biden Administration's 2023 Executive Order on AI aimed to establish new standards for AI safety and security, create privacy safeguards and promote innovation and competition in business. Over the past five years, 17 states have enacted 29 bills on AI regulation promoting similar principles. As for the extent of support among executives for regulation of AI-based systems, respondents were asked about three types of mandates—transparency about AI use and data collection, explainability of autonomous decisions by AI algorithms and third-party auditing for the presence of algorithmic bias in AI algorithms. Approximately 75% of responses declared to strongly or somewhat supporting regulation mandating transparency, with algorithmic bias regulation held in a similar regard. About 72% of respondents strongly or somewhat supported explainability regulations.

Resounding support for restrictions on exporting key AI technologies. In addition to the 2023 Executive Order on AI, the U.S. Department of Commerce strengthened export controls on AI technology, targeting the sales of advanced chips and chip making equipment to China. According to Secretary Gina Raimondo, the goal was to limit China's "access to advanced semiconductors that could fuel breakthroughs in artificial intelligence." Support for those policies was apparent among survey respondents, with almost 60% strongly or somewhat supporting restrictions. Firms with 10% or greater international sales supported AI technology export restrictions more significantly. Manufacturing led all sectors by a sizable margin, with 70% of its respondents strongly or somewhat supporting restrictions on exports of cutting-edge AI technology. Older respondents, people concerned about AI-related job displacement and those with high trust in the government are more likely to support export restrictions, too.

Generative AI has the early lead in AI adoption within business. When asked about the AI technologies implemented by their companies, 39% shared that generative AI, followed by computer vision (30%) and machine learning (27%), were in use. Firms with a significant global presence proved to be the most intensive users of AI for generative tasks. Among respondents from these firms, 33% said they used generative AI for chatbots, while 32% used it for marketing purposes and 30% for text generation. Regarding the decision-making tasks that currently use an autonomous decision system, respondents regularly cited inventory management, logistics, personalization and recruiting.

Customer experience and operations efficiency improvements are at the core of AI adoption. Drivers and hurdles, overall, were similar across sectors. However, at companies where AI is in use, those two drivers appeared among 66% and 72% of responses, respectively. Hurdles selected by more than 35% of firms with adopted AI technologies included high initial costs, difficulty recruiting skilled professionals and the challenge of integrating AI with existing IT infrastructure. As for companies where AI technology was not adopted, the two most cited reasons were the absence of a clear use case or perceived need for the technology and limited technical expertise or resources to implement and manage the technology.

"There is great similarity in patterns of use of AI across sectors, although levels vary widely. Information technology, telecommunications, financial services and insurance, and manufacturing have much higher levels of AI use than, say, retail and e-commerce," Prasad says.

However, AI is being used in similar ways everywhere, he adds. "Moreover, sentiments towards AI and its regulation are similar across sectors."

Funding from the U.S. Department of Education through a Title VI grant under the CIBE program contributed to this research. 

Read More: AI Use and Regulation: A Survey of U.S. Business Executives 

About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

Contact Greg Muraski, [email protected]

SOURCE University of Maryland's Robert H. Smith School of Business