AI Won’t Give You a New Sustainable Advantage

Generative AI will likely create significant value for businesses, but it won’t provide sustained competitive advantages, as widespread adoption will level the playing field. Prof. Jay Barney of the Eccles School of Business and Martin Reeves, Chair of the BCG Henderson Institute argue that companies can amplify their existing unique advantages with AI, but it won’t be a game-changer for everyone.

➡️ TECHNOLOGICAL INNOVATION: Gen AI, like past innovations, will radically transform business, but its broad adoption will prevent sustained advantages for individual companies.

➡️ SHORT-TERM GAINS: Early adopters may benefit briefly, but competitors will quickly catch up as gen AI becomes commonplace.

➡️ VALUE CREATION VS. CAPTURE: AI can reduce costs and drive innovation, but the value generated will be shared across all companies using similar technology.

➡️ PROPRIETARY DATA CHALLENGE: Even applying gen AI to proprietary data may not sustain an advantage, as competitors can often replicate similar results.

➡️ AMPLIFYING EXISTING ADVANTAGES: Companies with rare, hard-to-imitate resources and capabilities can use AI to enhance their existing strengths and potentially maintain a competitive edge.

Do you agree? Thoughts?

Full article: https://hbr.org/2024/09/ai-wont-give-you-a-new-sustainable-advantage

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