The Federal Reserve Bank of Dallas found that nearly 40 percent of businesses it recently surveyed are using AI, while another 16 percent are planning to use it in the next 12 months. Among firms using AI, about half say they use generative AI, which autonomously generates new content, unlike traditional AI, which relies on explicit programming to execute tasks. The extent of AI use varies across firm size and industry. Large firms with more than 500 employees are more likely to use AI than small firms.
Implementation is often a greater barrier to AI use among small firms, with one respondent saying, “We do believe AI has merit, but how do we implement, establish guardrails to keep us out of the ditch and build confidence in the concept? Those are big questions and tall challenges for smaller firms that are not easily answered.”
Business analytics and customer service are top AI uses among large Texas businesses. At small firms, AI is mostly devoted to marketing, followed by process automation, particularly for manufacturers. Retailers cite advertising and customer service as top uses.
Impact on employment is minimal so far
Most companies using AI report it has not affected their need for workers. A financial services firm noted, “AI is helpful in offloading workload and increasing productivity, but we are not at the point where AI is going to replace workers.”
Ten percent of companies using AI say it reduced their need for employees; these firms were largely using AI for customer service and process automation. A manufacturer noted, “There is strong potential for AI to automate or eliminate many clerical jobs in our business that will save our team time and money.” Workforce reductions from AI use are notably more common among large firms than small ones.
Among the modest share of firms reporting an employment impact from AI, decreased employment is most common for low-skill positions. This finding highlights the need for these workers to adapt and acquire new skills more pertinent to a data-driven economy.
Survey findings suggest more AI-related workforce reductions are expected among firms planning to use AI than those that have already implemented it. This could reflect hope that AI will be more impactful than it actually is once it’s implemented. The disparity between expectations and implementation is most pronounced among small firms and manufacturers. One small transportation manufacturer reported, “AI is more challenging to implement than anticipated, and the impact is currently lower than expected.”
It could also be that the AI employment impact is ongoing and may take several years to play out. A third possibility is firms that are early adopters have different characteristics than firms that are planning to adopt, and those differences could account for the disparity.
Users see increased productivity, improved information
Increased productivity is the top benefit AI users cite. AI is particularly useful among novice and low-skilled workers, helping them along the experience curve.
Productivity gains from AI vary by industry and are most pronounced in professional and business services and health care. These improvements are slightly more common among large firms that benefit from economies of scale than small firms. While productivity gains are widespread, the extent of realized advances is not measured and likely difficult to quantify. Estimates of aggregate productivity improvement from AI vary widely.
Access to better or more timely information is another top realized benefit of AI use, particularly among manufacturers. Other benefits, such as customer relationships, cost reductions and increased revenue, are expected more by future AI users than actually experienced by existing ones.
Misinformation, privacy cited as top concerns
When firms were asked about their concerns, misinformation topped the list, particularly for generative AI users. Privacy ranked second, with a large consulting firm pointing to a lack of established procedures regarding the security of proprietary information. Social surveillance or manipulation was another top concern, particularly for traditional AI use.
Additionally, while generative AI is helpful in writing job postings and recruitment materials, one contact said applicants, in turn, can use generative AI to create “expert cover letters, profiles and resumes based on key words rather than true experience and skill sets,” making “it challenging to discern candidates’ true skill level and fitness.”
SOURCE: Federal Reserve Bank of Dallas
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