Study says AI will transform the economy, but gaining an edge will require human passion and ingenuity

In the coming years, artificial intelligence (AI) technologies will doubtlessly proliferate, seeping into most corners of U.S. society and transforming economies around the globe. But don’t expect AI to confer a competitive advantage, at least over the long haul, according to a new paper co-authored by University of Utah business scholar Jay Barney.

The reason: AI technologies, such as generative chatbots, will be equally available to every player in a particular field.

“Because it is likely that AI will radically transform the way we do business, all firms will have to respond to AI. And AI will not be a source of competitive advantage,” said Barney, a presidential professor of strategic management and the Pierre Lassonde Chair of Social Entrepreneurship in the Eccles School of Business. “That’s our basic story. Because AI is literally going to change everything, everyone will have to change.”

This is not really new. Remember those days before email and cell phones?

What will differentiate companies using AI will be human drive, ingenuity, creativity and passion, according to the study published in the MIT Sloan Management Review. It is co-authored with David Wingate, professor of computer science at Brigham Young University and Barclay Burns of Utah Valley University.

“That creativity must be technical, involving research and development. It must include novel ways to use AI,” the scholars wrote. “But it also includes conceiving of novel partnerships and finding novel ways to connect with customers. These are the same pillars of innovativeness that have always distinguished great companies; AI does not change any of it.”

The rapid spread of AI into the marketplace will also be facilitated by the willingness of tech companies to make chatbots freely available based on open-source software. Computer science programs are now producing doctorates specializing in AI faster than in other fields, and materials are freely available online, which learners can use to bootstrap their skills, according to the study. The AI talent pool is getting ever larger.

“One of the great ironies is that first of all, most AI in its current form is not proprietary,” said Barney, who is last year’s winner of the Rosenblatt Prize, the U’s highest faculty honor. “The generic ChatGPT is widely available at low cost. The outcomes of generative AI are also widely available. And once you apply it, it learns from itself. And so it actually enhances its availability and its inability to generate competitive advantage.”

By way of example, Barney referenced AI queries seeking a list of seven hot toothbrush innovations.

“The problem is your list of seven is the same as my list of seven. It’s the same as that person’s, so the AI is not giving unique information. It’s giving us the collective,” Barney said. “What it does is aggregate information out there, and it aggregates in about the same way, and therefore we get about the same answers.”

Any competitive advantage gained won’t come from whether you are using AI, but from how you are using AI. This highlights the ever-present need for human creativity and imagination.

In a companion paper published in Harvard Business Review, Barney highlights transformative technologies of centuries past, such as the steam engine, electric motor and personal computer, which unleashed huge gains in productivity. Barney also discussed his AI insights on the Eccles Business Buzz podcast.

“But relatively few of these and other technologies went on to become direct sources of sustained competitive advantage for the companies that deployed them, precisely because their effects were so profound and so widespread that virtually every enterprise was compelled to adopt them,” wrote Barney and co-author Martin Reeves.

Barney is now working on a forthcoming paper that posits AI will “commodify” many tasks that are currently handled by educated people, sometimes in entry-level positions, while jobs that require hands-on interaction with customers, clients and patients will continue to be performed by actual people.

“This is having a really big impact on lawyers, for example. All this boilerplate legal stuff can be done by AI cheaply and better,” Barney said. “But the law that requires a deep human touch—and I don’t mean just in a courtroom, but managing relationships with clients—in the foreseeable future, we’re not going to be able to outsource that to AI.”