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Enterprise AI tools help cultivate better business health

AI technologies can give companies a business boost, enough so that the number of available jobs for humans may increase instead of declining due to more automation.

For the most part, the current conversation on how AI could affect employment seems to revolve around two conflicting ideas.

Most pundits, including prominent economists and machine learning experts, think that AI technology will advance to the point where it can take over many of the jobs now held by humans, severely impacting the average worker and causing the unemployment rate to skyrocket.

Others posit that the number of jobs won't radically diminish as the use of AI grows, but the nature of the work people do may change, including an increase in the proportion of jobs in which people manage enterprise AI tools.

I want to bring up a third option: the possibility of jobs growing as business health improves -- a scenario in which businesses will operate better, survive longer and grow faster because of the proper utilization of AI. As a result, enterprise AI applications would indirectly create more job opportunities, not fewer.

We're already using machine learning and AI tools to radically change healthcare, customer service, home life and online user experiences. Now is the time to acknowledge and expand the business benefits -- and overall economic improvements -- that we get from these powerful tools.

How AI can lend a hand for lending

For example, many startups and small businesses rely on external funding to raise capital. Lenders must be able to perform sophisticated analytics to evaluate the growth potential and survival probability of such companies. An improved mechanism for identifying the right candidates for loans is likely to increase the volume of the capital lent. That, in turn, can increase the probability of healthy businesses starting, growing and surviving.

We can illustrate this using the Dun & Bradstreet Small Business Credit Card Utilization Index. It's a potent indicator of credit availability -- or unavailability, as constraints in credit can lead to higher credit card usage. The index, which is pegged to a 2004 baseline, showed a significant peak during the 2008 and 2009 recession. There was a 51-point jump between Q4 2007 and Q1 2009, a sign that small businesses vigorously ran up their credit card bills as the slump set in.

Dun & Bradstreet small business credit card utilization index
This index tracks the use of credit cards by small businesses against a baseline set in 2004.

Evidently, the onset of the economic crisis led lending institutions to cut back on extending credit to businesses in general, without considering individual prospects. This resulted in many viable businesses being denied loans, hence adding to the number of companies that experienced distress during the downturn.

An AI-driven approval system, if it had been in place at the time, would have been able to pick up on the finer characteristics of the businesses that applied for credit and extend loans to the ones that exhibited the best chances of ongoing success. In the future, such a system could help the most viable businesses succeed; it could also benefit lenders, as they would be able to securely offer credit even during a financial crisis.

According to the U.S. Small Business Administration, small businesses provide 47.5% of the private sector jobs in the country. However, many of these businesses struggle and then fold during their first few years, even when there isn't a recession. By using AI to provide opportunities for more of these businesses to thrive, we can help improve the likelihood that they will continue to create jobs for many years to come.

More potential enterprise AI uses

In addition to improved lending practices, here are two other ways enterprise AI applications can help boost business performance.

Operations. Many of the startups and new businesses that are savvy users of AI are disruptors. They will challenge companies that aren't embracing change, which will foster healthy competition and innovation. Advances in analytics for businesses are already helping provide better insights that can lead to improved business health.

For example, we're seeing reduced levels of fraud and financial risk in companies that use AI-augmented analytics to identify potentially fraudulent transactions. Companies are also using AI to help them detect potential defects in assembly lines so they can prevent disruptions to production.

Using AI as a vehicle to improve business performance can help companies grow and thrive.

Business relationships. AI can help businesses identify the right companies to work with and pinpoint potential issues in a supply chain before there are problems with production or distribution.

In addition, it can help businesses understand the financial health of their partners, suppliers and customers, and it can provide insight into the growth opportunities and associated risks that working with each one presents. For example, scores and ratings enhanced by machine learning can be used to identify ideal customers and prospects.

Using AI as a vehicle to improve business performance can help companies grow and thrive. As more organizations embrace the advanced analytics made possible by the technology as part of enterprise AI initiatives, the healthier businesses will be -- and, by extension, their ability to offer employment to more people will be strengthened.

This was last published in March 2019

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