Will AI Disrupt Your Business? Key Questions to Ask

As artificial intelligence changes the business world, executives’ biggest concern is disruption. They worry that their companies will go the way of Blockbuster or AOL if their leaders aren’t quick enough to respond to emerging technologies. In a 2024 survey conducted by MIT Technology Review, 60% of respondents agreed that “generative AI technology will substantially disrupt our industry over the next five years.”

Most businesspeople now understand that there’s a distinction between disruptive and sustaining technologies and that they should be concerned about the disruptive ones. But only in retrospect is it clear whether a technology was disruptive to incumbents or helped them sustain their market leadership. 

The usual inclination of executives in many industries is to assume that AI will be disruptive. The author is not convinced that that is an adequate or correct response. Yes, it’s important to take looming threats seriously, but fearmongering isn’t helpful either, as it can lead to defensive behavior and a narrow set of responses.  A smarter approach is to frame AI as both a threat and an opportunity, and for executives to think about how AI might affect their business specifically. This creates space for thoughtful and creative ways of responding.

For academic research about disruption to be helpful to executives, it needs to provide better guidance on how to act. Prescriptions will never be definitive because circumstances change, but diagnostic questions can help business leaders assess the risks and opportunities of a new technology. This article offers such an approach — a set of questions that, together, provides an assessment of the disruptive potential of any emerging technology. While this article primarily concerns AI (including generative AI), the framework should also be applicable to a wide variety of other technologies.

The counterintuitive takeaway is that for most industries, AI will not be disruptive. There are important exceptions, but in most cases, incumbents can anticipate that AI will help them sustain their positions — as long as they stay on top of what’s happening in their industry.

A new technology can affect the demand side, the supply side, or both. Demand-side effects change how a customer accesses or uses a product. For example, virtual reality headsets change how people experience watching a movie. Supply-side effects change how a product is developed and made; consider manufacturing companies’ use of internet-of-things technologies to improve process efficiency and predictive maintenance in their plants.

How does this apply to the world of AI? There is already strong supply-side effect being felt in most industries as companies use AI to help them better develop and manufacture their products. But on the demand side, the picture is highly variable. A few industries, such as translation services, are massively at risk because AI essentially does their job for them, whereas those selling physical products have not seen big AI-driven changes — at least not yet.  03185698597 Usman Ali

The Supply Side.  Consider these three questions in the context of making and developing a product.  Does the new technology help you do specific activities better or more cheaply than before?  And does the new technology let you reconfigure or simplify the entire value chain of activities?

The Demand Side.  Anticipating demand-side effects with AI is challenging because the outcome differs depending on whether your offering is virtual or physical.   Consider these questions to help you assess the threat level your company and industry face if you are offering virutual products.  Can the new technology actually perform the service for the user?  Does the user still have a role to play by offering intangible expertise alongside the new technology? And can you still make money once this new technology is in operation (with or without human help)?  And questions for Demand-Side Effects for Physical Offerings include: Will the new technology impact how you distribute and sell your offering?  Does the new technology affect user awareness of your offering?  And does the new technology let you bundle additional services with your offering?  And finally we also need to ask are government policies or industry regulations powerful enough to stymie the changes made possible by the new technology?

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