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Why Artificial Intelligence is Recession Proof

Businesses anticipating a recession may be looking to cut down on spending. Whether it’s marketing programs, more aggressive strategies for growth, or plans for expansion, fears of a recession are making organizations pull back on how and where they spend. One area not on the menu for cutbacks? Technology—and for good reason.

Published on:
February 15, 2023

Businesses anticipating a recession may be looking to cut down on spending. Whether it’s marketing programs, more aggressive strategies for growth, or plans for expansion, fears of a recession are making organizations pull back on how and where they spend. One area not on the menu for cutbacks? Technology—and for good reason. 

Although economic predictions for 2023 have been bleak, organizations in major industries are actually planning to increase their tech spend in 2023. Human knowledge is expensive, and in industries with repetitive or highly manual work, using artificial intelligence (AI) tools and platforms to streamline the process can go a long way to increasing the bottom line. 

According to many business leaders in the United States, technology investment and business strategy are one and the same. In a post-pandemic environment, AI-based platforms, analytics, and machine learning tools have become firmly woven into the business environment—and even in the event of a sharp economic downturn, most executives suggest that they aren’t going away. 

Healthcare providers are planning to spend more on software in 2023: 40% of businesses in the health industry said IT solutions were a top 3 priority, and 80% of this group would put them in the top 5. Even in the event of a recession, over half of insurance providers are planning to increase their tech spending—including on machine learning and AI. So why the shift?

AI allows businesses to protect their competitive advantage

According to LinkedIn co-founder Reid Hoffman, businesses looking for a competitive advantage in today’s environment need to keep AI in their strategy, whether now or in the future. “Over the next five years I think there will essentially be an AI tool for every job that produces some kind of informational output,” he told The Telegraph.

Rather than being a cost center, technology is now a business driver—and AI tools can be a sustainable differentiator that sets companies apart. Why? Rather than replacing the work of humans, it enhances them. Knowledge workers spend 30% of their time searching for the right information. When data is complex, unstructured, and large in scale, this search process is resource intensive and time consuming. This makes it hard for organizations to scale, since additional resources need to be added in order to earn additional income. 

With tools like AI, employees can free up time for more high value work, improving the output and quality of the business overall. Whether this means you’re offering your clients more options or offering better service in less time, a solid AI platform helps organizations stay ahead of the curve when it comes to the competition. 

AI improves margins and boosts bottom line

Despite the somewhat gloomy economic outlook for 2023, investment in enterprise tech continues to climb. Large organizations are leaning on technology to deal with problems of inflation and supply chain shortages, enough so that analysts at Gartner have declared technology recession-proof.

With AI booming despite technology industry declines, it’s easy to agree: especially in industries like insurance, claims, and workers compensation. AI-driven strategies for triaging claims, onboarding clients, and analyzing data can reduce the overall costs associated with operating the firm. Even in a recession, efficiency improvements like these can improve productivity enough so profits can continue to rise, even if growth in the organization has slowed. 

AI enhances human capital through efficiencies - AI does not replaces it

Unlike the automation strategies of the past, today’s technology is designed to be used in conjunction with the human workforce. Tools driven by AI enhance the existing workflow, automating the lengthy and repetitive parts of the job (like indexing unstructured documents), while leaving more difficult or specialized tasks to the experts. 

Organizations have been able to operate 70% faster with these changes, offer an easier transition to a remote office, and let businesses tackle more jobs in less time. In fact, many employees are willing to take less money in exchange for remote work—an incentive NPR economists have dubbed a “big, fat, cookie” for employers looking to lure and retain talent. 

All of this adds to improvements in efficiency, profits, and growth now possible with the use of AI. Recession or not, technology investment is here to stay: and advances in AI are leading the charge in what is predicted to be a global shift.

Kristen Campbell
Content Writer

Kristen is the co-founder and Director of Content at Skeleton Krew, a B2B marketing agency focused on growth in tech, software, and statups. She has written for a wide variety of companies in the fields of healthcare, banking, and technology. In her spare time, she enjoys writing stories, reading stories, and going on long walks (to think about her stories).

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