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The Value Creators Podcast Episode #29. Raushan Gross on Entrepreneurial Value Creation in the AI Economy

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Professor Raushan Gross, who teaches Business Management And Leadership at Pfeiffer University, has focused his most recent research on the impact and influence of A.I. on entrepreneurship. He published some of this research in a series of articles at mises.org. One of them links A.I. to The Wealth Of Nations, and, of course, the wealth of nations is driven by entrepreneurship. From this vantage point, Professor Gross identifies the multifaceted impact of AI on society, economics, and business strategies, advocating for a paradigm shift in management thinking to adapt to technological advancements.

Resources:

The Fate or Wealth of Nations: AI, Robotics and Automation

Will AI Learn to Become a Better Entrepreneur than You?

Prices, Food, Employment: AI and Robotics Are for Regular Folks, Not Just the Elite

Would You Hire an AI-powered McRobot or a Human Employee?

Artificial Intelligence Enhances Consumer Sovereignty

Artificial Intelligence Can Serve Entrepreneurs and Markets

The Fear of Mass Unemployment Due to Artificial Intelligence and Robotics Is Unfounded

Show Notes:

0:00 | Intro
2:27 | Exploring AI’s Impact on Entrepreneurship
7:18 | Can AI Surpass Human Entrepreneurship?
8:48 | Exploring AI as a Service and AI Stacking
12:08 | AI as a Team Member in Entrepreneurship
15:10 | Small and Medium Businesses Can Embrace AI for Strategic Advantage
17:13 | Transition to Autonomous Decision-Making with AI
21:13 | Concerns on AI Centralization and Oligopoly
25:15 | Adam Smith: Global Scale AI is the Wealth of Nations
26:40 | Elon Musk on Value Creation: the Value Meter
29:14 | Does AI Redefine Management by Value Metrics?
32:14 | Wrap-Up: Rethinking Management in the Digital Age

Knowledge capsule

AI changes how individuals and entrepreneurial firms interact with the market.

  • We can’t be sure of the form the interaction will take.
  • But we know that we are using AI in every market transaction
  • While some individuals have doomsday visions of AI, entrepreneurs ask, “How can I use this to improve my business and how I serve customers?”

Human ingenuity will always be a critical and irreplaceable part of entrepreneurship.

  • AI is an active tool for entrepreneurs.
  • It will be a competitive factor in servingand delighting customers.
  • It’s a service to entrepreneurs to help them succeed.

Entrepreneurs can assemble and combine bundles or stacks of AI services into complete business models.

  • Austrian economics explains how entrepreneurial business consists of combining and recombining value-facilitating assets.
  • This is precisely how entrepreneurs utilize AI.
  • There’s no need to own the assets, just to control them and their value direction, and this is the business service that today’s AI tools offer.

AI can be a team member in value creation teams recruited by entrepreneurs.

  • Most productive work is done in teams.
  • AI can be a team member, bringing new knowledge, querying and challenging existing knowledge, and helping to advance knowledge-building at speed.
  • AI can also automate a lot of implementation processes, freeing entrepreneurs to focus on creativity and innovation.

AI will also play a role in technological deflation.

  • While governmental monetary and fiscal policy creates inflation, the role of the entrepreneur and technology is deflationary: making production faster and lower cost with improved quality.
  • AI will contribute by lowering the costs of doing business.
  • Entrepreneurs will be more empowered and the general level of well-being will rise.

Any risks lie in the danger of centralization of AI.

  • Will governments centralize AI under their singular control?
  • WIll the massive investments required in building AI server farms and databases and LLM’s result in a few corporations controlling AI for the whole economy?
  • It’s more likely that entrepreneurs will be able to build their own models using base LLM as a platform.

One of Elon Musk’s innovations points to AI as a “value meter”.

  • Algorithmic management at Tesla includes the ability of AI to assess the real time value creation product resulting from a team’s work with the resources at its disposal.
  • The AI can simultaneously scan all the other value creation opportunities available at the same time and reallocate teams and resources to higher value uses.
  • In this way, AI acts as a “value meter” for the productive activities of a work force and factory.

Global Competition in AI:

  • There will be a global race for AI dominance among nations.
  • Those nations that are most  energetic and innovative will shape the future landscape of AI development.

The Value Creators Podcast: Episode #13. Ben Johnson On The Evolution of Software Entrepreneurship

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It is evident that in today’s economy, AI & software are extremely powerful tools in business, creative pursuits, and innovation. 
 
In this episode, Ben Johnson, co-founder of Particle41 and other successful software companies, joins to discuss the integration of AI from enhancing customer support to aiding software development, the ethical considerations of AI usage, and its simulation of empathy.

Resources:

Particle41.com

Ben Johnson on LinkedIn

Knowledge Capsule:

Agile and Lean Methodologies in Software Development:

  • The adoption of agile and lean methodologies in software development has enabled faster and more efficient processes.
  • These methodologies involve iterative development, user feedback, and continuous improvement to align with market demands.
  • Continuous adaptation and flexibility are crucial components, as they allow software to evolve according to user needs.

Action: Observe software development in action, and ask how you can transfer its methods to other parts of management.

Challenges and Rewards of Continuous Improvement:

  • Embracing continuous improvement in software development requires a thick skin, humility, and openness to user feedback.
  • While it can be intimidating and unstable, the process focuses on efficiently achieving business goals rather than merely creating perfect products.
  • Businesses must be prepared to adapt and evolve software as long as it remains relevant to users’ needs.

Action: Make continuous improvement a commitment in all parts of business management. Set challenging goals and don’t be deterred.

DevOps and AI Integration:

  • DevOps involves platform engineering and continuous integration/deployment, streamlining software development and deployment processes.
  • Infrastructure as code and robust assembly line processes are key components of DevOps.
  • AI, especially natural language processing, is being integrated into customer support and development workflows to enhance efficiency and provide novel solutions.

Action: Make use of DevOps experts like Particle41 for robust provision of digital operations.

Ethical Considerations of AI:

  • Businesses must establish policies around AI usage, especially when sensitive or private information is involved.
  • Integrating AI tools requires a thorough understanding of how they work to ensure quality control and ethical use.
  • The use of AI for customer interactions and support should be accompanied by clear communication and expectations.

Action: A.I. is coming. Develop policies in advance.

Empathy and AI:

  • While AI can simulate empathy through language patterns, it’s essential to understand that AI’s responses are correlated patterns rather than genuine emotions.
  • AI’s capacity for simulating empathy and emotions is a tool, not an end in itself, and users should be educated on its limitations.

Action: Entrepreneurship is subjective, empathic, human-to-human. Use A.I. to help, but not for human-to-human understanding.

Innovation and Economic Changes:

  • The current shift in venture capital dynamics could impact innovation and startup culture.
  • Smaller companies might need to adopt cash flow-based models similar to historical entrepreneurship, favoring incremental growth and learning.
  • Larger corporations could potentially support smaller startups to foster innovation, possibly through divisional startups or collaborations.

Action: The VC funding world often chases fashions and fads. You may have to spread your net wider for funding if you are not part of the current fad.