Generative AI — a saviour or fool’s gold?
An oasis in a desert of gloom
By Dr. Reg Butterfield
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It is Tuesday afternoon and I set off from my home in Vienna to attend a Hans Zimmer concert at the Zimný štadión Ondreja Nepelu in Bratislava, Slovakia. The journey is just one hour by train and presents an opportunity to relax and reflect rather than having the stress of driving the 65 kms in traffic on unfamiliar congested roads.
I first visited Bratislava in 2001 and on that occasion, I arrived initially by plane from London and then took a train from Bratislava to Košice, a city in the eastern part of Slovakia.
Today, I wondered how much Bratislava had changed since it joined the EU in 2004; a lot has happened in Europe over the last 20 years.
The first thing that I noticed as I stepped out of the station was the way that the people were dressed, the men in particular. In 2001 it seemed that every man was wearing a cheap black leather coat or jacket and a leather cap, and the women were in long drab coats and head scarves; it seemed as if everybody was miserable with hardly a smile to be seen. People in small broken-down huts dispensed all manner of cheap goods in silence and queues were along the road waiting for a tram. The old unreliable Skoda was the taxi as the more modern VW-Skoda introduced in 1999 had yet to impact on the poorly paid majority. The communist era was still impacting on everything even though it had been an independent country since 1 January 1993.
On Tuesday 6 June 2023 things seemed brighter, albeit the shops were old and drab, as is often the case near railway stations. The people were dressed just like any other European and the atmosphere and body language was one of smiling, happy people; things seemed to have changed a lot. As I walked around the streets to my hotel it was clear to me that there has been a lot of change in Slovakia. New buildings, hardly an old car in sight as rows of parked cars sat kerbside just like any other city. The trams were busy, and most were modern. My hotel suite was spacious and half the price of its Viennese equivalent, whereas last time I was here I stayed in academic residential quarters which were basic to say the least.
I felt an atmosphere that welcomed strangers and people were ready to stop and help with local knowledge, whereas last time they looked on the ground before them and hurried past. A mixture of English and German helped to bridge the Slovak language gap as the waitress at a local bar and restaurant patiently explained the local food and beer choices. A great meal and beers for two people with tip came out at €30. A great start before attending the concert, which was three hours of very loud musical brilliance.
On the way back to Vienna the following day I was reading an article about Generative AI, which is a kind of artificial intelligence (AI) that people assign to ChatGPT, Midjourney, or DALL-E.
Whilst there is no real definition for Generative AI, it is different to what people have become used to when using or thinking about AI generally. AI tries to predict the future based on past data, whereas Generative AI is becoming more about predicting the next word in a sentence to enable it to write a paragraph for example. It also attempts to predict what an image should look like when prompted and now it is creating videos from descriptions and a photo. I guess that this makes Generative AI more about the creative and productive use of AI. However, it is still at the early stages of development, which brings me back to Slovakia and thoughts about the impact of Generative AI on such a country.
Generative AI — friend or foe for emerging economic countries?
Is the emerging world of Generative AI an opportunity or a curse for such a small country still struggling with its past in many ways? To try and answer this question it is necessary to understand Slovakia and its journey from communism to being a member of the European Union (EU).
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Since 1993, the Slovak economy has taken a difficult and yet relatively successful path and gradually approached the level of developed countries. Some major milestones were important for the country during this transition after the break-up of Czechoslovakia. These included becoming part of the EU in 2004, the adoption of the Euro in 2009, and being the world’s largest car manufacturer per capita for more than 16 years.
When I was last in Bratislava its economy was growing by almost 6% per year in capita terms, which meant that its economic gap compared with developed Western European countries was substantially narrowed and increased its GDP per capita from 43% of the then EU-15 average in 2000 to 64% in 2008. However, it was hit hard by the 2008 crisis and has been around 1% since then, with 2023 predicted to be 1.5%.
Almost all commentators agree that Slovakia needs to implement policies to move from low value-added to high value-added industries. The economy is largely dependent on the car manufacturing industry, which is export-oriented and increases the vulnerability of the Slovak economy to external shocks.
Improvements in the overall innovation environment are required. Slovakia needs to improve the skills and adaptability of the labour force to new trends in digitalisation and automation technologies. Efforts and policy priorities need to be refocused on the in-house innovation and R&D activities developed by SMEs. Education is a key to the future of Slovakia’s prosperity and yet things do not look too bright.
The education quality of the labour force is seen by Slovakian SMEs as an obstacle to the development of business, which is not only confirmed by the low ranking of Slovakia in the international comparison of adults’ skills, but also by the drain of educated people who are leaving Slovakia. Slovakia has been haemorrhaging its best and brightest for decades — and the trend doesn’t show any signs of slowing. About 17 per cent of students from Slovakia are enrolled in a university abroad, the highest rate after Luxembourg among OECD countries, where the average stands at less than 3 per cent. They tend to remain outside of Slovakia after graduating.
Currently, Slovakia may be seen by many as being in a pretty poor state when it comes to technology with the adult proficiency in computer skills at the highest-level lagging behind the advanced economies; more than one-third of the adult population have no or only limited ability in using computers. Not a good starting point if they want to capitalise on Generative AI, particularly as the risk of unemployment through technology is extremely high in a country that currently relies on the low-value activities that are at risk of being replaced by technology.
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Can Generative AI (Gen AI) come to the rescue of countries such as Slovakia?
Maybe Gen AI can be the very technology that does come to the rescue even if there is a limited number of high-tech educated people (knowledge workers). Surely that is one of the proposed strengths of Gen AI, the knowledge workers are supported by “AI assistants”. This is arguably different to the more general AI of today, which requires knowledge workers to make sense of and use the information that it generates.
The thing about Gen AI is that it is not really an enterprise software type of thing. It works better as a tool that people can delegate things to. This means that it can do many things to support the ‘human knowledge worker’ and as such potentially have a big economic impact.
If the early research by MIT on ChatGPT-3.5 is anything to go by, then Gen AI is potentially a bigger game changer. MIT found that there was a 30–50 percent performance improvement not only in the time it took to write reports of a higher quality than the humans, but also the people using it liked their job more because they outsourced the annoying stuff. So, ChatGPT-3.5 used well focuses on outsourcing tasks and not jobs. The likely impact on jobs is still unknown.
When it comes to Gen AI, the story is different. It is not a machine thinking like a machine, it has human bias, makes things up, and hallucinates, which can be seen as a strength. It means that the work that it is given needs to be considered, just like giving work to a human. Give it human work and it does it with human issues. This means that instead of it being an IT and strategy issue, it may be better to consider it as an HR issue!
Generative AI is an HR issue not an IT issue.
Professor Ethan Mollick (Wharton School at the University of Pennsylvania) discussed this in a podcast when interviewed in May 2023 by Michael Chui (McKinsey Global Institute).
He argued that it is an HR issue for several reasons. It is about people and policy — do you let people use these systems? Who gets to use them? It’s a tool for people to use, not an IT tool. It’s not regulated, and once people use them, it’s not easy to know what they are being used for or what the results are. This means that it is a policy decision, not an IT decision.
“…by the way, when Microsoft releases Copilot, which basically adds AI to Office, you’re going to send an email composed with AI with a document attached that AI wrote, to a manager who’s using AI to read the document and respond to you. “What does that mean for work?” is, I think, a question that we’re barely beginning to grapple with. Again, HR issue, strategy issue, not an IT issue.” (Mollick)
Insofar as the actual role and work of HR, this is an area that will be impacted immensely and will probably be much better for the workforce. More about this in a later newsletter.
Supporting the development of the workforce.
Slovakians need urgent upskilling and development if they are to be competitive in the areas of work that lead to improved GDP and personal incomes. Erik Brynjolfsson at Stanford and others from MIT published research that indicates Gen AI is more helpful for less experienced people than those with experience. This is because the information that people needed to learn a new job was readily available with institutional knowledge at their fingertips. This increased productivity of new hires dramatically because Gen AI gets people 80–90 percent of the way to full proficiency.
The next stage is to use this tool to help educate and skill wider members of society to build a competitive workforce. The challenge for countries such as Slovakia is for the government to support and use Generative AI as opposed to hinder it or, even worse, create unnecessary legal barriers that the SMEs currently complain about in the existing business and educational systems.
Returning to Ethan Mollick, he is one professor who has made the use of AI in the classroom mandatory for his students. He is not only able to raise the level of understanding, expect perfect grammar, and more work in less time, but also enable students to learn at the level that suits them. Gen AI can respond to a request to describe something complicated at a level a 5-year-old can understand, not many professors can do that. On the other hand, other students can opt for higher-level information. This flexible transfer of information and knowledge means that there is no excuse for educational enterprises to leave anybody behind, everybody learns.
Reality versus promises.
Trends have been promised before with people stating things like, “In five years the world will be different. In X years we will do all our financial transactions using blockchain. In Y years we will be using flying cars, and so on.”
A major impetus for Generative AI as a tool of education and business is that it is here now. It is not a promise of the future. The promise is that it will get better very quickly. GPT-4 is available in 169 countries right now and is the most advanced AI publicly available on the planet. Runway Gen-2 is now available for everybody who wants to generate videos from text and has access to Runway’s website.
It’s now up to educators to grasp the nettle of AI in a positive way and then we will find out in due course if the naysayers and doom merchants who complain about the risks of AI are right. Whatever the future holds, at least the workforce will have been educated….
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Is Generative AI an enabler for the future prosperity of countries such as Slovakia? I believe that it is. What do you think?
