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How to Use Frugal Innovation to Grow Your Startup

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A frugal tap in Ghana


As the global economic situation deteriorates amid the Russian invasion of Ukraine and soaring energy costs, many aspiring entrepreneurs might be tempted to give up and wait for better days. But don’t give up!

It is true that founding a startup in times of crisis may look more challenging. Investors can also be skittish, and winning new customers is not easy. However, a crisis can also be a golden opportunity to launch a new product or service, as long as the startup at the origin applies specific methods. One of them is called frugal innovation.

Entrepreneurs — frugal innovation can be a powerful tool for growth

Frugal innovation is the process of doing more with less. It can help startups stretch their resources further and achieve a more significant impact. In this post, we explore ways frugal innovation can be used to grow your startup. We’ll also look at some examples of startups that have used this approach to significant effect. Look for new ways to drive growth for your startup.

History of frugal innovation

A frugal tap in Ghana. Image Credit: Amuzujoe

The term “frugal innovation” was coined by Navi Radjou and Jaideep Prabhu in their 2012 book . In the book, the authors explore how frugal innovation can be used to create value in low-resource contexts.

Frugal innovation has its roots in the developing world, where resource constraints have always necessitated a more creative approach to problem-solving. This is evident in the widespread use of Jugaad, a Hindi term that refers to improvised or makeshift solutions.

In recent years, however, frugal innovation has also gained traction in developed countries. This is partly due to the global financial crisis of 2008, which led many companies to reassess their spending to cut costs.

Nowadays, frugal innovation is increasingly being embraced by businesses as a way to drive growth with limited resources. Indeed, startups often have to be scrappy and resourceful to get off the ground, and frugal innovation can help them do more with less.

How frugal innovation can help your startup grow

There are many ways in which frugal innovation can help your startup grow. Here are some of the most important benefits.

  • It allows you to stretch your resources further

As a startup, you probably don’t have much money to spend on marketing or product development. This is where frugal innovation can help, as it allows you to stretch your resources further and get more bang for your buck.

For example, you might use guerilla marketing techniques to promote your product without spending much money on traditional advertising channels. Or you could use open-source software to develop your product, which is often free or low-cost.

  • It helps you to focus on what’s important

When limited resources constrain you, you must be very strategic about using them. This means you need to focus on the most important things to your business and let go of anything that isn’t essential.

In other words, frugal innovation forces you to focus on the things that really matter. This can help you to streamline your business and avoid wasting time and money on non-essential activities.

  • It helps you to be more creative

You have to get creative when you’re forced to do more with less. This is because you can’t rely on traditional methods or solutions to solve your problems.

This creativity can lead to breakthroughs that you wouldn’t have otherwise achieved. And it’s this kind of innovative thinking that can help your startup to grow and thrive.

  • It helps you to understand your customers better

When trying to stretch your resources further, it’s essential to understand your target market and what they want. Indeed, you need to be sure that your product or service is genuinely solving a problem for them.

Solving an issue or problem is even more true in a situation of economic crisis, where people are more careful with their spending and are less inclined to try products or services they don’t know.

By understanding your customers’ needs, you can develop a product or service that meets their specific requirements. This laser focus on your target market can help you to serve them better and grow your business.

Examples of successful frugal innovations

There are many examples in which frugal innovation allowed significant growth for the company behind it. Here are just a few.

The Raspberry Pi

Raspberry Pi
A Raspberry Pi – Photo by Jainath Ponnala; Unsplash; Thank you!

The Raspberry Pi is a prime example of frugal innovation. Developed by the UK-based nonprofit Raspberry Pi Foundation, this tiny computer was designed to provide affordable access to computing education in schools.

Despite its low price point (US$35), the Raspberry Pi offers impressive technical capabilities and has become popular among hobbyists, researchers, and commercial businesses. Its simplicity and versatility have allowed for various innovative uses, from serving as the brain of a homemade robot to helping farmers monitor crop growth. The success of the Raspberry Pi demonstrates the potential for frugal innovation to not only benefit consumers on tight budgets but also spur creativity and drive social change.

Airbnb

Airbnb is another example of this approach. By utilizing unused space in people’s homes and apartments, they were able to create a highly successful global accommodation platform without the expensive overhead costs of traditional hotels.

Not only does this benefit travelers seeking affordable accommodations, but it also helps individuals monetize their spare rooms while boosting local economies. In this way, Airbnb has used frugal innovation to solve both practical and social problems, making it a model for future businesses looking to maximize their resources.

Google Street View

A Google car used to collect data for Google Street View
A Google car used to collect data for Google Street View – Photo by Suzy Brooks; Unsplash; Thank you! 

Google Street View is another service creating maximum value with minimal resources. The service provides high-resolution, 360-degree images of streets and buildings worldwide. These images were collected using a relatively simple and inexpensive camera system mounted on cars and other vehicles.

However, the impact of this frugal technology has been immense. Google Street View allows individuals and businesses to explore destinations, plan trips, and navigate unfamiliar areas without leaving their homes. It also serves as a valuable resource for those in the real estate and construction industries. Finally, it provides essential visual information at a low cost. In short, Google Street View exemplifies how a small investment can yield significant returns.

Mobile banking in developing countries

The traditional banking system often excludes those living in poverty, making it difficult for them to save and manage their money. Some companies, such as M-Pesa in developing countries, offer a solution by utilizing widely available and affordable technology.

By providing access to bank accounts through basic cell phones, individuals can participate in the formal financial system at a lower cost. This frugal innovation addresses the needs of those living in poverty while using resources efficiently and creatively.

In addition, mobile banking can lead to more excellent financial stability and empowerment for individuals and communities, helping to reduce inequalities and promote development. As more companies and organizations invest in mobile banking technology, it has the potential to make a significant impact on global financial inclusion.

The Renault Logan

the Dacia Logan
The Dacia Logan – By JanekJankowski – Thank you!

The Renault Logan, released in 2004, is a prime example of frugal innovation. Developed for emerging markets by the Renault-Nissan alliance, the car was designed with simplicity and cost-effectiveness in mind without sacrificing fundamental functionality and quality.

By using existing parts from other models and eliminating unnecessary features like power windows and air conditioning, the Logan maintained a low price point while still meeting consumer needs.

Its success has been evident not only in its widespread adoption by buyers in emerging markets but also in its expansion into developed markets, where it has seen success as a budget-friendly alternative. The Logan’s frugal approach to design and production is a model for companies looking to innovate efficiently and effectively.

What makes an excellent frugal innovation?

Suppose you want to use frugal innovation to grow your startup. In that case, it’s crucial to create a product or service that is truly valuable to your target market.

As with ANY entrepreneurial venture — each of these suggestions should be your goal whether you have billions to spend — or you are just beginning your quest for a new product or service. Here are a few factors to keep in mind:

  1. It should solve a basic problem

The best frugal innovations solve a defined basic problem for their users. It looks obvious to state, but people are more likely to use and pay for products or services that make their lives easier.

  1. It should be affordable

Another vital factor to consider is affordability. If your product or service is too expensive, it’s less likely that people will use it. That is even more true in developing countries.

  1. It should be easy to use

Your product or service should also be easy to use. Compared to your competitors, it should make things much more straightforward.

  1. It should be scalable

Finally, your product or service should be scalable. This means that it should be able to grow as your business grows.

Strategies to implement frugal innovation

If you want to use frugal innovation to grow your startup, there are a few key strategies that you should keep in mind. Here are a few of the most important ones.

Keep your target market in mind

Keeping your target market in mind when developing a new product or service is essential. Hence it is critical to have a solid business plan before you start. Indeed, it avoids frequent strategy changes along the way, making your product or service difficult for your potential customers to understand.

Furthermore, having a target market will help you fulfill a need while considering this market’s constraints. This is especially relevant if this target market is far from your traditional market (e.g., an emerging market vs. a developed market).

Simplify your offering

Another critical strategy is to simplify your offering. Narrowing down to one or two core offerings allows you to streamline your processes and focus on achieving excellence in those areas. For example, you can remove features that are not part of the basic functionalities.

Simplify complicated, expensive, or time-consuming parts or processes. Or reuse existing resources instead of making new ones.

Focus on quality, not quantity

Focusing on high-quality products and services will result in satisfied customers and build trust and credibility for your brand. Additionally, focusing on quality can often save time and resources in the long run. For example, poorly designed or shoddy products require more revision and repair, leading to wasted time and effort.

On the other hand, high-quality products require less maintenance. They may even lead to repeat business or positive word-of-mouth advertising.

Invest in your team

Investing in your team’s ability to innovate frugally can pay off in the long run. Utilizing creativity and resourcefulness to solve problems not only helps to stretch limited funds but also encourages out-of-the-box thinking that can lead to new perspectives and breakthrough solutions.

In addition, investing in employee training and development shows employees that their growth and success are valued, resulting in higher satisfaction and retention rates. So while it may seem like a cost now, investing in frugal innovation for your team can lead to increased productivity and profitability.

Wrap-up

Frugal innovation is a powerful tool that can help you to grow your startup. If you keep these factors in mind, you can use them to create a valuable product or service that will appeal to your target market.

Inner Image Credit: Provided by the Author; Thank you!

Featured Image Credit: Mikhail Nilov; Pexels; Thank you!

Adama Ba

Adama Ba

Founder and CEO of Jinn

Entrepreneur with a wealth of experience in the electronics engineering field. I’ve lived and worked in many different countries, giving me a unique perspective on the world. I’m the founder of Jinn, a company helping people find their best career path.

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The Power of Human Touch in Software Development and AI Environments

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Igor Bergman


Necessity is the mother of invention — a principle that has defined technological advancement and design for generations. We innovate and create new products, services, and processes based on human needs that arise. Just as these needs evolve with each generation, so too must the way we approach the innovation required to address them, and that requires a human touch in software development.

Digitalization Driving Productivity and Collaboration

In today’s era of digitalization, companies are turning to new technologies, specifically software applications, to drive efficiency, productivity, lowered costs, and smarter collaboration. As the adoption of digital transformation has increased, so has the number of software solutions enabling and supporting it.

Companies are looking to software developers for new ways to integrate technology. Operations demand process automation, improved communications, and the delivery of more value to their customers.

Artificial Intelligence (AI) has been an influential part of this progression and an enabler for many capabilities today; however, we must exercise restraint in relying too much on technology alone to reach business goals.

Restraint With AI Makes Better Sense Today

There’s power in the human touch that can set the stage for meaningful transformation when embraced during the software development process. As we continue to integrate digital technology into nearly every facet of work and life, we need intelligent software design to incorporate more of the human experience to thrive.

The key is finding a measured balance between purpose-driven software design and human touch and understanding how to execute this collaboration successfully and ethically.

AI’s Role in the Consumerization of Software

Historically, enterprise software was initially designed with a particular persona and a very specific set of requirements in mind. As a result, it was built to serve simply as a tool with no focus on the user’s experience, behavior, or even the potential ability of the user to change behaviors.

For example, if a person were using a software program to search for fruit, that software would need to be coded to show each specific fruit. Then, if a user searched for a peach, the software would display a peach. If they wanted to search for an orange instead, the software would need to be hard-coded to show an orange. This is a very cut-and-dry process leaves little room for interpretation.

Software Designed to Consider User’s Behavior

Today, AI-powered software is designed with realistic human values in mind, defining a set of user stories and use cases that proactively adjust to potential user behavior, with a strict focus on providing and maximizing end-user value and experience. Explained differently, rather than designing software around who a user is or what they do, the software is designed to consider the user’s behavior and the value the product can provide for an optimum user experience.

Revisiting the example above, if a user in Florida is seeking “fruit,” the initial result the software is likely to show them would be an orange. Alternatively, if the user lives in Georgia, it would likely show them a peach — since these fruits are indigenous to their respective regions.

Software Built With Human Touch Provides an Experience

In this example, the software was built to look for an outcome and design an experience that considers several factors to present the most likely desired result. This is how AI algorithms are used to design an environment meant to improve the customer experience by anticipating needs based on trends. This is also how software developers automate an experience.

Several different inputs are analyzed to the point where an assumption can be made based on a person’s behavior over time. Content is then populated, or an action taken that the program deems would be most useful for that person, all in the name of improving the user experience. But what if the person in Florida doesn’t like oranges and the person in Georgia doesn’t like peaches? This is where the human touch comes into play

Finding the Ethical Balance Between Smart Personalization and Human Privacy

AI algorithms require and collect personal user data to customize the experience in a unique and valuable way for a specific user. However, they can sometimes be too rigid when analyzing only the data without considering personal preference, free will, or choice.

AI alone, without any oversight, can also go too far, as there’s a fine line between personalization and privacy, and AI can’t make the distinction on its own. A human developer addresses this issue by providing the guardrails necessary to ensure ethical design and desired behavior while also incorporating the flexibility needed to give users a greater sense of choice.

How Do You Protect Your Customers?

Software must be built so the user can determine what data they want to provide to improve their life or minimize evasiveness. On the front end, as software is being designed, developers can build flexible architecture with certain constraints in mind to provide an ethical and secure framework around how the AI algorithm works. This allows users to define where the line is or how much personal data they allow into the architecture or the cloud.

Ultimately, users want AI to optimize the tasks they need to perform but don’t want the AI to make decisions for them without approval. This idea of choice is another critical element of why the human touch is so imperative in the development process, even as the industry has sought faster and more efficient ways of writing software programs.

The Artistry of Software Engineering From the Human Touch

As a means of automating code writing, code generators were introduced several decades ago to quickly write new code and get applications to market faster. Requiring minimal human intervention, the developer would simply set what it needed the app to do, and then code was generated for that specific purpose. It was easy to write code that would solve a particular problem and take the user from point A to point B in the most efficient way possible.

However, the lack of human touch is the issue with this model. There’s no consideration for the user experience or innovation that excites and delights; the software is simply working to solve the problem without room for interpretation. Alternatively, the human coder can push boundaries and determine how to interpret the user requirements to decide the best path between the two points.

Flexible Code Environments Make Efficient Programming

For example, if a program were coded to simply draw a tree, a code generator would produce the same tree over and over with no differentiation in color, leaf type, size, etc. There would be no artistry behind it, and users wouldn’t have the ability to choose from various tree designs. Instead, they’d have to accept the tree the generator produced. But when an engineer has the ability to integrate their personal touch, the artistry of software design is unveiled, and the experience becomes something very different.

Today, our industry has evolved even further, and low-code/no-code environments have emerged as the next generation of modern and efficient programming. Developers can now quickly build the foundation of a program from existing services and functions that have already been written by other coders, easily defining the path the user takes to get from point A to B.

This type of coding is a much more flexible way of designing software that allows engineers to adopt the preferences of the end-user and change functions as the end user changes. However, the various functions are still being coded by an individual and, thus, are constrained to the preferences of that person.

Reusable Templates Boost Productivity

So, to revisit the previous “tree” example, software developer A designs a single tree which developer B can now take and, in about the same amount of time as it took to create just one original tree, reuses as a copy over and over but in different ways.

Several copies can be placed side by side to depict a forest, or a single copy can be placed in front of an abandoned building or on a deserted island to create different applications entirely. However, because they’re all using the same original tree design, all of the trees in each environment still look the same — the artistry is limited to that of the person who originally designed the tree.

Decide and Improve the End Product to Customize

Where the human element comes into play is when the software engineer can have the ability to decide how they want their tree to look and can add features along the entire design process to augment it.

Then, the next engineer can come in and change or improve it to meet the needs of their users, and so on. Now, instead of one tree that everyone has to use repeatedly in different ways, there are hundreds of different trees that all came from the same initial version but have been customized and improved upon.

How Does AI Build a Tree?

If we relied on AI to build the perfect tree, it would calculate only one way to do so, but what if you don’t like it? It’s no longer perfect for you. So, rather than relying on AI completely, developers can choose how to embed AI capabilities into their programs to drive the best customer experience.

These AI integrations have to be customized to fit the environment, however, and this requires an actual engineer to be part of the process, which ensures the human element is preserved.

Ultimately, software engineers have to find the right balance of enabling smarter technology that can proactively anticipate and solve our problems while also ensuring end users have the ability to exercise their right to choose and decide what’s right for them based on the facts presented.

Human Touch at the Heart of Modern Software Design

No longer are software solutions built for a single defined purpose. Instead, they are built to learn and evolve based on the creativity, artistry, and ethics of the human touch. As emerging technologies have helped enable modern innovation with unprecedented speed, and invention can now be born out of demand and pursuit of progress rather than out of necessity.

As AI continues to be integrated into the software development process, the human touch will play an integral role in teaching the software how to adapt to each user’s needs, values, behavior, and privacy priorities.

Featured Image Credit: Photo by Andrea Piacquadio; Pexels; Thank you!

Igor Bergman

A Software and Cloud transformation engineering and product leader, Igor Bergman has extensive experience in software businesses, product management, startups, and business development. He is currently heading Lenovo’s $750M Global Software and Cloud business unit.

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5 Ways to Find Balance at a Startup

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Startup founders and employees find that achieving work-life balance can be challenging. 43% of entrepreneurs agree that work-life balance is one of their biggest challenges. As the start-up grows, demands will also grow. Founders and employees need constant motivation and fresh ideas to keep up.

As challenging as a good work-life balance is to achieve, it is very important for your personal and professional lives. It can be as important as a business plan for your startup. This article gives a better understanding of work-life balance, what it means, and why it is important. It also highlights a few ways to find work-life balance at a startup.

work life balance office setting

Work-life balance meaning

So what is work-life balance all about? In simple words, the term work-life balance is about how you manage your time between work and outside of work. It gives you the flexibility to get things done in your professional life while still having time and energy to enjoy your personal life.

There is no perfect work-life balance template to follow. We are all different, and so what a healthy work-life balance looks like will differ between us. However, the primary goal of a better balance is that you should have a greater sense of well-being and lead a better quality of life.

Why work-life balance is important

Work-life balance is important for many reasons. Some people are willing to give up money for a better work-life balance. This is a true testament to the stress levels of the modern workplace. In a 2020 Deloitte survey, it was found that 44% of millennials say they are stressed all or most of the time. Companies that help their employees have a good work-life balance in their professional and personal lives have higher retention rates.

A good work-life balance has many perks. Some of these include:

  • Fewer health issues
  • Higher productivity levels
  • Fewer burnouts
  • More mindfulness

Poor work-life balance has some dire consequences. It can wreak havoc on your health, home life, and personal relationships. Some of the drawbacks include:

  • High-stress levels
  • Feelings of dissatisfaction with life
  • Increased rates of family issues and divorces
  • Escalation of substance abuse
  • Low productivity levels
  • Dissatisfaction at work
  • Lower levels of motivation, commitment, and loyalty.

work life balance girl outdoor

5 ways to find balance at a startup

To create a better work-life balance, think about how you can achieve balance in your personal and professional life. What works for someone else may not work for you. However, here are some tips you can try to improve your work-life balance.

Develop some time management skills

Many entrepreneurs struggle to manage their time correctly. This is because they spend most of their time working long hours to complete their to-do list. There are only 24 hours in a day, so prioritizing may be the best way to manage your time better.

Create a daily, weekly, and monthly to-do list. Try focusing on the most important tasks on your priority list. Doing so can increase the chances of things being done with greater care and focus.

Another thing you can try to do is to say no to the less important stuff. You can simplify your work and delegate the less important stuff. Also, turn off your phone and email notifications. Set a scheduled time to respond to emails and make phone calls. Replying to emails and checking messages as they come in can be distracting. It can make you lose focus and mess with your productivity.

Try to leave work at work

How often do you find yourself taking work home and working remotely from home? The answer is probably too often. You may find yourself working on weekends and holidays. This leaves you with little to no time to relax or spend with loved ones. Try to do work during work hours and stop once those hours are up.

It is important to have a strict policy when it comes to work and other areas of your life. You can try having a no-work-on-the-weekend rule. Having the rule is one thing, but sticking to it can be hard. Try your best to follow this rule and make no exceptions. The weekend can help to reduce stress from all the issues you dealt with during the week. It can even give you time for ideas and solutions to emerge. It is vital to give your body and mind a chance to rest and recover.

Set aside family time

Making time for your family with a busy schedule can be hard. However, you need to remember that your family is your main support system. When things aren’t going smoothly at the startup, your need for support is greater. This is where your family comes in.

Work decisions and responsibilities become easier to manage with your family’s support. Spending quality time with family members can relieve stress, nurture positive behaviors and promote a healthy lifestyle. Time spent with family can improve both your professional and personal life. Plan family trips, game nights, and other activities. These can help build quality relationships with your family.

Schedule personal time

In today’s fast-paced world, it can be hard to find time to indulge in personal interests. However, one’s personal life is as important as one’s professional life. When you unplug and take a step back, you will experience a whole new perspective.

If you feel overwhelmed with everyday life, it may be time to take some time off work. Take your vacation time to rest and recover. Choose an activity that you love and one that relaxes and rejuvenates you.

You can try to make time to meditate, travel and do things you love. Personal time is best for self-reflection and setting goals. Self-care is also essential for your mental health.

If you cannot get much time off, simply ensuring you sleep and eat well can help. The American Academy of Sleep Medicine (AASM) and the Sleep Research Society (SRS) say to aim for at least six to seven hours of sleep. You should also be mindful of what you’re putting into your body. Constantly chugging coffee and eating junk food will eventually affect your health. Try to eat at least one or two healthy meals a day.

Outsource when possible

Technology has come a long way. It has gone to great lengths that we can now replace much of the work necessary to run a business. Try to outsource repetitive tasks that take up too much of your time. This can allow you to focus on your goals and have more time to deal with personal matters. For your personal reading, here are 10 reasons you should be outsourcing your marketing.

Bonus Tips

SET FLEXIBLE HOURS

A flexible work environment can lead to a healthier work-life balance. Flexible hours, telecommuting opportunities, and other systems can relieve stress. They also allow you to attend to personal matters and spend time with your family. At the same time, it can also help to increase your productivity levels and effectiveness.

EXERCISE

Exercise can improve your physical health and mental health. It can also help to improve your productivity. Exercising for just 30 minutes a day can keep your body and mind active and fresh. This can lead to higher energy levels, increased focus, and completion of tasks faster. Exercise can also help with creativity, so when you’re faced with a challenge, exercise. It doesn’t have to be anything too intense; a simple 30-minute walk may help.

MAKE WORK FUN

The only way to make an 80-hour work week bearable is to integrate some fun. Play is crucial when it comes to working. It can improve employees’ work-life balance as well as founders. Some fun can make you both more productive and lead to a more engaged workforce. It can keep everybody motivated and happier. Try to keep the happy spirit alive as much as possible. You can do this by promoting play, encouraging hobbies at work, etc.

TRAVEL

A change in scenery can work wonders. It is great for your mental and emotional well-being. Traveling to new places can free your mind, body, and soul from stress. It can help you reflect on personal goals and interests. Aside from these, it can enrich and transform your perspective on life. Traveling can also improve productivity, sharpen problem-solving skills and increase creativity.

STAY POSITIVE

Staying positive when dealing with entrepreneurial failures and threats can be hard. However, a positive mindset may be able to help you pull through. It allows you to focus on the positives of the situation and help you visualize your goals. Focusing on the positives and having a clear idea of your goals can result in you meeting them. A positive attitude is awesome, even though it can be tough to maintain.

Inner Image and Featured Image Credits: Provided by the Author; Pexels; Thank you!

Joe Martin

Joe Martin

VP of Marketing

Joe Martin is currently the VP of marketing at Scorpion, a leading provider of technology and marketing to help small businesses grow. Formerly he was CloudApp’s GM and CMO and a Head of Marketing at Adobe. With over 15 years of experience in the industry and tech that makes it run, he provides strategic guidance on how to build and use the right stack and marketing for businesses to grow. Joe believes marketers need smart training and leadership to scale company growth. Connect with Joe on LinkedIn and follow him on Twitter @joeDmarti.

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The Impact of AI as Companies Address the Skilled Labor Shortage

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The Impact of AI as Companies Address the Skilled Labor Shortage


Due to a combination of Baby Boomer retirements and a declining birthrate leading to smaller subsequent generations like Gen Z — employment firms predict that the talent shortage we’re experiencing now is likely to last for years to come. While this has the potential to be disastrous news for the economy, it doesn’t have to be, thanks to another growing trend in business: AI acceleration.

We’re currently seeing an increase in the application of AI in the workplace that moves beyond typical machines and into areas of law, medicine, software, and even art. While many have predicted that the acceleration of AI would lead to the demise of human labor, it may very well be this technology that solves the labor problem — at least for those willing to work in tandem with these AI solutions.

Taking Advantage of AI

So what does working with these AI solutions look like? What challenges are businesses facing due to this labor shortage, and how can AI help solve them? I’ll answer these questions and offer some strategies on how organizations can best position themselves to take advantage of AI and combat the continued labor shortage.

Bridging the Gap

The growing skilled labor shortage is already baked into the next 15 to 20 years, thanks to existing and continuing demographic trends. However, the opportunities to innovate within the labor shortage space are massive in the areas of cloud computing, AI, and robotics. Investment in these areas can help U.S. companies compete in a world that’s increasingly fractured and regional.

Robotics and AI systems have already proven reliable in repetitive, precise, and dangerous tasks. Businesses transitioning their supply chain away from globalization and toward more regional approaches can use AI to automate many of the tasks necessary in warehouse and factory environments.

Plenty of Use Cases

In construction, AI is being adopted to complete tasks such as drywall installation and painting, allowing humans to focus on more complex jobs such as plumbing and electrical installation.

In industrial projects, remote-controlled machines handle the more dangerous duties, like demolition and movement of heavy materials. For office environments, artificial intelligence and automation are handling repetitive occupations — taking over tasks like data gathering, clean up, and prep.

More Than Mundane

However, repetitive tasks aren’t the only places in which AI prioritization is making a difference. It is being employed to help existing workers do their jobs more effectively and efficiently.

A great example of this is OpenAI’s Codex. Codex is an AI solution that scans and analyzes petabytes of code, questions, and answers from websites like Stack Overflow. With this tool, developers no longer need to search for answers or examples of code. Instead, Codex is directly integrated into the code completion of their IDE, saving them hundreds of hours of searching and increasing their productivity.

Creating More Creative AI

Meanwhile, systems such as Stable Diffusion and ChatGPT show how AI can take over, creating more derivative works and freeing employees up to tackle creative tasks that are still well out of reach of AI.

This isn’t to suggest that AI is an eternal solution to the skilled labor shortage. But it is a critical stop-gap that can be leaned on until the workforce grows again — something that’s projected to happen sometime in the early 2040s.

In the meantime, for organizations to maintain competitiveness as the talent shortage continues, it will be necessary to strategically integrate AI into the labor force wherever possible.

1. Don’t build your entire strategy on top of a third-party AI platform.

While there are speed-to-market benefits to third-party solutions, using the same platforms as your competitors means you’re relying on the same data and, consequently, will wind up with the same business model as everyone else.

By developing your own platform — at least in some use cases — and focusing on the data within your niche instead, you can create a cone of differentiation that protects your business and creates long-term opportunities within your niche market. This will also ensure you don’t get trapped within the vision of a third-party company rather than following your own.

2. Invest in skills acquisition over education.

To combat the skilled labor shortage, you don’t need more employees with general education. Instead, you need candidates with specific skills who can help you close the widening skills gap. Technology certifications such as AWS, Azure, and GCP are great examples of the skills required to build the necessary cloud solutions and AI platforms you’ll need to compete.

This focus on skills isn’t just about hiring. It’s also about changing your focus on internal employee training. Apprentice and licensing approaches like those used for electricians and plumbers are great models for training people in new skills as they’re needed.

3. Align your investments with global shifts in geopolitics, economy, supply chain, and demographics.

As the U.S. and the rest of the world move toward more regionalized supply chains and manufacturing, the combination of human creativity and advanced technology, such as AI and robotics, will be critical. But that will only be true if this combination is pointed in the right direction.

Make sure that your investments in AI and skills acquisition are guided by your environment rather than a desire to invest in technology for technology’s sake.

The Necessary Human Touch

In summary, labor shortages, the current supply chain crisis, and inflation that organizations and leaders face will continue to impact their operations over the next few years. The rise of AI-based solutions could be a key technology to help organizations combat those challenges and maintain a competitive edge if they adopt AI solutions and integrate them effectively with their greatest assets: human creativity and problem-solving.

The strategies I outlined will help leaders prioritize as they begin selecting and adopting those AI solutions and navigate the current and growing issues associated with the shift from globalization to regionalized supply chains and labor.

Realizing AI’s Vast Potential

It’s important to remember that today’s artificial intelligence and automation solutions are designed to enhance human capabilities and improve their potential to solve problems and create explainable knowledge. They aren’t meant to replace humans in the workforce.

Leaders who remember this and focus on the symbiosis of human creativity and AI rather than on using AI to replace people will have a strategic advantage in the decades to come.

Featured Image Credit: Provided by the Author; Unsplash; Thank you!

Daniel Williams

Principal with Pariveda Solutions

Daniel Williams is a principal with Pariveda Solutions, specializing in digital strategy, implementation, and analytics. With B.S. and M.S. degrees in Computer Science and Technology Management, he has become an expert in digital transformation and AI/ML.

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