Why Vicos (Virtual Companies) gain a competitive edge with AI
Artificial intelligence can perform many tasks more quickly and reliably. This can significantly improve a company's productivity. If they harness the new possibilities correctly, Vicos (Virtual Companies) can also be winners.
Artificial intelligence will undoubtedly have a lasting impact on the world of work. According to McKinsey’s annual report, 'The State of AI in 2022', AI tools are already in use at one in two major companies worldwide. In many areas, realising the productivity gains associated with AI has become essential in order to stay competitive in the market. In recent years, 'Artificial Intelligence as a Service' (AIaaS) has driven a surge in the availability of turnkey AI tools that provide easy access to complex functions. Users can leverage these tools via APIs without needing to write code.
ChatGPT, the chatbot program released by OpenAI in November 2022, has of course further fuelled this boom. A recent survey by IT association Bitkom of 603 companies reveals that 17 percent plan to adopt such AI applications, while a further 23 percent can envisage using them but have no specific plans to do so. Consequently, generative AI is now becoming integrated into daily business operations on a large scale. It is no longer just about optimising processes and generating new insights from data. It is now also possible to use AI tools to write texts, design images or logos, or compose melodies.
For most of our Vicos (virtual companies), AI tools have long been an integral part of their work. They use ChatGPT to generate copy, DeepL for translation and Midjourney for image design. Writers even use creative tools like Sudowrite to overcome writer's block.
A survey conducted by the freelancer portal Freelancermap in January among 854 freelancers in the German-speaking region revealed the prevalence of AI tools among freelancers. According to the survey, six out of ten respondents actively use AI-based tools. AI is most commonly used for searching for information (53 per cent) and generating text (40 per cent). By far the most widely used tool is ChatGPT, employed by 64 per cent of AI users. The areas that could benefit most from AI tools are development, tech and data, and marketing and communication.
Vicos freelancers are using AI functionalities more frequently than companies. What is the reason for this? One possible reason is the associated increase in productivity. Since freelancers are paid per project, they are more motivated to increase their productivity than employees with a fixed income. They are also more open to technological innovations because they have more flexibility. Furthermore, companies usually take longer to acquire and set up AI systems than more flexible self-employed individuals.
Indeed, in many companies, freelance experts appear to be the driving force behind the adoption of new technologies such as AI. This is demonstrated by a study published by the German Economic Institute (IW) in April. The study surveyed almost 900 companies from the IW panel in spring and summer 2022. 'The use of external personnel is a catalyst for digital transformation at the corporate level,' states the study's summary. This hypothesis is supported by the fact that IT issues are among the most common areas of application. Furthermore, the analyses indicate that freelance workers and solo self-employed individuals play an important role in implementing digital frontier technologies. For instance, 28 per cent of respondents said they use solo self-employed individuals to implement projects in innovation and digitalisation, and 56 per cent expect them to provide access to specific expertise.
The growing demand for AI expertise among freelancers is evident in the United States, too. Over the past six months, the US freelancer platform Fiverr has seen a 1400 percent increase in AI-related enquiries. "We are seeing more and more freelancers creating offers related to generative AI and using the latest tools, such as ChatGPT, GPT-3, Midjourney, Dall-E and Stable Diffusion," says Yoav Hornung, Head of Verticals and Innovation at Fiverr, as quoted by VentureBeat. Companies are particularly interested in prompt engineering experts, who communicate with AI. After all, quality, especially in generative AI, depends on how precisely tasks are formulated.
So, are golden times ahead for Vicos (Virtual Companies)? It's not that simple. No one likes to talk about it, but AI is eliminating tasks and jobs within companies. This development could also affect certain areas of the freelance community. Bloggers, SEO specialists, copywriters, proofreaders, translators, editors, logo designers, product photographers and data analysts are particularly vulnerable.
'To be honest, I’m concerned that millions of people will be out of work by the end of the year,' Melissa Shea, co-founder of the Fashion Professional Network Fashion Mingle, recently told Forbes. 'I’ve never hired a better writer than ChatGPT.' Before discovering ChatGPT, Shea regularly hired freelancers through the Upwork platform, but that’s no longer the case.
However, freelancers remain optimistic. In the aforementioned Freelancermap survey, 65 per cent of respondents believe that freelancers cannot be replaced by AI in the future, while only 18 per cent disagree. The areas most likely to be at risk are graphic design, content creation and media (25 per cent), and marketing and communication (24 per cent).
What do employers say? The survey also included 184 project providers. Of these, 63 per cent also believe that freelancers will not be replaced. They expect substitution to be most likely in graphic, content and media (24 per cent) and IT infrastructure (21 per cent) roles.
So, what does all this mean for Vicos (virtual companies)? They should definitely familiarise themselves with new AI technologies early on to increase their productivity and potentially gain first-mover advantage. At the same time, they can adopt a more proactive approach with their clients by recommending and encouraging the adoption of AI technologies. Those working in 'at-risk' areas should use the gained efficiencies to expand their expertise and portfolio of services.
Vicoland itself has also started using AI technologies that facilitate collaboration between clients and freelancers significantly.