Businesses embracing technology despite AI concerns
More than 70 per cent of Jamaican firms have indicated their intention to invest in technology, even amid growing concerns about the impact that artificial intelligence (AI) will have on jobs.
The development was highlighted in the latest Jamaica Chamber of Commerce (JCC) Business and Consumer Confidence Indices provided by Don Anderson, executive chairman of Market Research Services Limited, on Tuesday.
“The vast majority of firms, 73 per cent, intend to invest in technology in order to secure the future success of their businesses,” Anderson explained as he released the data for the June 2023 quarter during a JCC webinar titled ‘The AI Effect – Reshaping Expectations, Igniting Innovation’.
The focus on the use of technology represented a new dimension to the quarterly consumer survey as Anderson explained that the JCC wanted to determine whether firms acknowledge the importance of technology for future business success.
“Industries that are most likely to invest in technology are personal care and other services. Ninety-two per cent of them said this is where they are heading: wholesale and retail, 87 per cent; tourism and hospitality, 87 per cent; construction and installation, 87 per cent,” he said.
The survey, conducted between April and June 2023 among 600 people islandwide and 100 businesses across all industries, found that eight out of 10 companies acknowledged that technology is where they planned to invest. Traditionally, firms invest more in capital to grow their businesses, but the survey reflects a change in an important consideration as well, with businesses revealing specific categories of technological investments to be able to grow.
Anderson reported that 28 per cent of firms indicated that they intend to invest in electronic payment solutions for customers and suppliers, followed by customised software for businesses. The other areas most frequently mentioned were social media marketing and GPS technology, 19 per cent and new hardware, 19 per cent.
Business confidence overall went up by one percentage point, he said, pointing out that companies were optimistic about the future of the economy and their business but didn’t think it was time to dramatically increase investments.
Twenty-three per cent of businesses, however, said their current profits were better than expected this year, compared to 14 per cent for the same period in 2022.
There was also an increase in businesses having a positive outlook for their finances and profits this year — 70 per cent and 64 per cent, respectively.
“It says that businesses are cognisant of the fact that they are putting in place things to improve their own environment to improve businesses. They believe the economy is going to be growing and noticeably good points from an index perspective over the next year, but they’re still pretty conservative and outward-looking,” Anderson asserted.
A similar observation and expectation was reflected in consumers’ responses as well. Consumers’ confidence level dipped by two per cent, which Anderson described as “a negligible decline”. Consumers’ perception of current business conditions and the economy has not really changed for 2023, as it reflected an increase of one percentage point compared to the same period last year.
“In the same period of the second quarter of 2022, consumers felt business conditions were good — 14.6 per cent felt that way, which moved up to 15.5 per cent,” Anderson revealed.
As for current jobs, Anderson has made the point consistently in each presentation over the years that consumers have never felt that jobs were plentiful. For the second quarter of 2022, 12.7 per cent of Jamaicans surveyed said jobs were plentiful as the country came out of COVID-19, while for the second quarter of 2023 that number fell to 11 percentage points, and fewer consumers are optimistic about the availability of jobs. Those who felt jobs were in short supply fell from 51.6 per cent in 2022 to 47.4 per cent.
The survey also found that 27.2 per cent of respondents believe that conditions for business are better this year, a decrease from the approximately 33.8 per cent who held the same view over the same period last year.
“We find that consumers’ perception is on a kind of a roller coaster, if you wish, because against the background [of] the feeling that the economy is going to get better, businesses are going to improve their performance and that jobs are not going to be plentiful… they still expect their incomes to improve,” said Anderson.
According to the survey, consumers revealed intentions to purchase more this year, with vacations, vehicles, and homes topping the list.
In 2019 consumer confidence was at an all-time high at 180.2 points. It dipped to 160 points in 2022, and slipped marginally to 159 points in the second quarter this year.
As for future expectations, 20 per cent of consumers felt that over the next 12 months the economy would get better, a drop from 21.8 per cent in the first quarter of 2023. At the same time, a number of people felt the economy would get worse, with high cost of living cited as a huge concern among consumers, along with high interest rates and high crime rates.