The path to generative AI value: Setting the flywheel in motion

Of course, these figures are based solely on the prospect of applying GenAI to current operating models; they don’t factor in either the cost of building and running GenAI tools or the possibility of shifting competitive dynamics. Even so, at the lowest end of the spectrum, such productivity gains could unlock potential for substantial movements in market expectations, which, in turn, are likely to drive further innovation, disruption, and reinvention—leading to entirely new modes of value creation. 

It’ll be easier to set these transformations in motion in some sectors than others. To help identify where businesses can focus their GenAI efforts most productively, we’ve taken inspiration from a mechanism dating to an earlier period of transformative change: the flywheel. 

Flywheels, from the original potter’s wheel to the concept that informs Amazon’s e-commerce machine, may take a bit of effort to get spinning. But once these virtuous circles are in motion, every subsequent addition of new energy adds to their momentum, reduces the effort needed to accelerate, and helps both preserve and transfer energy (in the form of business knowledge, experience, and capabilities). Over time, this can lead to a decrease in the cost to create—and capture—value as the momentum builds.

Business leaders can harness the power of this flywheel to improve productivity and better position their organization for transformative reinvention. However, it’s vital to remember that the impact of GenAI can stretch far beyond an uplift to the bottom line, so a responsible AI approach—one that considers the effects of business decisions on wider society—needs to be applied at every stage.