Quarter of service businesses used AI in past 6 months, NY Fed Reserve survey shows
Garden City Center, where Armanino, an accounting firm, is expanding its use of AI. Credit: Debbie Egan-Chin
An increasing number of manufacturers and service businesses plan on using some form of artificial intelligence in the coming months, a recent survey from the New York Federal Reserve found.
Over the past six months, 25% of service businesses reported they had used some form of AI in their operations, compared with 16% of manufacturers in the same period, according to two surveys released by the New York Fed last week.
Results from the Fed’s monthly Empire State Manufacturing Survey, which goes out to roughly 200 manufacturing executives in New York, and the monthly Business Leaders Survey, which goes out 200 service industry executives throughout the state, northern New Jersey, and southwest Connecticut, were used in the AI report.
Forms of AI use referred to in the survey included virtual agents of chatbots, machine learning, text or data analytics, generative AI, voice recognition and robotic automation.
Among service firms that had used AI in their operations in the past six months, 10% reported some reduction in staffing, while 5% said the adoption of AI tools required the hiring of employees. Among manufacturers, the use of AI had no impact on staffing.
Service businesses include all industries outside of manufacturing and government, including law firms, finance, leisure and hospitality, education, and health care providers.
Looking forward, 32% of service firm respondents said they planned to start using AI tools with 19% saying they planned to hire additional staff to work with the technology. For manufacturers, 16% of respondents said they planned to adopt AI soon, with 7% saying they would hire additional staff to handle the adoption.
Molly Hays, executive vice president of Snack Tray, a Bay Shore-based manufacturer of metal trays for holding electrical cables, said AI hadn’t gotten to a point where it could directly enhance their operations.
"Some of our people use AI a little bit in writing like manuals and stuff, but AI is not going to pick up the technical information," Hays said.
"This is hands-on work," Hays said. "We don’t see any really obvious uses for it right now, but that could change."
For others, the evolution and availability of AI tools has made a tangible difference in how business is done.
Chris Gagliardi, partner at Armanino LLP, a California-based national accounting and consulting firm with offices in Garden City, said his firm had found ways to use AI to speed up some processes and help identify potential clients.
"What I can confidently say is in using AI, it’s certainly let our people be able to focus on more valuable things and not have to do some of the data heavy, manual jobs they’ve had to do before," Gagliardi said.
One way his firm has started using AI is in trying to identify potential customers. Using AI tools, Armanino has combed through public company earnings documents to find companies disclosing their need for auditing or accounting services, Gagliardi said.
"We absolutely see it as something we have to do," Gagliardi said. "If you’re not one of the leaders you’re going to be the ones in the back."
Business observers said it made sense that manufacturers might find less immediate use for AI tools, as much of the work they do was hands-on and involves proprietary processes and software.
"In terms of the adoption of AI, it’s not surprising that we see service type businesses be the first adopters," said Richard Chan, associate professor at Stony Brook University’s business school and director of the school’s Innovation Center.
Because many service businesses rely on written communications of one type or another, be it email marketing or customer service troubleshooting, large language models like OpenAI’s ChatGPT are easier to adopt into their business practices than it might be for manufacturers.
"They can simply utilize these large language models to create chatbots, to help automate the customer feedback process," Chan said.
While the overall percentages of companies using AI in their operations are small now, Chan said — unlike other digital disruptions like crypto currency or NFTs — AI use is expanding.
Chan said he expects exponential growth in AI’s use in businesses in the near future.
An increasing number of manufacturers and service businesses plan on using some form of artificial intelligence in the coming months, a recent survey from the New York Federal Reserve found.
Over the past six months, 25% of service businesses reported they had used some form of AI in their operations, compared with 16% of manufacturers in the same period, according to two surveys released by the New York Fed last week.
Results from the Fed’s monthly Empire State Manufacturing Survey, which goes out to roughly 200 manufacturing executives in New York, and the monthly Business Leaders Survey, which goes out 200 service industry executives throughout the state, northern New Jersey, and southwest Connecticut, were used in the AI report.
Forms of AI use referred to in the survey included virtual agents of chatbots, machine learning, text or data analytics, generative AI, voice recognition and robotic automation.
WHAT TO KNOW
- Over the past six months, 25% of service businesses said they had used some form of AI in their operations.
- 32% of service firm respondents said they planned to start using AI tools with 19% saying they planned to hire additional staff to work with the technology.
- Among service firms that had used AI in their operations in the past six months, 10% reported some reduction in staffing.
Among service firms that had used AI in their operations in the past six months, 10% reported some reduction in staffing, while 5% said the adoption of AI tools required the hiring of employees. Among manufacturers, the use of AI had no impact on staffing.
Ten percent of respondents to the New York Federal Reserve survey said the adoption of artificial intelligence led to reductions in staffing. Credit: Newsday
Service businesses include all industries outside of manufacturing and government, including law firms, finance, leisure and hospitality, education, and health care providers.
Looking forward, 32% of service firm respondents said they planned to start using AI tools with 19% saying they planned to hire additional staff to work with the technology. For manufacturers, 16% of respondents said they planned to adopt AI soon, with 7% saying they would hire additional staff to handle the adoption.
Molly Hays, executive vice president of Snack Tray, a Bay Shore-based manufacturer of metal trays for holding electrical cables, said AI hadn’t gotten to a point where it could directly enhance their operations.
"Some of our people use AI a little bit in writing like manuals and stuff, but AI is not going to pick up the technical information," Hays said.
"This is hands-on work," Hays said. "We don’t see any really obvious uses for it right now, but that could change."
For others, the evolution and availability of AI tools has made a tangible difference in how business is done.
Chris Gagliardi, partner at Armanino LLP, a California-based national accounting and consulting firm with offices in Garden City, said his firm had found ways to use AI to speed up some processes and help identify potential clients.
"What I can confidently say is in using AI, it’s certainly let our people be able to focus on more valuable things and not have to do some of the data heavy, manual jobs they’ve had to do before," Gagliardi said.
One way his firm has started using AI is in trying to identify potential customers. Using AI tools, Armanino has combed through public company earnings documents to find companies disclosing their need for auditing or accounting services, Gagliardi said.
"We absolutely see it as something we have to do," Gagliardi said. "If you’re not one of the leaders you’re going to be the ones in the back."
Business observers said it made sense that manufacturers might find less immediate use for AI tools, as much of the work they do was hands-on and involves proprietary processes and software.
"In terms of the adoption of AI, it’s not surprising that we see service type businesses be the first adopters," said Richard Chan, associate professor at Stony Brook University’s business school and director of the school’s Innovation Center.
Because many service businesses rely on written communications of one type or another, be it email marketing or customer service troubleshooting, large language models like OpenAI’s ChatGPT are easier to adopt into their business practices than it might be for manufacturers.
"They can simply utilize these large language models to create chatbots, to help automate the customer feedback process," Chan said.
While the overall percentages of companies using AI in their operations are small now, Chan said — unlike other digital disruptions like crypto currency or NFTs — AI use is expanding.
Chan said he expects exponential growth in AI’s use in businesses in the near future.
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