Power, disruption & the dawn of the small(er)

? This text was first published in the book The Breath of the Doing - Futures of Digital Work, released on Feb 28th 2024 by Media Evolution and Malm? universitet 's Data Society Research Programme (link ). Download/order your copy of the book over here .

? INTRO: In the discussions surrounding AI's impact on the futures of digital work, the availability of accessible AI tools marks a significant turning point for small businesses – opening doors to both unparalleled opportunities and notable challenges. This chapter explores how AI can either enhance the dominance of tech giants or empower smaller enterprises to compete more effectively. Delving into this dual possibility, I aim to highlight AI's role in the business landscape of tomorrow.

The year is 1911. Standard Oil, owned by the Rockefeller family, is disassembled by the US supreme court due to anti-competitive actions and monopolistic behaviour. The company controls nearly all the pipelines, crucial infrastructure, as well as dominating the business landscape and societal influence. The court’s decision results in a fragmentation, a split of Standard Oil into 42 separate entities, and by that, marks the end of the Rockefeller empire.

The year is 2024. Software eats the world. Tech companies are controlling our data, online presence, and—one can argue—our lives. The leading pack, including Apple, Microsoft, Google, Amazon and Meta, are often critiqued for employing monopolistic strategies. The unfair play is highlighted in legal confrontations involving smaller (not small) software companies like Epic Games and Spotify. However, unlike the story of Standard Oil some 100 years ago, the larger corporations of today remain unscathed and continue to grow their empires. Discussions about potential regulations loom, but the tech giants continue to operate with minimal restrictions.

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AI has the potential to become a game-changer for the future of work and the rise of small companies. According to a survey I conducted within the project Kickstart AI during the fall of 2023, 8 out of 10 small companies believe AI will radically change their industry over the upcoming years. Radically being the keyword here.?

The Three Horizons Framework is a foresight tool dividing future thinking into different trends, horizons; The current system, the future system and the transition that bridges the old and the new. Applying this framework to the current trends of company structures, power concentration and AI technology, I see the three horizons taking the following shape:?

The first horizon (the current system, or ‘business as usual’): A few untouchable tech giants with ‘move fast and break things’ ideologies, developing advanced digital instruments that affect us all, assuring we should not worry - ‘trust us, we’ve got this’ claiming regulation, caution and transparency will only gain dark players (i.e China, Russia etcetera).

The third horizon (the long-term successor to ‘business-as-usual’): an emerging market of small companies calling for fair competition, sustainable solutions and open-source initiatives. Together with the regulators and researchers, many are desperate for ethical frameworks, laws and restrictiveness with the new technology. For these companies, AI has the potential of levelling the competition.

The second horizon (the transition zone, activities in response to changing landscape): Still not clear, but the signals are many: EU’s AI Act and the attempts to regulate the technology; Open AI’s idea of being both a non-profit and a for-profit, within the same organisation; Both Apple and Meta releasing it’s LLM-models, Ferret respectively Llama 2, as open-source; The platform and community Hugging Faces, where developers and organisations openly share and collaborate on models, datasets, and machine learning applications.?

How will these horizons develop and overlap in the near future? Who will invest in what alternatives? Will AI technology become just another instrument for further centralisation of power and influence; or will it instead be the democratising tool and the leveller the small companies are waiting for?

Signals of change

I’ve always operated from the small player’s perspective, in a landscape where small (or even micro) independent firms compete with large (even conglomerate style) corporations. In this landscape, small companies—although nimble, passionate, swift, emphatic—are often out-manoeuvred (or acquired) by the large, heavily man-powered, lawyer-intense and seemingly unlimitedly financed giant corporate opponents. At the end of the day, the big fish always ate the small fish. And most often not because they were better, but simply because they were bigger.?

I used to work for change in the music industry. Today I work for change in the business landscape, as an innovation coach at state owned Almi with the mission to support Swedish SMEs (small and midsized companies). I spend my 40 hour workweek trying to empower, advise and develop small innovative companies. The competition they face is relentless, yet it’s part of the challenge they embrace.

Good news: the times they are a-changin. The past year or so has marked a pivotal transformation in the realm of technology, underscored by the introduction of generative AI for the masses (including small business). This emerging suite of technologies holds the great potential to revolutionise the entire game, aka the business landscape, by favouring the smaller entities over the larger colossals.?

I've devoted the past year to exploring the impact of these new instruments, at work and in workflows. For individual tasks and individual businesses, as well as the big picture. I’ve read, studied, discussed and practised. I’ve listened to developers and users, to strategists, dreamers, realists and pessimists. And I’ve supported and engaged in companies that apply AI in their businesses. The more I learn, the more I see, the stronger I believe it does possess the potential of disrupting work as we know it. Applied AI holds the potential of changing the business landscape as we know it.

If AI makes "intelligence" more accessible and available, and eventually “free”, small business can take advantage and use AI as a levelling factor with its bigger competitors. With great designed tools and workflows, this could shift the focus in the business landscape, from scale and company size; to actual value and quality of the services. We see signals of this already as AI democratises access to advanced solutions, paving the way for scalable and enhanced customer experiences with less people involved. A new era of business dynamics can occur, and the small and medium businesses can level up. For many, this shift is daunting, yet it opens up immense opportunities.?

A few signals from my past year:

• AI and the law firm. The small law firm now handles significantly larger cases thanks to AI-infused platforms that assist with managing large volumes of text. Previously, such cases were typically handled by much larger firms with sufficient staff to handle extensive preparatory work. However, with their own AI-trained system, the small firm is now able to maintain the same level of research and preparation quality, as it has become notably faster and more efficient with the aid of AI. The experienced lawyer still maintains control, guarantees quality and makes all decisions.
• Customer communication. The small industrial company with a great product but limited financial resources faces challenges in building its sales organisation and customer service simultaneously. This often becomes a bottleneck. However, by utilising an AI infused chatbot and other customer management tools, they can now generate more leads, satisfy more customers, and free up time for employees to handle the more complex issues.
• AI and autonomous innovation. The internationally acclaimed innovation agency that builds fully automated workflows for innovation using AI. From insights and market research with synthetic users, to idea generation and feasibility tests, to visual design prototypes, as well as synthetic market evaluations. Fully autonomous. And the initial results shows that these automated innovation/design sprints already deliver on par with some human innovation teams.
• AI and patents. The startup who uses AI to revolutionise the IP industry, particularly the manual process of drafting a patent. The conventional patent application has been made significantly easier with the assistance of large language models, trained on IP attorney’s insights and knowledge. What previously would take weeks or months and cost a small fortune, now can be done in hours – and for a nominal sum in this context. Resulting in the IP field opening up for more companies, more innovators, to protect their inventions and secure their business ideas.
• AI and creativity. The independent fashion designer who, instead of hiring a group of assistants and advisors in her creative process, uses AI-infused tools that she has trained with her own images, patterns, creations, and preferences, and now creates the most magic clothing together with the AI assistant.
• AI and sensitive data. The startup that automates digital meeting workflows for customers, specialising in secure transcriptions, summaries and conversation analysis. They cater to sensitive sectors like healthcare, recruitment, and research, ensuring GDPR compliance and data security. Their system seamlessly integrates into existing digital meeting platforms, providing a safe product for organisations prioritising data protection.
• AI and fair use. The startup that is challenging the liberal interpretation of copyright laws prevalent among big tech companies (which have faced lawsuits from creators). This company is pioneering a new path by training their models on their own proprietary, non-infringing datasets, developed in-house. The goal is to create a new type of business model, as well as a new type of royalty and copyright. This strategy not only promises novel applications but also ensures legal compliance, marking a significant shift in how technology interacts with creative content in these rapidly evolving sectors.

The promise: Quality overrules quantity

While large corporations can of course also utilise AI to expand their impact and markets, they often struggle with inflexible organisational structures. The dominating players do have a tendency to resist innovation due to a number of reasons, existing profitability being one of them. I see a window of opportunity for the smaller, smarter and more innovative actors. Small businesses have the edge in swiftly implementing and adapting AI solutions, thanks to their agility and minimal bureaucratic hurdles. This allows for quicker implementation and adaptability to a new landscape. For larger organisations this requires extensive restructuring, and as the dynamics change in the workplace, especially in sectors driven by knowledge work, this does not indicate a smooth sailing for many organisations.

The potential to create new products, new business models and new markets with AI, further increases the opportunity for startups and smaller enterprises. Even with limited resources, small businesses, infused by AI, have the capability to establish distinct niches in the face of larger rivals. Away from the generic, one-size-fits-all approaches, to more personalised, diversified and niche-focused products and services.

Signals show that small but high quality AI language models can outperform significantly larger ones, in specific fields and applications. They are also substantially much faster, and cheaper, to train and develop.?

The fear: Big is getting bigger

However, having said this, we must not ignore the other side of the coin. There is also a risk (fear) that big is getting even bigger. As software and digitalization continue to evolve rapidly, the giant tech companies are set to expand their reach across more industries, public services, and economic sectors. The development and integration of AI has the potential to accelerate this expansion.?

The tech giants already possess unmatched resources and incentives to invest in AI research and attract top talent. They control not just the software and data but also the access to the hardware necessary to race. They possess extensive data sets and their financial muscles and technological infrastructure make them into empires wielding unprecedented and often unfair advantages. Add to that the advanced robotics that promise to further revolutionise our world during the upcoming decades.?

What will be the implications of such concentration of power? If they control the infrastructure, the software, the interface, the product, the developers, the safeguards, the ethical discussion, the stock market and the users—then where’s room for fair competition?

The change: Small gets great

Let’s enable the alternative. A preferable future, where smaller businesses can take advantage of the new opportunity, and where AI technology can be the equaliser and leveller it holds the potential for. An approach that would pave the way for a more democratic, inclusive, and sustainable digital future, where technological gains serve the many rather than concentrating the power to a handful of corporate boards.?

Where do we start? I believe the collaborative and collective approach is key. Communities, clusters and the public at large must work together to create and endorse a transparent AI infrastructure that is accessible and reliable for everyone. Coming from a Scandinavian perspective, the idea of a state-owned system isn't far-fetched, but I do understand it sounds less appealing in other parts of the world.?

Here are some ideas of concepts for paving the way. Implementing these requires a concerted effort from all parties—small businesses, policymakers, and society at large.?

1. Work together! Taking the collective approach, building strong partnerships and fostering innovation should be a top priority for all small businesses. By forming strategic alliances, also small firms can gain access to AI resources, including hardware and expertise. By pooling, we can overcome financial and technological limitations.
2. Boost the ecosystem! We need to boost the ecosystem for innovation. Small firms, often intimately connected with their customer base, are uniquely positioned to leverage AI for rapid, human-centred and sustainable innovations. Establishing and empowering innovation hubs, incubators, labs and community networks can catalyse an ecosystem where small businesses thrive on collective cleverness. Such environments encourage the sharing of ideas and resources, fostering a culture of innovation that can challenge the giants generic/universal products and offer alternative solutions.
3. Stop selling your companies! Let’s be clear, we as entrepreneurs and startup founders play a crucial role in maintaining a diverse and competitive business landscape. We do have some cards to play, as is. I believe it's vital to resist the temptation to sell the innovative startup to the larger competitor. By retaining independence, the smaller companies can continue to drive innovation, support the local ecosystem and offer alternatives for the customers. The surrounding ecosystem and the policymakers play a crucial role in making this option more appealing to founders.
4. Legislate and regulate! It is necessary for society to support stronger regulation of large tech and AI development in order to prevent the concentration of power. This could involve considering the breakup or division of entities that dominate markets to an extent that hinders competition. It is also important to distribute the control of the technology that impacts us all, and may even have the potential to cause harm to us all.

The new era of generative AI has only just begun, yet its impact on small firms is already evident. AI technology has notably enhanced marketing and communication efforts, enabling companies to reach customers more effectively. It has streamlined administrative tasks, customer relations, accounting and sales processes. It has also proved to be a great instrument for insightful business analytics, business development and even autonomous innovation. And add to that all the new business ideas and business models in the making.

AI holds the potential to be a transformative force across most, if not all, industries. And as the technology becomes more affordable and precise, its adoption and impact will accelerate. Better designed and structured, AI can benefit a broader spectrum of the economy, ensuring a more balanced and competitive business landscape. Changing the future of digital work as we know it.

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The year is 2039. AI ate software. Big tech is bigger, a lot bigger. Regulatory measures like the AI Act proved toothless already in the late 20s. In retrospect the ‘big tech’ by then was actually quite small — didn't you see? It was in the early 30s the true ‘hockey stick’-curve occurred. Exponential growth. A small number of CEOs now control literally the whole infrastructure and digital interfaces of most services and digital products. You probably recognize the names already? Sam, Mark, Jeff, Satya. Today, early 2039, their companies remain unregulated and undivided. Did you realise in 2024, you were at a crossroad of society, of digital domination? Today, 2039, small business operate in the margins, the peripherique. Independent digital services are rare, for most people; invisible. No one talks about AI as a democratisation tool anymore.

The year is 2039 and we see a healthy business landscape where small companies flourish, drive collaboration, innovation, competition and open-source principles. The infrastructure is collectively owned, shared and managed. Trusted organisations ensure equitable access and control. Transparency and fair ethics are law. Most services are developed and implemented by small and medium-sized enterprises as they have a strong understanding of their customers' needs and preferences, and provide personalised services accordingly.

The giant tech corporations were split into hundreds of smaller entities. Stewarding the loss after these giants was a lot easier than we thought. The shift from large corporate dominance to a more diverse and inclusive business ecosystem was a walk in the park, to be honest. The choices made in the mid 20s, in terms of regulation and the new formula for collaboration and innovation, really made a difference. Today, we celebrate and shape a world where the many, rather than the few, influence and hold sway. This shift towards inclusivity and wider participation not only makes the world more captivating and intriguing but also transforms it into a far more enjoyable and fulfilling place to live and work.

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Download/order your copy of the book over here .

KALLE MAGNUSSON is an innovation and business advisor with a rich history in the creative sectors. Starting in the early 2000s, he has co-created various music companies, labels, and initiatives, many of which significantly influenced the Swedish independent scene. Additionally, Kalle practised his skills as a designer, primarily at Studio Pop, an experimental studio that developed brands and visual identities for handpicked clients. Currently, at Almi Sk?ne, Kalle supports startups and SMEs in innovation, strategy, AI, and sustainable growth. Kalle was a member of the core group in this collaborative foresight cycle.

Notes:

[ ] The breakup of Standard Oil: https://en.wikipedia.org/wiki/Standard_Oil

[ ] The successors of Standard Oil: https://en.wikipedia.org/wiki/Successors_of_Standard_Oil

[ ] The Epic win: Jury decides Google has illegal monopoly in app store fight: https://www.theverge.com/23994174/epic-google-trial-jury-verdict-monopoly-google-play

[ ] Almost 400 small businesses took part in the project Kickstart AI during the fall of 2023. The goal was to accelerate the use of AI in SMEs. The project was run by Almi Sk?ne with great help from AI Sweden and funded by Region Sk?ne. The author was the initiator and the project leader. More info: https://www.almi.se/skane/ai

[ ] The Three Horizons Framework was developed by Bill Sharpe of International Futures Forum as part of work for the UK Foresight Program’s Intelligent Infrastructures Project. Read more about it here: https://training.itcilo.org/delta/Foresight/3-Horizons.pdf or in the Book of Futures by Bespoke Copenhagen:? https://bespokecph.com

[ ] Take a look at OpenAI’s visual organisation chart. It’s a piece of… art – can be found at their website, The structure in more detail at ?https://openai.com/our-structure .

[ ] Meta releases it’s large language model as open source: https://ai.meta.com/llama/

[ ] Hugging Face is a platform with over 350k models, 75k datasets, and 150k demo apps, all open source and publicly available. Read more: https://huggingface.co/docs/hub/index

[ ] Chris Chiancone – How AI is being adopted by SMEs and how it is a priority for leading businesses. https://www.dhirubhai.net/pulse/how-ai-being-adopted-smes-priority-leading-businesses-chris-chiancone/

[ ] How Smaller Language Models Can Outperform LLMs: https://deepgram.com/learn/the-underdog-revolution-how-smaller-language-models-outperform-llms

[ ] Packy McCormick: Tech is Going to Get Much Bigger — What happens when energy, intelligence, and labor get cheap? https://www.notboring.co/p/tech-is-going-to-get-much-bigger

[ ] The robots are coming! Really? Well, check out Tesla’s Optimus, “a general purpose, bi-pedal, humanoid robot capable of performing tasks that are unsafe, repetitive or boring”.

[ ] Should the government break up large tech companies? https://wisevoter.com/issue/big-tech/

[ ] Report: U.S. Chamber of Commerce – The Impact of Technology on U.S. Small Business. https://www.uschamber.com/assets/documents/The-Impact-of-Technology-on-Small-Business-Report-2023-Edition.pdf

[ ] Cassie Robinson talked about how to design for organisational endings at 2023 years The Conference and writes about it here: Stewarding Loss Tools - https://medium.com/thefarewellfund/stewarding-loss-tools-d910f20cc2d1

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?? Thanks to hildreth england for support and editorial super skills!

Credit: This LinkedIn article features a collage with Maria Pohl's painting "Virginia Woolf," created for M?sterverk in 2018.

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