Innovation Value & Hype Cycle
Innovation such as AI follows a Value and Hype Cycle.
OpenAI’s new model Orion is reportedly not as big of a step forward as the previous models. This has caused a lot of questions being raised about a potential AI bubble as well as a general increased skepticism towards AI.
This is to be expected, and the continuous exponential growth of the core technology is not the primary factor to drive AI innovation going forward.
In this chart I’ve summarized what stages innovation often goes through. The hype curve is well known thanks to the work done by Gartner in this space. The value curve is what I find more interesting.
In the beginning of the acceleration of disruptive innovation, expectations accelerate rapidly, driven also by an explosion of pilots, various use cases and investments. We have seen this for quite some time with regards to generative AI now.
After this, disillusionment and skepticism starts to enter the stage, driven by for example news around a lower improvement of new AI models than expected. What many miss at this stage is that the value is not just depending on a continuous accelerated development of the core technology. Instead, a major contributing factor that accelerates innovation is the adaptation of the ecosystem surrounding the innovation. After all, innovation is dropped into an ecosystem completely adapted to the old way of working. As the ecosystem starts to adapt, for example in terms of system integrations, knowledge, processes and ways of working, the actual value of the innovation can start to grow, and over time move into a continuous stage of gradual improvements.
My question to everyone right now is: How do you define value? Many people, organizations, companies and governments struggle big time with this. I believe we need to significantly increase the invested time in figuring out how we define value instead of doing just one more pilot. The value question goes back to measuring the effect and benefits of AI, or simply put: What do you want? I know what I want to optimize for as my own and society’s overarching KPI: Sustainable wellbeing.
How do you define value?