The Business of AI Startups

Article Source: Boston University School of Law Research Paper No. 18-28, 2018
Publication Date:
Time to Read: 2 minute read
Written By:

 Lydia Reichensperger

Lydia Reichensperger



This survey of artificial intelligence (AI) startups shows that new AI systems tend to augment human capabilities rather than to displace human workers. AI systems may create professional, sales, marketing, and management jobs.


Policy Relevance:

Policymakers should ensure that social systems can help workers transition to new roles.


Key Takeaways:
  • Many studies predict that AI systems will cause substantial job losses; one study predicts that 47 percent of jobs in the United States are likely to be automated within ten years.
  • If this prediction is accurate, a survey of AI startups today would reveal many technologies in development likely to displace human workers.
  • This study reports the results of a detailed survey of commercial AI startups of different sizes across several industries and nations; the AI systems offered by these startups tend to enhance human capabilities rather than to replace humans.
    • About half of the startups strongly agreed that reducing labor costs would benefit their customers.
    • A little more than half agreed that their product would automate routine tasks.
    • AI products were most likely to replace workers in agriculture, manufacturing, utilities, and transportation.
  • Many startups report that their customers were using AI to create jobs about as often as they were using it to eliminate jobs.
    • Most jobs created were in professional, management, marketing, or sales roles.
    • Most jobs lost were in service, clerical, and manual jobs.
  • This survey suggests that mass unemployment or displacement of professional workers is unlikely; however, AI will cause a shift in work from some roles to others.
  • Jobs created by AI systems will require many workers to invest in acquiring significant new skills and endure difficult transitions.
  • Policymakers should consider whether current labor market policies will effectively address the disruption caused by changing demand for occupations and skills.



James Bessen

About James Bessen

James Bessen is Lecturer in Law at the Boston University School of Law. His studies focus on the economics of innovation and patents; he has done research on whether patents promote innovation, why innovators share new knowledge, and how technology affects jobs, skills, and wages. Mr. Bessen serves as Executive Director of the Technology & Policy Research Initiative at Boston University School of Law; and he is Director and Founder of Research on Innovation.

Rob Seamans

About Rob Seamans

Robert Seamans is an Associate Professor at New York University’s Stern School of Business where he teaches courses in game theory and strategy. Professor Seamans’ research focuses on how firms use technology in their strategic interactions with each other, and also focuses on the economic consequences of AI, robotics and other advanced technologies.