Three-quarters of tech leaders suffering from GenAI FOMO

09 April 2024 Consultancy.uk 4 min. read

With hype around generative AI continuing to mount, 75% of business leaders are afraid that their firm might be missing out on the technology. However, a new study from Wavestone suggests that ‘first movers’ for the technology are overstating their hand – and that businesses should take care to build a business case for it, rather than investing for investment’s sake.

Fear of missing out (FOMO) was a term first introduced in 2004, to describe a phenomenon observed on social networking sites. It centres on two processes. Firstly, perception of missing out – belief that an individual is somehow out of the loop, and in danger of missing out on life-changing interactions. This is then followed by compulsive behaviour, over-compensating in order to maintain the social connections perceived as being strained – ironically often straining them more than actually might have been.

In the years since, FOMO has also increasingly been perceived in the world of business. Weaponising the apparent human tendency toward fear of missing out, producers of new products often weaponise ‘FOMO marketing’ to drive consumer engagement, urgency, and action. It typically includes messaging that triggers a target audience's innate fear of missing out to make them more likely to convert. But like the original context of the word, this is not always a useful instinct – and some might argue that more often than not, it lumbers business leaders with an expensive ‘next-big-thing’ that is completely defunct soon after.

Three-quarters of tech leaders suffering from GenAI FOMO

Source: Wavestone Global Technology & Data Leaders Survey 2024

With the FOMO phenomenon already ensnared countless executives over the last decade when relating to cryptocurrency, blockchain, the internet of things, NFTs, and the metaverse – part of a broader ‘digital goldrush’ which has so far not delivered on the hype – a new study suggests leaders are falling for the same old tricks when it comes to artificial intelligence. Having polled 600 senior and board level technology leaders, consulting firm Wavestone has found that 75% of bosses in Europe, the US and Asia are experiencing ‘generative AI FOMO’ in particular.

When asked to define their organisation’s GenAI strategy, 39% said the technology forms a significant part of their overall AI strategy. Meanwhile, 35% said they had taken the time to develop a separate GenAI policy from their regular AI strategy to devote even more time to it. In spite of this, a majority of firms still see themselves as laggards – with a 53% majority also saying they believe they are less prepared than they should be.

However, Wavestone’s research suggests that the reality of the situation is that all firms are roughly in the same boat. This FOMO grows mostly from reading stories of other firms trying to highlight their ‘first mover advantage’ when it comes to GenAI. For example, the researchers highlighted one company announcing it had “rolled out a GenAI chatbot to 75,000 employees”. While this might lead to other companies worrying about what they are missing – and splurging on tech they might not actually need as a result – the researchers instead caution that “this is more a PR stunt to generate headlines than a fully thought-out initiative to augment human capabilities”.

To what extent do you agree or disagree with the following statements

Source: Wavestone Global Technology & Data Leaders Survey 2024

This corporate FOMO is often an illusion – progress on GenAI adoption is being made in some areas – for example, individual productivity (‘Copilots’), content creation, customer relationship management – but it will be some time before most organisations realise substantial business impact. In the meantime, firms might want to consider exactly what their business cases are for leveraging the technology – making sure they are not simply investing for the sake of it. Wavestone also found that UK respondents were typically less enthralled with GenAI hype than their continental counterparts – suggesting they may be better positioned to make these slower, more calculated calls on future GenAI investments.

When asked for a response to the statement ‘GenAI is a real gamechanger that will deeply disrupt the way we work and do business’, just 57% of UK respondents agreed, compared to 78% in Asia, 71% in the US, 64% in France and 63% in Germany. UK respondents were meanwhile most likely to be concerned about regulatory requirements. Around 34% of UK respondents stated ‘regulatory requirements’ are a risk associated with GenAI, compared with 27% in the US, 24% in France, 21% in Asia and 20% in Germany.  

Speaking on the findings, Shakti Mohapatra, an associate partner with Wavestone UK, commented, “This is not necessarily a sign of scepticism, rather an indication of the UK’s 'fast follower' approach that we have seen with previous disruptive innovations. The heightened awareness of the regulatory landscape shows the UK’s commitment to cautious and compliant technological progression, ensuring GenAI is implemented responsibly and ethically.”