Wrestle with PESTLE: how AI is changing the workplace

Reading time: eight minutes

This LCN Says is part of LawCareers.Net’s ‘Wrestle with PESTLE (WWP)’ series, which looks at various business case studies using the PESTLE technique.

Check out the last WWP article on the podcast industry.

PESTLE stands for:

• political;
• economic;
• sociological;
• technological;
• legal; and
• environmental.

This technique involves using these six external factors to analyse the impact on a business and/or industry.

Case study: AI and ChatGPT in the modern workplace

ChatGPT has transformed the way we work and communicate, garnering widespread acclaim and sparking conversations about the potential implications of AI tools for businesses. The adoption of ChatGPT has continued to grow, setting the record for the fastest-growing user base. Just two months after its launch, it reached 100 million monthly active users.

At its core, ChatGPT is both remarkable and straightforward. It’s been trained on a massive amount of textual data, enabling it to comprehend and produce text that’s remarkably similar to human writing. This tool can answer questions and offer support for activities such as composing essays, writing job applications, and replying to correspondence, among other things. It can also help to build commercial awareness if used to analyse the impact of news reports, evolving global issues/developments (and more) on law firms and their clients.

The exceptional capabilities of ChatGPT, coupled with the ingenuity of AI developers, has resulted in an unparalleled explosion of advancements that show no sign of abating. This article provides an analysis of the external factors that are shaping the future of the modern workplace.

Political impact

The UK government has declared its unwavering commitment to a “pro-innovation approach to AI regulation” and is actively working towards driving growth by facilitating responsible innovation. Simultaneously, it’s dedicated to bolstering the UK’s position as a global leader in AI, while ensuring strict adherence to GDPR laws. This comprehensive strategy aims to cultivate public confidence and acceptance of AI, particularly in the workplace.

While the UK encourages AI innovation, the importance of privacy and data security holds significant sway, leading to interruptions or even bans on the utilisation of ChatGPT when data breaches are alleged. To mitigate these concerns, OpenAI, the company behind ChatGPT, has implemented the function of disabling the chat history and plans on introducing ChatGPT Business, offering enhanced data control capabilities.

During the Spring Budget 2023, it was announced that an allocation of up to £3.5 billion will be committed to the future of technology and science,  exerting a significant influence on their development and further adoption in the workplace. Of this amount, approximately £1 billion will be pledged specifically towards the development of supercomputers and further research in AI, with the objective of positioning the UK as a prominent technology superpower.

Economic impact 

As the global economy continues to expand, organisations are increasingly inclined to invest in AI technology to enhance productivity and maintain competitiveness. For example, Microsoft has confirmed a multibillion dollar investment in the company behind ChatGPT. Similarly, Google has invested almost $400 million in Anthropic, an artificial intelligence startup. In addition to their investments, Google also introduced Bard, an alternative to ChatGPT. Further, Meta (overhead of Facebook and Instagram) has announced plans to allocate up to $33 billion towards AI advancements this year alone. It’s already introduced tools like ImageBind, an AI system capable of integrating information from six different modalities. With the infusion of billions of dollars into AI research, development, and deployment, organisations are not only shaping the future of various industries, but also fuelling the economy with substantial growth potential.

The widespread implementation of AI technology in the workplace offers the potential to save costs and enhance efficiency, particularly in sectors such as customer service and communication. Unfortunately, this advancement may also result in job displacement. According to the World Economic Forum, it’s projected that AI will displace approximately 85 million jobs in the next five years. On the other hand, this AI revolution is expected to generate around 97 million new job opportunities in fields relating to AI development and maintenance. As organisations adapt to this evolving landscape, some are already hiring ‘AI engineers’ to assist in identifying and implementing AI tools within their operations.

The barriers to entry have significantly increased for certain businesses due to the substantial investments made in AI so far. This trend necessitates significant funding for organisations to level the playing field and attain a comparable level to the existing top-tier technologies. On the other hand, the release of ChatGPT’s API earlier in March has lowered the barrier to entry for some companies, leading to a flood of thousands of new applications entering the market.  

Although ChatGPT is currently available for free and, at most, costs $20 (£16) for unlimited usage, other AI tools can be more expensive. Nevertheless, as time progresses, technology tends to become more affordable. To illustrate this, let's consider the first commercial hard drive released 56 years ago. It had a mere capacity of five megabytes, weighed a literal tonne, and cost approximately £70,000 in today's currency, now, you can buy a hard drive five times the size for £49.99 on Argos. So, as AI becomes increasingly accessible, businesses of all sizes are likely to embrace these powerful tools, enabling them to leverage the benefits of productivity, efficiency and innovation.

Sociological impact

In the past, social media and messaging apps have reshaped the landscape of interpersonal interactions. Today, AI tools like ChatGPT are leading the way in further transforming this landscape. With the increasing prominence of AI-mediated communication, we’re witnessing notable changes in both social norms and behaviours.

The increasing adoption of AI in the workplace has the potential to exacerbate social disparities, primarily due to unequal access to these technologies. For instance, organisations in more affluent regions may have more resources to invest in AI, potentially leading to a technological divide. To prevent the deepening of social inequalities, it’s crucial to ensure equitable access to AI technologies for all.

Intriguingly, the rise of AI automation in the workplace can both induce and alleviate employee anxieties. On the one hand, concerns about job security and potential isolation can impact mental wellbeing, while on the other hand, AI has demonstrated significant potential in improving mental health diagnosis and treatment. Thus, while AI may be a source of anxiety, it simultaneously emerges as a potential aid for mental health support in this new work environment.

Technological impact

As AI and ChatGPT continue to evolve, their capabilities and potential applications in the workplace are expanding across diverse sectors. There have been notable advancements in the legal sector with the introduction of AI chatbots like Harvey, gradually revolutionising legal processes and providing enhanced support.

The use of AI also extends beyond the legal sector and is becoming increasingly prevalent in various sectors (eg, finance and healthcare). In the finance sector, AI chatbots are increasingly employed to automate regular tasks such as detecting fraudulent activity and improving operational efficiency. Similarly, in healthcare, AI is leveraged for aiding in medical diagnoses and devising treatment plans. Further integration with other technologies will lead to more opportunities for businesses to optimise their operations. For example, Microsoft plans on integrating ChatGPT into its iconic productivity tools, including Outlook, Excel, Word and Powerpoint. These changes will affect how 1.2 billion Microsoft 365 users interact with these tools.

As organisations increasingly rely on AI, ensuring cybersecurity becomes of utmost importance to protect systems and data from potential risks. This may require implementing measures that could potentially involve restrictions on ChatGPT's usage.

Legal

The emergence of AI and tools like ChatGPT in the workplace has underlined the importance of stringent data protection measures. Organisations are required to comply with existing data protection regulations such as the GDPR and the California Consumer Privacy Act, even more so when using these tools. In the UK, the proposed Data Protection and Digital Information (No. 2) Bill, a potential replacement for the GDPR, aims to regulate personal data handling, verify individuals' details, and manage customer and business data access. It also seeks to control privacy in electronic communications and oversee electronic signatures and other trust services. If enacted, this bill could have a significant impact on organisations using AI and tools like ChatGPT, necessitating a review of their data practices, privacy policies and AI strategies to ensure compliance.

The use of AI tools like ChatGPT raises intricate legal concerns regarding copyright infringement. For instance, ChatGPT's training data encompasses extensive information sourced from the Internet, some of which may be subject to copyright protection. While OpenAI maintains that it uses copyrighted material lawfully, there’s a possibility that the generated output could infringe upon an author's copyright. OpenAI imposes full liability on its users for their usage of the output, including any damages that may occur due to factually incorrect output. As a result, organisations may face legal repercussions. This concern is heightened by the fact that OpenAI limits its own liability to a maximum of $100 and doesn’t provide indemnity for third-party claims against the user.

Environmental impact

As the influence of AI continues to expand, its environmental impact grows leading to a significant carbon footprint. For example, the energy consumption required to train ChatGPT is comparable to the annual usage of 120 households. While this may appear relatively small on an individual basis, the cumulative effect becomes substantial as more companies engage in AI model training. Given the current challenges of global warming and the resulting increase in energy costs, there’s an urgent need for renewable energy solutions. Norway sets a notable example in this regard, as it successfully generates 98% of its electricity from renewable sources, showcasing the feasibility of transitioning to more sustainable energy practices.

By leveraging the capabilities of AI, organisations can embed more sustainable practices into their operations. Through the use of AI's predictive analytics, companies can fine-tune resource distribution, reducing waste and enhancing operational efficiency. For instance, AI can facilitate accurate demand forecasting, allowing companies to adjust production levels and prevent excess waste from overproduction. In addition, AI can contribute to the transition towards a circular economy by identifying opportunities for waste reuse and recycling.

The verdict

The integration of AI and specifically ChatGPT in the modern workplace undoubtedly implies a profound transformation across various business aspects. The impact of external factors is significant in shaping how companies assess and decide on their AI adoption strategies. Therefore, even though this could be seen primarily as a 'technological revolution', numerous factors and stakeholders are crucial when contemplating the broader implications of AI in the contemporary workplace. Consequently, while ChatGPT and AI tools have undoubtedly made strides, there’s a long way to go before we can fully understand and master their multifaceted implications.

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Alin George Ilinca (he/him) is a future accelerated LLB student at The University of Law.