I would single out as the cause of complexity (the C in VUCA) of the global, regional and local environments faced by business the advent of the so-called Industrial Revolution 4.0 which encompasses such new technologies as Artificial Intelligence, Robotics, Internet of Things and Data Analytics.  Despite our being the least digitalized among our peers in the Indo-Pacific region, already AI, for example, is reshaping how business is conducted in the Philippines today, even among the SME sector.  There is a lot of talk about the coming AI bubble that can impact negatively on Philippine business, big or small.  There is a comparison to the dotcom bubble during the late 1990s and the beginning of the new millennium.  Already what happened in Wall Street last November 7, 2025 is a harbinger of the possible AI bubble.  US tech groups closely tied to the AI boom lost more than $1 trillion in market value, putting Wall Street on course for its worst week since Donald Trump’s  “liberation day” tariffs in April 2025.  The market value of eight of the most valuable AI-related stocks—including Nvidia, Meta, Palatir and Oracle—had fallen $1.2 trillion.  The declines had left the tech-heavy Nasdaq on course for a weekly loss of 4.6 percent, its worst five-day run since the Index fell 10 percent after Trump launched his trade war.

In a very insightful article, BW fellow columnist Reynaldo C. Lugtu explained the circumstances that may lead to an AI bubble in the Philippines.  In the article entitled “The Coming AI Bubble,” he gave fair warning to business firms about not being carried away by the promises of AI.   In his words, “Companies chase AI for the sake of saying they use AI.  They buy systems that they don’t need.  They replace workflows even when the old ones remain more reliable.  Others bet their entire strategy  on something no one has tested in real world conditions.  In the dotcom era, firms poured millions into fancy websites that delivered no results.  They wanted to look modern.  Today’s version is signing up for expensive AI tools and hoping they magically improve productivity without real planning.”

On the side of the consumers, Lugtu admits that AI can offer conveniences and benefits never before experienced. AI can write documents, gives advice, help students study, and even suggests what to buy.  From my own personal experience, because of the instant manner with which ChatGPT can make available to me data and information of which I already have knowledge from previous reading and research, writing a column takes half as much time today compared to the time that I did not have access to this AI tool.  There is no danger that I will be victimized by false information or invented data because I only accept what is already known to me as true. AI just facilitates my remembering information that is already stored in my brain, a very important service to ageing people like me.

At a more comprehensive level,  AI offers benefits like increased efficiency through automation, improved decision making, enhanced innovation, and personalized experiences. On the liability side, it presents risks, including job displacement, ethical biases, privacy concerns, and a lack of human accountability.  AI automates repetitive and time-consuming tasks across industries (e.g. manufacturing, customer service, data entry, etc.) allowing human workers to focus on more complex, creative, and strategic activities.  AI systems can analyze vast amounts of data at high speeds to identify patterns and trends, providing valuable insights and helping organizations make better, more data-driven decisions with reduced human error. Especially in health care, with focus on the health of senior citizens, AI technology can lead to faster and more accurate diagnostics, personalized treatments plants, drug discovery, and robotic surgery assistance, all of which can lead to better patient outcomes and lower costs. 

AI is being used to help mitigate climate change, optimize energy consumption, improve agricultural yields, and strengthen cyber security defenses against threats.  AI can operate in hazardous environments (e.g. space, deep sea, bomb disposal) and monitor workplace safety, reducing risks and injuries for humans.   AI algorithms tailor experiences to individual preferences, from educational content and entertainment recommendation to personalized financial advice and marketing campaigns.

There are, however, significant risks about which potential users of AI should be fully aware.  AI systems learn from the data used in their training.  If these data contain historical or societal biases, the AI perpetuate and even amplify these discriminatory outcomes in critical areas like hiring, loan approvals, or law enforcement.  There are also privacy and security concerns.  AI requires access to large datasets, which raises important privacy concerns.  Some data are vulnerable to breaches, unauthorized access, or misuse, which can have severe legal and reputational consequences.  Also, many advanced AI models operate as “black boxes”, meaning their decision-making processes are not easily understandable.  This lack of transparency makes it difficult to assign responsibility when errors or harm occur.

For the beginners, it may not be obvious that developing and implementing advanced AI systems can be very expensive, which may widen the gap between large corporations or developed nations that can afford the technology and smaller entities or developing nations that  cannot.   At its worse case, malicious actors and criminals could use AI for harmful purposes, such as creating convincing deepfakes for misinformation campaigns, automating sophisticated cyberattacks, or developing autonomous weapons systems with life-and-death decision-making capabilities.  AI can also destroy the reputations of honest and good people by creating very realistic-looking videos presenting these people in a bad light.  Many of us Filipinos have been so dismayed by the appearance of  obviously false stories created by AI presenting our very beloved Cardinal Luis Antonio Tagle in a bad light, especially as regards his relationships with the Supreme Pontiff, Pope Leo XIV.  Another more recent example is the way the British Broadcasting Company (BBC) doctored reports on how President Trump reacted to his defeat to President Biden in the U.S. Presidential elections last January 2022.  These are among the worst uses of AI.

 Given all these complex issues involving the potential benefits or harm of AI to the business world, it is incumbent on every business leader (entrepreneur, executive, manager) to practise what they are preaching to their respective employees, i.e. that they have to constantly upskill, reskill and retool themselves through short courses or training programs.  No matter how forbidding AI may sound, especially to managers and executives who consider themselves weak in mathematics or quantitative analysis, there is no way one can run a modern enterprise, whether large, medium or small without having a minimum understanding of the various uses of AI in the business world.  There are myriad of short training programs offered by universities, consulting firms, technical training institutes, some lasting for a few hours or days (similar to the ubiquitous seminars on corporate governance which are obligatory for board directors of listed companies).  For example, last April 2025, I accompanied a group of some 30 top executives from the Philippines to travel to Barcelona, Spain to take a three-day training seminar on AI at the famous IESE Business School, one of the top business schools in the world today, whose leadership is especially in the area of customized executive education programs. Not only did the Filipino executives learn some important uses of AI in their respective industries.  They also obtained some very valuable guidelines on how to supervise the use of AI and other digital tools by their children so that they don’t end up like the 14-year-old boy in Florida, USA, who committed suicide under the instigation of AI.  To be continued.