The average U.S. business spent $206,383 on capital expenses in 2021, but some types of businesses are more expensive to operate—and more capital-intensive than others.
Whether a business requires brick-and-mortar space, is run online, or consists of providing services is one key factor in determining the amount of capital funding needed. There are many factors that affect capital costs, including direct capital expenses like physical office space, the local real estate market, and equipment. But other factors also indirectly affect capital costs, such as licenses, insurance, professional services like accounting and legal counsel, inventory, number of employees, and marketing needs. When starting a small business, owners need a detailed accounting of their expected capital expenses and startup costs to present to investors and lenders.
Using Census Bureau data, altLINE ranked industries by their average capital expenditures in 2021 and charted the distribution of startup or acquisition capital funding needed in each one. Averages are calculated as total capital expenditures over the total number of business establishments in that industry—not just businesses that used capital funding. The charts showing how many companies in an industry required particular amounts of startup capital expenses are based on 2017 data, which is the latest available with that level of detail, and may show some differences from newer averages based on more recent economic changes.
The distribution charts are based on 2017 data, the latest available in that format, and may show some differences from newer averages based on more recent economic changes.
Keep reading to see the typical capital used to start a business as well as the average yearly cost to run a business in 18 different industries, ranked by average annual capital expenses from lowest to highest.
#18. Accommodation and food services
– Average capital expenditure per establishment, 2021: $41,377
– Total 2021 capital expenditures industrywide: $25.6 billion
The accommodations and food services industry includes hotels and other types of lodging as well as restaurants and bars—all of which require a physical location. The most common range for startup costs in this industry is $100,000 to $250,000, with 17.4% of hospitality businesses reporting their startup costs fell in that range. For hotels, unique capital expenses include real estate—the location will determine the cost as well as the hotel’s ability to attract guests—and room furnishings. The more high-end the accommodations, the more the owner can charge per night.
Restaurants and bars will need to invest in specialty kitchen equipment and possibly a liquor license. The type of cuisine and dining experience can affect capital expenses as well as revenue potential.
#17. Professional, scientific, and technical services
– Average capital expenditure per establishment, 2021: $48,373
– Total 2021 capital expenditures industrywide: $30.9 billion
This is a service provider industry that requires specialized expertise and training. Professionals in this sector can include attorneys, accountants, architects, engineers, computer services, consultants, researchers, photographers, translators, and veterinarians, among others.
More than one-quarter of firms said they launched their business with $5,000 or less in capital funds. These small business owners may offer their services online, perform their services at their clients’ locations, or operate out of a brick-and-mortar location; the type of business will affect capital expenditures. This industry will likely require more investment in professional certifications and licenses. Specialized service providers may be able to operate as a one-person venture or employ a small team, which reduces capital expenditures.
– Average capital expenditure per establishment, 2021: $57,558
– Total 2021 capital expenditures industrywide: $46.6 billion
The construction industry includes small business owners who construct buildings, engineer highways and utilities, and prepare land for new construction. Capital expenditures—which 22.4% of firms said were $5,000 or less—involve purchasing the necessary equipment and securing a place to store it when not in use. Business owners should be prepared for the ongoing capital expense of maintaining company vehicles to transport equipment and workers to job sites. A physical office space may be needed to meet with clients.
#15. Administrative and support and waste management
– Average capital expenditure per establishment, 2021: $59,720
– Total 2021 capital expenditures industrywide: $44.9 billion
This is a service provider industry that offers routine support for the day-to-day operations of companies and households. Small businesses in this sector may offer office administration, hiring personnel, clerical services, soliciting new business, collecting payments, surveillance, cleaning, and waste disposal. The most common range for startup costs was $5,000 or less, a cost range reported by about 23% of businesses. A brick-and-mortar location will be less important for these businesses because they often provide services at their clients’ locations. But equipment may be expensive.
#14. Wholesale trade
– Average capital expenditure per establishment, 2021: $103,469
– Total 2021 capital expenditures industrywide: $26.7 billion
Wholesalers sell merchandise to other businesses, and 12.7% reported they started their business with $5,000 or less. Most of the capital expenses are related to purchasing inventory, maintaining warehouse space to store the merchandise, and having vehicles to transport the merchandise. The type and volume of inventory will determine how much capital funding small business owners need to have on hand. More than a specialized license or training, wholesale trade often depends on the owner’s relationships with buyers—and there’s no way to put a price on that when calculating capital expenses.
#13. Retail trade
– Average capital expenditure per establishment, 2021: $116,051
– Total 2021 capital expenditures industrywide: $40.4 billion
Similar to wholesale trade, inventory is one of the main capital expenses in retail. However, more retailers, 13.5%, reported higher startup costs—in the range of $100,000 to $250,000—than wholesale traders. E-commerce and social media advertising have given many small business owners the option to run their retail businesses entirely online, without a physical location. There are trade-offs in terms of capital expenses. Where brick-and-mortar stores will need to consider real estate costs, online-only businesses will need to invest in sophisticated website design with an online sales system, more digital marketing, and shipping.
#12. Arts, entertainment, and recreation
– Average capital expenditure per establishment, 2021: $118,454
– Total 2021 capital expenditures industrywide: $120.3 billion
Arts, entertainment, and recreation is a wide-ranging industry that runs the gamut from a freelance graphic designer with relatively low startup and capital expenses to a large amusement park requiring much more significant financial investment. Businesses that produce or promote live performances, events, and exhibits; preserve historically, culturally, or educationally significant objects; or offer recreational, amusement, and leisure activities are all part of this industry.
More than 20% of businesses in this industry report startup costs of $5,000 or less. Small business owners should be prepared for capital expenses related to service equipment, as arts and entertainment success often depends on quality customer experiences. Recreational businesses will have more capital expenses related to specialized equipment needed for certain sports and hobbies.
#11. Health care and social assistance
– Average capital expenditure per establishment, 2021: $120,186
– Total 2021 capital expenditures industrywide: $18.5 billion
The health care and social assistance industry includes various types of medical practitioners and social workers. Many of these businesses will need brick-and-mortar locations such as hospitals and residential care facilities, which is where capital expenses come in—and they may also need specialized equipment as well. Still, the most common range of startup costs is $5,000 or less, as reported by 12.7% of firms in this industry.
#10. Agriculture, forestry, fishing, and hunting
– Average capital expenditure per establishment, 2021: $131,371
– Total 2021 capital expenditures industrywide: $113.9 billion
This industry includes farms, ranches, dairies, greenhouses, nurseries, orchards, and hatcheries. Real estate is a high priority, as the plot of land will determine what type of crop or animal can be raised there. Maintaining the business’s physical location will be a significant capital expense, as will purchasing and maintaining specialized farming equipment. Still, it’s most common for this industry to report startup costs of $5,000 or less, as 11.5% of firms did. Part of the reason for this lower financial barrier to entry is that a significant share of farmland is passed down through families and avoids the typical costs associated with large real estate purchases.
#9. Management of companies and enterprises
– Average capital expenditure per establishment, 2021: $156,476
– Total 2021 capital expenditures industrywide: $3.1 billion
Businesses in this industry inform management decisions and handle strategic and organizational planning and decision-making. These service providers are typically hired when companies scale up. Startup costs are often high, with 9.3% of businesses in this industry reporting they spent $3 million or more to launch. Small business owners in this space are more likely to need people—specialized professionals like accountants, bookkeepers, and financial managers—than an office or other capital equipment.
#8. Educational services
– Average capital expenditure per establishment, 2021: $258,412
– Total 2021 capital expenditures industrywide: $8.1 billion
Educational services is the first industry in this ranking where average annual capital expenditures exceed the national average for all businesses of $206,383. Schools, colleges, universities, and training centers fall into this category. One-fifth of education businesses report relatively low startup costs of $5,000 or less, which may reflect new online learning opportunities. Schools with a physical location will need to invest in real estate and building maintenance. Education businesses also have significant noncapital expenses, as educators must obtain specialized credentials.
#7. Transportation and warehousing
– Average capital expenditure per establishment, 2021: $335,761
– Total 2021 capital expenditures industrywide: $28.8 billion
This industry includes businesses that transport people and cargo, warehouse and store goods, and provide transportation for sightseeing. For transportation companies, a significant capital expense will be purchasing and maintaining a vehicle fleet, whether that’s trucks, cars, planes, boats, trains, or pipelines. Warehouse businesses will need physical space to store goods. Thirteen percent of businesses in transportation and warehousing said their startup costs were between $10,000 and $25,000.
#6. Real estate and rental and leasing
– Average capital expenditure per establishment, 2021: $347,041
– Total 2021 capital expenditures industrywide: $93.7 billion
This industry includes professionals who help people buy and rent real estate; businesses that lease vehicles, equipment, and other tangible assets; businesses that lease intangible assets like patents and trademarks; and real estate management companies. Small business owners running a real estate company may have a brick-and-mortar location or connect with clients online, which creates a range of capital funding needs.
Businesses leasing vehicles or equipment should plan on capital expenses related to assembling a fleet of vehicles and carrying insurance that covers the lessees. Businesses leasing intangible assets will likely have lower capital funding needs. Most commonly—for 19.2% of firms in this industry—startup costs are $5,000 or less.
#5. Finance and insurance
– Average capital expenditure per establishment, 2021: $363,968
– Total 2021 capital expenditures industrywide: $158.3 billion
Finance and insurance businesses are involved in making loans, purchasing securities, taking deposits, underwriting insurance policies and collecting fees, and providing specialized services related to employee benefits and related financial and insurance needs. Among the financial and insurance businesses, 16.4% of firms say their startup costs were $5,000 and less. Capital funding needs in this industry likely include maintaining a physical location to meet with clients and conduct business.
– Average capital expenditure per establishment, 2021: $997,032
– Total 2021 capital expenditures industrywide: $174.3 billion
The manufacturing industry includes any business that transforms materials, substances, or components into new products. This consists of businesses typically associated with manufacturing like plants, mills, and factories as well as bakeries, candy stores, and custom tailors.
The amount of capital funding required to run these types of businesses varies depending on the materials used, the sophistication of the manufacturing process, and the types of machinery required. Nearly 10% of businesses in this industry had startup costs in the range of $100,000 to $250,000 while another nearly 10% had startup costs of $5,000 or less. Whatever the type of business, manufacturers will likely need to invest in a physical location for their business.
– Average capital expenditure per establishment, 2021: $1,200,277
– Total 2021 capital expenditures industrywide: $282.2 billion
The information industry includes software publishing, entities that publish information online, movie production, sound recording, broadcasting, telecommunication, web search portals, data processing, and information services. Much of this work can be done online, so small business owners may not need to spend capital funding on opening a physical location. Significant capital expenses in this industry include building out a communications infrastructure, software licensing, and data security systems. The most common range of startup costs for information firms was $5,000 or less, which was reported by nearly 19% of firms.
– Average capital expenditure per establishment, 2021: $3,954,703
– Total 2021 capital expenditures industrywide: $194.5 billion
Mining refers to businesses that extract, quarry, and treat minerals and energy sources including coal, gas, and oil. Similar to the agricultural industry, the physical location of these businesses is a top priority as the plot of land will determine how much of a given substance is available for mining. Real estate and specialized equipment are significant capital expenses. Just over 8% of mining businesses launched with $5,000 and less, while another 7.7% spent $100,000 to $250,000 on startup costs. Mining is a risky venture given the high annual capital expenditures combined with the volatile pricing of metals and other mined substances.
– Average capital expenditure per establishment, 2021: $8,934,359
– Total 2021 capital expenditures industrywide: $91.1 billion
Utilities have the highest annual average capital expenses. This industry includes companies that provide electrical power, natural gas, steam, water, and sewage removal. Sizable capital expenses are related to the technology and equipment needed to generate the utility and the complex infrastructure needed to deliver it to consumers. In addition, these businesses also need licenses, insurance, and skilled employees to do this work. Capital spending is expected to increase in the coming years as utility companies shift to cleaner energy production.
Data reporting by Paxtyn Merten. Story editing by Jeff Inglis. Copy editing by Tim Bruns.
This story originally appeared on altLINE and was produced and
distributed in partnership with Stacker Studio.
mesh conference goes deep on AI, with experts focusing in on training, ethics, and risk
The mix of topics is a major part of the appeal. So is the opportunity to have genuine conversations.
The mix of topics is a major part of the appeal. So is the opportunity to have genuine conversations with senior leaders, and doers, across so many industries for two days.
Day one of the mesh conference was all about navigating innovation, privacy policies, and diversity in a tech-driven world, and day two was all about artificial intelligence (AI) and its impact on media, marketing, business and society.
AI is everywhere, but this day hit different.
“I sat beside a marketer this morning who said he came to mesh because he was interested in the topics, but that he also knew lots about the subject matter so he wasn’t sure how much he’d take away,” said mesh attendee, Sarah Coleman who travelled from Calgary to see mesh in Toronto.
“But after a full day of talks, he said to me that he was totally surprised by the cross-industry perspectives shared, and he walked away from the first day with thoughts he had never considered. For me, that’s the biggest value of mesh and it’s why I travelled across the country for my second mesh conference this year.”
Day two opened up with a frank discussion about the training of artificial intelligence (AI) and data sources with Elena Yunusov, AI strategy and marketing leader with the Human Feedback Foundation.
Yunusov recently started the foundation to crowdsource the human feedback layer that’s missing from private AI models. Private models will continue and make decisions we won’t agree with, she said, but open source initiatives offer the chance for more innovation and better-informed applications.
“We should have more say about how AI is shaped and developed,” said Yunusov.
There are a handful of models influencing us in ways we may not understand. But the Human Feedback Foundation is a small, but mighty open-source project trying to make AI less toxic and more empathetic.
Use human feedback to bring the human voice back into data
After opening remarks, Yunusov continued the AI discussion with Darnel Moore, founder and CEO of Distinct.ly, who sees technology as a tool to connect with people. “We need a way for people to see each other and for businesses to see those people,” said Moore.
Businesses just want to see the data point — not its context. But cognitive bias tells us that time, place, and situation influences people’s decisions, so the data means nothing without context.
Moore said somewhere along the line people became a bug, rather than a feature, for businesses and that needs to change.
“It’s important to get yourself out of the loop of data and buzzwords,” he Moore.
It’s hard when you’re driving hard and fast not to attach yourself to buzzwords. But it’s not about pitching, selling, or moving your product — it’s about connecting with people.
Both Yunusov and Moore expressed puzzlement around the anxiety many people have around AI handling routine tasks.
“Machinery is levelling human beings up from the mundane,” said Moore. People can now be more creative and learn in ways that weren’t possible before, he added.
“We have agency in this and the tools we never had before to get us to the next stages of that journey,” added Yunusov.
We’re living through a bit of a reckoning in tech, she notes. Things are going to change, but how they change should be up to us.
“Change is part of the human experience and we’re just doing it with different tools now,” said Yunusov.
AI is a very divisive concept
Rika Nakazawa, global vice-president with NTT’s New Ventures and Innovation team, joined mesh fresh from COP28’s World Climate Summit in Dubai where there were two camps — one that believed AI is going to be the end of our ability to attain sustainability goals, and the other that thought it would bring the dawn of a new horizon.
Amy Peck, founder and CEO of EndeavorXR, agreed. On one end of the spectrum, it’s the great saviour. We’ll be able to leverage it and achieve all our goals, she said. On the other end is the doom and gloom.
Peck said business leaders need to start understanding data better, urging for bias-free data to be the foundation for AI training algorithms. We’re equal in our humanity, said Peck, so we must learn to embrace our differences rather than vilify them.
“AI is an overnight success, 80 years in the making,” said Nakazawa. “There’s nothing artificial about artificial intelligence.”
It’s all made — binary code is mimicking our brain.
“We have to retrain ourselves to work with AI and not just hand over our tasks to AI,” Peck said.
We needed to manage and prevent food waste
For this event, the mesh conference partnered with Second Harvest to ensure unused food served at lunch would not go to waste. Using Second Harvest technology, unused packaged lunches were donated to a local charity.
“It’s the eHarmony of food,” joked Lori Nikkel, CEO of Second Harvest during a fireside discussion.
Nikkel was joined by Winston Rosser, VP of Food Rescue Operations at Second Harvest, who demoed the technology built to help conquer food insecurity and food redistribution.
Rosser explained that the app connects a variety of donors, from small retailers to major grocery stores, with local, non-profit charities who need food. Before the platform was built, huge trucks were sent to pick up 20 lbs of food from a grocer and take it across the city — an option that was not sustainable. Now, donors can easily connect with one of more than 61,000 charities via the platform.
Rosser also shared some startling stats:
- 58% of all the food produced in Canada is lost or wasted, mostly ending up in landfill.
- 3.9 million Canadians are food insecure.
- Only 4% of food businesses were donating food.
Since the launch of the app, Second Harvest has flipped everything on its head. In 2016 the organization rescued nine million pounds of food, but after the app was deployed, that number skyrocketed — in 2022, nearly 75 million pounds of food was rescued in 2022. Last year Second Harvest kept food worth $234 million out of landfill.
When asked why there’s so much food waste to begin with, Nikkel offered a sober response: “We don’t value food,” she said, adding that we’ve commoditized food to the point where we don’t value it like we used to. An example: many people will buy food in a two-for-one deal even if they don’t need it, and oftentimes it’s simply thrown out.
Adoption requires sponsorship within the organization
Afternoon discussions on day two of the mesh conference also looked at laggard industries, and professionals who can be resistant to change.
Colleen Pound, founder and CEO of Proxure, and Mary Jane Dykeman, managing partner at INQ Law, talked about the difficult task of integrating AI in law and healthcare — two industries that can be averse to technological innovation.
“Their aversion creates a lot of white space to work in,” said Pound, adding that progress looks like evolution rather than revolution.
Dykeman agreed, adding that change in situations like this often takes a foothold when a series of low-risk initiatives are the starting point. Ultimately, they can lead to larger transformations.
In addition, privacy and data security are major issues for both industries that need to be managed first, Pound said. Data management is the starting point.
“Better data and better processes drive better business outcomes,” Pound said.
AI is what you make it
The day’s closing panel included a conversation on AI in media, featuring mesh co-founder and media pundit, Mathew Ingram.
Ingram joked that he would be terrified if he was starting his journalism career today. As the chief digital writer for the Columbia Journalism Review, Ingram noted that distributing information is easier today, but distributing disinformation is also easier.
“The quality of the disinformation doesn’t matter,” Ingram said, saying people believe disinformation because they want to believe it.
“A nine-year-old could think of a more plausible conspiracy theory than some of the ones I’ve seen people believe,” he said.
Chris Hogg, president and founder of the content marketing firm Digital Journal Group (DJG), said he sees B2B content marketing rolling back to what high-quality journalism used to offer. Hogg said success can now require businesses to produce less content, and instead focus on quality and distribution to stand out and drive results.
The fireside discussion also looked at the risks AI poses to the media industry.
AI may not always be able to make things better, but it has great applications as a technology to support journalists.
“It’s a tool that you can use and do things that help you and are valuable,” said Ingram, noting that transcription, story idea generation, and automating mundane tasks are big benefits offered by AI.
While there are considerable risks with OpenAI’s accuracy, deep fakes, and fake AI content, Ingram said the technology is still important.
“I’m a big believer in the power of individuals to change things,” he said. “There are things we thought would be inconsequential, but have changed the world, for better or worse.”
Join us next year in Calgary for the mesh conference, June 11-12, 2024. The two-day event then returns to Toronto the week of October 21, 2024.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
mesh conference hits Toronto this week — here’s what’s in store
This week, innovators and digital transformation leaders from across North America will gather at the Symes in Toronto for the mesh conference.
This week, innovators and digital transformation leaders from across North America will gather at the Symes in Toronto for the mesh conference. With a focus on four threads — business, media and technology, society, and marketing — mesh will connect, share, and inspire others to think about changing how we think, organize, operate and behave.
The mesh conference differs from your typical transformation and innovation event in part thanks to two simple rules: no slide decks and canned presentations, and no pay-to-play sessions. The result? Lively sessions where the audience is encouraged to engage with speakers throughout.
The theme for this edition is “Human-powered, tech-enabled.” Speakers and attendees will explore the pivotal role of technologies in augmenting human capabilities to improve workplace diversity, enhance competitiveness, and even turn back time on human-induced environmental damage through “de-extinction”.
The full mesh speaker lineup
Over the course of two days, more than 20 speakers will take part in the Toronto event on December 6-7, 2023. The full run-of-show, with speakers and sessions, includes:
Canada’s digital policy has gone off the rails. What should the engaged community be doing?
Dr. Michael Geist (Canada Research Chair in Internet and E-Commerce Law, University of Ottawa) will join Tyler Chisholm (clearmotive marketing) to discuss the Meta ban on news, Google’s newly announced search policy around news (backed by $100 million for the industry) and podcasting regulations. Dr. Geist will explain why he has described the law as a “total policy disaster” and an “epic policy blunder” by the government. On the heels of his testimony before the CRTC, he’ll share his insights on what we might expect next and what engaged communities should be doing. Gain a greater understanding of the policy landscape and its impact on how we live and work.
Leveraging AI to create a more diverse and inclusive tech industry
Marissa McNeelands (CEO of Toast) will be joined by Amber Mac to discuss how her company works to eliminate gender bias in tech hiring. TOAST, Canada’s first female-focused talent partner, uses a unique AI-driven recruitment tool to help organizations diversify their tech teams and support women in tech careers. This session will explore the role that data and algorithms could play in fostering a more inclusive workforce.
AI, Creativity, and Inclusivity: Empowering Tomorrow’s Marketing Leaders
This panel explores how AI and creativity can foster economic empowerment through tech skills training and career growth. The panel will delve into the impact of AI on marketing, the importance of diversity and inclusivity in its design, and the role of continuous education. The session aims to understand economic empowerment through tech skills training, career growth, and a nurturing environment. Features Natalie Black (Mia), Liberty White (CHOZEN MEDIA), Prieeyya Kaur Kesh (Mia), and Anne-Marie Enns (Mia)
Innovating for Canada’s Competitive Edge
Join Dana O’Born (Council of Canadian Innovators), Tracey Bodnarchuk (Canada Powered by Women), and Stuart MacDonald (Narrative Fund) as they discuss the future of Canadian competitiveness through the lens of innovation and transformation. This session will explore the technology and energy industries and why innovation is a team sport. Looking at both growing and transitioning sectors, they will explore how Canada can leverage its strengths and overcome challenges to maintain a competitive edge in the global market and create a sustainable, prosperous future.
Why ‘de-extinction’ is vital to fighting climate change
Join Ben Lamm (CEO of Colossal) and Chris Hogg (DJG) for a riveting discussion on de-extinction and its role in combating climate change. Could the woolly mammoth, the Tasmanian tiger, and the dodo bird be agents of change? Learn about Colossal’s groundbreaking work in reviving extinct species and how this contributes to biodiversity restoration. We will delve into the technology behind halting extinction, preserving animal DNA, and reversing human-induced environmental damage. Explore how de-extinction can restore lost ecosystems, increase biodiversity, and contribute to environmental sustainability. This session promises to spark insightful discussions on the future of biotech and environmental conservation.
AI in Marketing: Magic Wand, Double-Edged Sword or Pandora’s Box
Darnel Moore (Distinct.ly) will be joined by Elena Yunusov (Human Feedback Foundation) to explore customer marketing strategies in the context of AI. We will delve into how AI can personalize content at scale and analyze customer behaviour while highlighting the importance of human insight and intervention in marketing. Have we crossed the line when the computer tracks, predicts and influences customer behaviours? Where and when is it best to deploy machine learning and AI in your marketing strategy? At what point in the process is it still best for humans to drive the process? How do we ensure that AI supports the customer journey and that the tools we deploy do not undermine an authentic, transparent relationship? Join us as we aspire to find where the balance is best placed between AI tools and human intention, avoid repeating the mistakes of social media and aim to harness the power of AI responsibly.
The Almighty AI: Friend or Foe for the Sustainability Agenda?
While headlines are dominated by the thrill and alarm of the rise in Artificial Intelligence applications and utility across industries, they have overshadowed another existential hot topic: Sustainability and ESG. This fireside chat will examine AI’s role in the Sustainability agenda for communities, businesses, and national states, and in what ways leaders across sectors are taking action today for impact tomorrow. We might even imagine new kinds of futures where artificial and collective intelligence collide in this unique chat forum. Features Amy Peck (EndeavorXR) and Rika Nakazawa (NTT).
Amplifying Community Actions: Case Study of the Second Harvest Food Rescue App
Lori Nikkel (CEO of Second Harvest) and Winston Rosser (VP, Second Harvest) will join Mark Evans (Marketing Spark) to discuss their innovative approach to combating food waste and insecurity, particularly during the COVID-19 pandemic and its aftermath. They’ll share how their technology platform has facilitated partnerships between food donors and non-profits, enabling them to scale the redistribution of surplus food from coast to coast to coast. Learn about the increased efficiency that allowed them to connect 5,600 donors with 3,400 non-profits–rescuing 24 million pounds of food, averting 79.3 million pounds of greenhouse gases, and saving 13.2 billion litres of water in the last year alone.
AI & Procurement: The Intersection of Innovation, Risk and Law
Join Colleen Pound (CEO of Proxure), Mary Jane Dykeman (INQ Law) and David Potter (Vog) for an enlightening session on the transformative role of AI and technology in professional services. They will delve into how these tools are levelling the playing field, particularly in procurement and legal services. Colleen, with her expertise in automation and predictive analytics, will shed light on procuring AI solutions. Mary Jane, a seasoned health and data lawyer, will discuss the legal and risk management aspects of AI adoption. This session promises a rich blend of insights from the tech startup and healthcare sectors.
What the chaos at OpenAI, misinformation, and fake AI journalists mean for our future
Join Mathew Ingram (CJR) and moderator Chris Hogg as they explore the chaos that has been the world of AI this year. From executive shakeups, to fast-vs-slow AI, to misinformation and deepfakes, this session will explore the current state of AI and what it means for our future.
Digital Journal is an official media partner of the mesh conference. Learn more and get tickets to the mesh conference, happening December 6-7 in Toronto, at meshconference.com
AI is taking the world by storm — unless you’re in finance, Gartner survey finds
61% of finance leaders aren’t using AI and Gartner explores why in their latest survey.
We’ve seen plenty of studies, industry updates, and tech investments pointing to an AI revolution in virtually every industry, especially IT and customer service.
But one Gartner survey shows a lag in AI adoption by the finance industry. The technology research and consulting firm conducted a survey of 130 finance leaders and noticed “limited” AI implementations:
“Despite AI’s potential, most finance functions’ AI implementations have remained limited. As they begin to chart out a plan for how best to prioritize that additional investment, CFOs should partner with their finance leadership teams to compare their current progress against their peers’ and identify concrete recommendations from early adopters on how best to accelerate AI use in their function.”
- Marco Steeker, Senior Principal, Gartner Finance Practice
Here are a few highlights from the report:
Most finance leaders using AI are only in early stages
Gartner found that only 8% of finance organizations are using AI in production, which is much less than the 20% in other areas like HR, real estate, and procurement. This speaks to finance being over two times behind in AI use compared to the rest of the departmental functions. Additionally, a mere 1% of finance leaders say they’re in the scaling phase.
Finance leaders prioritize other initiatives over AI
The survey asked respondents why they haven’t used AI in primary finance functions, and the majority of answers included these four reasons:
- Lack of technical capabilities
- Low-quality data
- Insufficient use cases
- Other priorities
The latter reason felt the most problematic within finance leaders’ perspectives:
“What this perspective underappreciates is that AI can be a critical enabler of finance leaders’ “other priorities,” such as more dynamic financial planning or close and consolidation efficiency.”
- Marco Steeker, Senior Principal, Gartner Finance Practice
A recent Dye & Durham report suggests AI could help stabilize the financial sector as interest rates and economic indicators sway by offering efficiency, cost reduction, and accuracy — but the hesitancy remains. Their report also found that a majority of skilled professionals, including lawyers, doctors, and financiers, express discomfort with incorporating AI into their services.
Existing AI use in finance varies across different functions
The Gartner survey found that finance departments don’t use AI for one main function across the board. Instead, it’s use cases are varied and include:
- Accounting support
- Anomaly/error detection
- Financial analysis
Learn more about the Gartner survey here.
Veronica Ott is a freelance writer and digital marketer with a specialization in finance and business. As a CPA with experience in the industry, she’s able to provide unique insight into various monetary, financial and economic topics. When Veronica isn’t writing, you can find her watching the latest films!
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