Competing in the age of AI

According to PwC’s AI predictions for 2025, the rules of competition are shifting rapidly, and the labour market is undergoing a significant transformation. Even companies that use AI intensively and lead in implementation cannot precisely predict what is to come. The impact is so great that no one has all the answers. What is certain: success in this transformative period depends on the strategic choices leaders make, how they respond to changing work processes, and the extent to which they foster trust within the organisation. What works today offers no guarantee for tomorrow. Strategic decisions now revolve around quick adaptation, flexible growth, and prioritizing innovation.

AI accelerates all aspects of a business: from insights and decision-making to capacity building and organisational development. Companies that embrace speed and encourage employees to operate flexibly are the first to reap the benefits.

Technological breakthroughs from the past show how significant the impact can be. During the rise of the internet, annual labour productivity growth in the US doubled to 2.8 percent between 1995 and 2005. This added trillions to the economy. After 2010, this growth levelled off, with productivity growth of a modest 1.2 percent until 2022. AI shows at least the same potential – and possibly a greater impact – to drive a new wave of economic growth.

AI innovation acceleration

Cumulative number of AI breakthroughs 1950 to 2025

A comparison with a Formula 1 racing team clearly illustrates how AI supports strategy. An F1 car excels in technology and precision, but the driver determines success, supported by a team of experts. To win, you must excel in all aspects: from technology and talent to strategy, efficient processes, optimal collaboration, and the latest innovations. AI already plays a key role in this: during a race, AI systems analyse data on competitors, performance, and track conditions in real-time. The driver and the team incorporate AI into their strategy, making every turn and decision smarter and more effective. Between races and seasons, they optimize their approach with AI-driven insights, allowing them to race faster and more successfully.

Like a racing team, a company functions as a dynamic system. Speed and agility make the difference. Leaders who use AI and data for market analysis, sector insights, and business performance strengthen their competitive position.

AI provides a strategic dashboard with real-time insights into market movements, sector developments, tax and regulations, and business performance. This helps identify emerging trends and optimization opportunities.

Companies that smartly integrate AI are already achieving up to thirty percent productivity improvement. According to PwC’s 28th Global CEO Survey, 56 percent of CEOs report more efficient use of working time due to generative AI. Additionally, 32 percent experience revenue growth, and 34 percent see increased profitability. CEOs are accelerating AI adoption and integrating AI within technological platforms (47 percent), business processes (41 percent), workforce development (31 percent), and core strategies (24 percent). A third directly incorporates AI into products and services. Generative AI enables hyper-personalized products and services and new revenue models.

All new opportunities also have implications for existing companies and revenue models. Traditionally, scale offered a significant advantage: it enabled deeper specialization, larger technology investments, and lower production costs. AI fundamentally changes this: with AI, small and medium-sized businesses can operate at the level of large players. For example, a small fintech company can use AI to assess creditworthiness based on hundreds of variables. This leads to a higher number of approved loans and automated processes, allowing the organisation to grow faster and become more competitive.

For larger companies, AI opens the door to new ways of working. AI agents offer potentially unlimited productivity and support employees with complex tasks. Human-AI collaboration increases productivity and speed by fifty percent, according to our analysis of client cases and internal AI applications. This leads to a shift: the traditional labour pyramid evolves into a diamond shape where human expertise and AI-driven intelligence both play a key role.

Note: Throughout all this, humans, and your people, always remain central. They coordinate AI agents, validate insights, and use AI to develop innovative products and more efficient processes. This requires not only technology and skills but also a work culture where employees see AI as a tool that enhances their impact.

In an era of continuous disruption, technological innovation is the most important success factor. Companies that reinvent themselves with AI-driven strategies set the tone in increasingly competitive markets. More and more organisations are radically revising their business models. Many companies are exploring dozens of AI use cases and identifying new opportunities for cost savings, market growth, and strategic differentiation. AI must become an integral part of business processes, products, and customer interactions. Innovation arises by smartly using AI to continuously improve work processes. Teams that see AI as an integral tool come up with new applications faster.

• Create a work environment where experimentation and innovation are central.
• Reward pioneers who use AI in innovative ways.
• Proactively identify new market needs and respond to them.
• Invest in research and pilots to accelerate progress.