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May 20, 2025 10 mins

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The AI revolution is happening not in Silicon Valley but in unexpected places like roofing contractors, physical therapists, and local service businesses worldwide. Service businesses implementing AI are seeing 20-30% operational cost reductions while creating 15-20% net job growth by reinvesting savings into market expansion.

  • Service industries uniquely positioned for AI transformation due to conversational nature, limited past innovation, and potential for knowledge capture
  • 40% of AI startups since 2022 launched by non-technical experts who understand industry problems
  • Professional services firms redirecting 30-50% of junior staff work to higher-value activities using AI
  • "Agentification" opportunity allows converting captured knowledge into scalable AI agents with SaaS-like valuations
  • Regional economic renaissance possible through local expertise, university partnerships, and specialized AI applications


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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Elizabeth (00:00):
Hey everyone.
Elizabeth, here your virtualco-host for AI in 60 Seconds.
Luis Salazar, CEO of AI4SP, iswith us today after three weeks
traveling with our seminar onleading machines.
Luis, you've been hearing thesame burning question everywhere
, from Liverpool to Nebraskawhat happens when AI disrupts
half the jobs we're trainingstudents for?

Luis (00:21):
It was an amazing three weeks during which you were also
on stage at every single event,elizabeth.
While everyone's focused onpotential job losses, I focus on
the AI revolution happening inthe most unexpected places.
I mean we see it in roofingcontractors, consultants, adult
education, physical therapists,small marketing firms.
They're all using AI in waysSilicon Valley isn't even

(00:44):
watching.

Elizabeth (00:51):
Well, for 50 years, tech innovation mostly served
desk jobs, but now AI allowsinnovators to reach the 82% of
workers who actually build, fixand deliver our world.
Our data shows servicebusinesses implementing AI are
seeing 20 to 30% operationalcost reductions.

Luis (01:03):
And here's the thing the smart ones aren't just pocketing
those savings, they'rereinvesting to expand into new
markets, creating 15 to 20% netjob growth.
Just last week, I met aconsulting services provider
using AI to expand theproductivity per person by 30%
and that triggered new hiresfollowing market expansions.

Elizabeth (01:26):
Yet some investors call this just efficiency.
What's their blind spot?

Luis (01:31):
They're stuck in old thinking.
We're not just doing the samethings faster.
Ai is enabling entirely newservice models.

Elizabeth (01:38):
And the disappearing jobs Our research shows they're
being replaced by roles we can'tname yet.

Luis (01:43):
It is a mix.
There are new roles we neversaw before and also a new
potential golden era forentrepreneurship.
The jobs being automated areoften the repetitive,
lower-value tasks.
The new jobs are about buildingor managing new AI-powered
services and expanding humancapacity and expanding human
capacity.

Elizabeth (02:02):
So you are saying this isn't just about cutting
costs but unlocking newpotential in sectors previously
untouched by significant techinnovation?

Luis (02:10):
Yeah, something like that.
Think about it the vastmajority of our economy is
service-based.
These are the industries thatkeep society functioning, from
healthcare to construction tolocal government services.

Elizabeth (02:22):
And they haven't benefited from the same level of
software innovation as, say,the finance or tech sectors.

Luis (02:28):
Not at all.
For decades, the digitalrevolution largely bypassed them
, but generative AI, with itsconversational interface and
ability to process complexknowledge, is a perfect fit for
how service businesses operate.

Elizabeth (02:42):
That makes sense.
Service is inherentlyconversational.

Luis (02:45):
Yeah, and that's one of the three key reasons service
industries are uniquelypositioned for this AI
transformation.
What are the other two?
The second is that limited pastinnovation means there are
massive opportunities foroperational improvements.
There's so much low-hangingfruit.

Elizabeth (03:02):
Unlike, say, a highly optimized tech company.

Luis (03:04):
Right.
And the third reason is thepotential for knowledge capture.
Service businesses run onexpertise, the kind that AI can
learn from, enhance and scale.

Elizabeth (03:15):
So capturing that institutional knowledge becomes
a new strategic asset.

Luis (03:20):
Absolutely.
It creates new intellectualproperty and competitive
advantages that were previouslylocked inside people's heads.

Elizabeth (03:29):
Speaking of unlocking potential, you mentioned the
opportunity in outsourcedgovernment services.
Our data points to over $10billion annually spent just in
adult education and upskillingin the US.

Luis (03:41):
Yeah, and that's a huge opportunity for regional
businesses.
Think about it.
Without major capital expenses,they can leverage AI for things
like reskilling local workersor providing citizen services
and deliver 10 times the impactwith the same funding.

Elizabeth (03:57):
That's a massive efficiency gain that can be
redirected.

Luis (04:00):
That is the immense potential I see everywhere and
we're seeing professionalservices firms redirect 30 to
50% of junior staff work tohigher value activities using AI
.

Elizabeth (04:12):
Which not only improves service quality but
also expands client reachsignificantly.
Our data shows two to threetimes the reach with the same
team size.

Luis (04:22):
It's transformative, and when companies use these cost
savings to fuel expansion, wesee revenue increases of 25 to
35 percent and job creationrates four times higher than
those who just pocket thesavings.
That's a very powerful,virtuous cycle.
It really is, and wherever I goand interact with local leaders

(04:42):
and students and entrepreneurs,all I can envision is this
economic renaissance in placesfar from traditional tech hubs.

Elizabeth (04:50):
Isn't that the core point of your meetings with
academia and private equityinvestors?
To drive local innovation, Imean 95% of native AI companies
are emerging outside SiliconValley and similar hubs.

Luis (05:04):
Yeah, and 67% are outside the United States.
I cannot emphasize this enough.
Ai is not Silicon Valley.
Let me repeat it AI is not aSilicon Valley phenomenon.
It's a global, distributedrevolution.

Elizabeth (05:19):
It sounds like the service industry practitioners
themselves can become theinnovators.

Luis (05:23):
And that is already happening.
Listen to this Since 2022, 40%of AI startups have been
launched by non-technicalexperts.

Elizabeth (05:32):
People who understand the problems in their industry
are now building the AIsolutions building the AI
solutions, and those solutionsare used by peers with similar
problems, like the roofingcontractor using AI for bids or
the physical therapistautomating note-taking.

Luis (05:53):
Exactly.
A service provider in Barcelona, sao Paulo, boise or Omaha
should not wait for a techcompany in California to solve
their problems.
They're solving them themselves, often creating regional
centers of expertise.

Elizabeth (06:01):
And this creates a local economic ecosystem,
doesn't it?

Luis (06:05):
And as regional expertise pops here and there,
universities become partners,local capital finds new
opportunities, and specializedAI applications address specific
community needs.

Elizabeth (06:17):
And when those local AI solutions spin off becoming
local software companies, theincome flows back into the
region.
And when those local AIsolutions spin off becoming
local software companies, theincome flows back into the
region.

Luis (06:23):
And there is so much potential.
It's basically a model forsustainable growth that doesn't
rely on attracting outsidecompanies, but on empowering
local ones.

Elizabeth (06:33):
So let's get practical.
For service businesses, localgovernments and venture capital
looking to seize thisopportunity, what strategic
frameworks are proving mosteffective?

Luis (06:43):
Top of mind.
The first one is the federateddata strategy.
Creating shared data resourcesacross similar operations builds
network effects and competitivemodes.

Elizabeth (06:54):
So pooling anonymized data, for example to train
better AI agents.

Luis (06:59):
That is one of many angles .
The second framework is aroundhybrid workforce orchestration,
which we've talked about before.
It's about humans leading teamsof AI resources, not just
adding AI tools.

Elizabeth (07:11):
Like myself, as one of 58 AI agents and tools
working alongside our humanmanagers at AI4SP.

Luis (07:18):
Exactly.
And third is productivityredirection Understanding where
AI saves time and strategicallyreinvesting that capacity for
multidimensional value, not justcost savings.

Elizabeth (07:30):
It's about being intentional with the time that
automation frees up.

Luis (07:34):
And a powerful outcome of this systematic implementation
is the agentificationopportunity.

Elizabeth (07:39):
Turning that captured knowledge into reusable AI
agents.

Luis (07:43):
Yeah, because these agents address industry-specific
problems and can be productizedand scaled as software solutions
.

Elizabeth (07:49):
Which offers a significant valuation arbitrage
compared to traditional servicebusinesses.

Luis (07:54):
Absolutely, and that is my pitch to inspire local
investors.
Service businesses might tradeat four to eight times earnings,
but vertical software as aservice can command 10 to 20
times or more.
It's a path to unlock immensevalue.

Elizabeth (08:09):
This is a truly exciting shift in where
innovation is happening and whobenefits, and it challenges the
traditional narrative about AIand jobs.
So, luis, what's your one morething takeaway for our listeners
today?

Luis (08:22):
The next wave of innovation isn't just coming
from Silicon Valley.
It's emerging from thousands ofservice businesses that AI will
transform.
And here's the thing thispresents a massive opportunity
on two fronts.
Okay, we're listening.
Let's start with investors.
Funding the transformation ofservice businesses with AI is a

(08:42):
path to significant ROI, drivingeconomic growth and creating
jobs right in your backyard.
From Catalonia to Jakarta, fromSao Paulo to Omaha, this is the
opportunity of our lifetime.

Elizabeth (08:54):
So invest in applying AI to proven service businesses
to drive social and economicgrowth.

Luis (09:00):
Absolutely and for anyone, including those recently
affected by layoffs.
Seize the moment, create yourfirst agent and learn to manage
your AI team, and why notEvaluate tapping into this
opportunity?
The service sector desperatelyneeds AI expertise, and you
might find your next venture orcareer path servicing these
businesses with the AI skillsyou're building.

Elizabeth (09:23):
The next unicorn could be from your town.
That's a powerful thought toleave us with.
Thanks for a great dialogue,Luis.
That's all for this episode.
As always, you can find moreresources at AI4SPorg.
Stay curious, everyone, andwe'll see you next time.
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