AI Literacy: What is it and how can you build it?

AI is not a technology just for technology experts. It’s become part of everyday lives. Being AI literate is not only becoming essential to business success, but to your own future. So, what is AI literacy, and how can you build it?

Functional literacy is the starting point for AI literacy

Communicating is a human instinct. Being able to read and is known as functional literacy and it allows us to share and gain knowledge. For individuals, functional literacy means we can participate in society and shape our lives. It’s considered a basic human right. Over the ages we’ve employed many technologies to do this from the first hieroglyphs to printed texts. Now, we’re in a new age.

The digital era demanded a shift to digital literacy

Computers, the internet and smart phones meant a review of the old idea of literacy. Digital skills have become essential to access information, resources and opportunities. Digital literacy is about being able to use technology for social communication and participation, including at work.

AI marks a new shift

With AI comes a fundamental shift in one of the most basic human endeavours. For the first time, we are now communicating with the technology rather than through it.

We need functional literacy and digital literacy. We also need to build AI literacy. This means not only being able to use the tools, but to understand their impact on our world. AI literacy includes understanding how to:

• get value from AI for in achieving your goals and aspirations, or competitive advantage
• protect your personal information against risk
• evaluate AI use critically and strategically.

As organisational leaders, the demands of AI literacy are expanded beyond your own life. You need to be able to determine the risks and befits of AI in your own operations. It’s similar to being able to read not only a bank statement but other financial reports for your decision-making.

Balance confidence and competence

Researchers see AI literacy as different to AI self-efficacy. AI self-efficacy refers to the way a person thinks about and feels empowered when it comes to AI. On the other hand, AI literacy is based on the level of knowledge or understanding about its implications and opportunities.

You’ll be better equipped for decisions about how AI could benefit your work with some understanding of AI in processes. You’ll be able to balance advantages and risks, while spotting the best places for humans to contribute. It doesn’t mean you need to become an expert.

Strengthen business resillience

When owners and their teams feel supported, it is easier to tackle setbacks without losing motivation. A mentally healthy workforce is better equipped to manage change, adapt to new challenges, and keep going when times are tough.

Create a positive reputation

Businesses that look after their people earn trust from staff, customers, and the wider community. Being known as a supportive employer is a strong advantage, setting the stage for lasting success even in difficult trading environments.

You don’t need to spend big to foster an environment that supports good mental health. Small steps such as open conversations, acknowledging achievements, and offering autonomy have an outsized impact in small workplaces.

Mentoring brings practical support and new perspective

It can be a game changer to have a Business Mentor in your corner. They encourage owners to focus on what is possible, not just what is urgent. They also advocate for you step back, ask “What do I need?”. This personal support can give you more confidence to set boundaries, prioritise self-care, and model healthy practices for staff.

Supporting wellbeing at work isn’t about ticking boxes. It’s about building a business you’re proud to lead and staff are proud to join. Workers with good workplaces bring those feelings home, enjoying better relationships outside of work, healthier family life, and more engagement in their wider communities. You’ll create positive ripples that come back to you.

Business Mentors New Zealand has experienced volunteers ready to provide practical guidance tailored to your specific situation and industry challenges. If you’re ready to find your Business Mentor, start with our registration form now.