The success or failure of Artificial Intelligence (AI) initiatives largely hinges on psychological safety, according to 83% of business leaders surveyed in a report by Infosys and MIT Technology Review Insights.
The study highlights that fear of failure and backlash, unclear communication about AI, and weak leadership — despite robust technical infrastructure — are major barriers to psychological safety.
Employees often hesitate to experiment, challenge norms, or lead AI projects due to fear of criticism. This reluctance slows innovation and hampers AI adoption aimed at boosting productivity.
Companies that encourage experimentation tend to achieve greater success with AI. “Psychological safety is mandatory in this new era of AI. The tech itself is evolving so fast, companies have to experiment, and some things will fail. There needs to be a safety net,” said Rafee Tarafdar, Executive Vice President and Chief Technology Officer at Infosys.
One in four business leaders admitted to not pitching an AI initiative due to fear of failure or criticism. Four out of five agreed that psychological safety directly impacts AI project outcomes, and 84% said its effects are observable and contribute to business performance.
Despite its importance, only 39% of respondents reported “very high” psychological safety at work, feeling consistently safe to take risks. Another 48% generally feel safe but hesitate to experiment depending on context and audience.
Similarly, just 46% feel free to openly discuss challenges and ideas without fear.
Clear communication and strong leadership emerged as critical drivers of psychological safety. Without these, even the best technology cannot deliver its full potential.
As AI adoption accelerates, fostering a culture where employees feel safe to innovate may be the difference between success and stagnation.
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