Singapore tops APAC for two-year AI adoption forecast

Singapore tops APAC for two-year AI adoption forecast

35 per cent of organisations in Singapore plan on adopting AI within the next two years

Artificial Intelligence (AI) adoption rates have increased significantly across the ASEAN region over the past year, according to recent IDC findings.

Specifically, the analyst firm reports that 35 per cent of organisations in Singapore plan on adopting AI within the next two years, the highest among Asia Pacific countries.

The survey also indicates AI adoption rates have increased across ASEAN by approximately 43 per cent in under a year, from eight per cent in 2017 to 14 per cent today.

But what is driving such increased adoption?

According to IDC, organisations understand the benefits of adopting AI in their business operations, with 52 per cent indicating better insights as the most important business driver, followed by enhanced process automation (51 per cent) and improved productivity (42 per cent).

"With its positive impact already visible across banking, manufacturing, healthcare and government, there are clear opportunities for more organisations in Southeast Asia to leverage AI to create differentiating value,” said Chwee Kan Chua, global research director at IDC Asia Pacific.

"We expect investments in AI to continue to rise, as more organisations begin to understand the benefits of embedding AI into their business and how data and analytics can help uncover new insights."

Somewhat surprisingly, Indonesia tops the list of regional markets for AI adoption (24.6 per cent); however, a bimodal distribution is observed in Indonesia with the country also found to be the highest in regards to organisations that have no plan on adopting AI with the next five years (59 per cent).

Following Indonesia for AI adoption is Thailand (17.1 per cent), Singapore (9.9 per cent) and Malaysia (8.1 per cent), with the top Southeast Asian use cases algorithmic market forecasting (17 per cent), and automated asset and infrastructure management (11 per cent).

Seen as a technology leader in the region, Singapore’s third place for AI adoption (9.9 per cent) might come as a surprise, with the inability to quantify business value and ROI from AI seen as holding the sector back.

Furthermore, more than 25 per cent of Singapore companies reported a lack of skills and knowledge as the top barrier to entry with concerns over AI technology putting their job at risk.

This compares to the average of 23 per cent across the ASEAN region who report a lack of skills and knowledge as holding adoption back, in addition to a high cost of solutioning (23 per cent), as indicated in the survey.

However, it is not all bad news, with 35 per cent of organisations in Singapore planning on adopting AI within the next two years, the highest among Asia Pacific countries, according to the survey.

“Organisations that do not incorporate AI into their business operations will lose out to their AI-enabled peers who will benefit from the greater predictability, efficiency and innovation that advanced analytics can bring,” Chwee added.

Despite these positive results for the ASEAN region, they still lag significantly behind several North Asian markets, for instance, more than 80 per cent of organisations in China and South Korea believe AI capabilities will be critical to organisations’ success and competitiveness in the coming years, compared to less than 40 per cent in Singapore and Malaysia.

“AI is no longer a differentiator today but a disruptor transforming industries and cities,” added Randy Goh, managing director of SAS Singapore. “Automated AI systems, based on analytics, are reducing barriers to entry.

"Complex problems can now be solved more efficiently and at a faster speed due to the availability of data and advanced technology."

While the overall adoption of AI in Southeast Asia lags behind Asia Pacific (excluding Japan), the survey indicates the region could be quick to catch up.

"To reap the benefits of AI, Singapore companies must embed AI solutions into their business through the right skills, processes and technology and with the right business outcomes in mind,” added Goh.

"Just like data is the fuel of the new economy, analytics is the engine that will continue to drive businesses forward as AI starts to become mainstream."

The results are from an annual study by IDC with a total of 502 executives and IT line-of-business heads across the Asia Pacific (excluding Japan) were surveyed including 146 respondents from Southeast Asia (Singapore, Malaysia, Indonesia, Thailand).

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