AI Adoption Trends for Asia-Pacific in 2021

With the world perched on the brink of digital disruption, the adoption of artificial intelligence (AI) among companies has been at an all-time high. Organizations far and wide are harnessing the potential of AI and automation to drive business differentiation and achieve resilience. This article highlights the key findings of an artificial intelligence adoption survey conducted in 2021 by a leading market intelligence company. The survey focuses on the current status of AI adoption by organizations in the Asia-Pacific region.

External-Focused Goals are Increasingly Driving AI Investments

Over the last two years, the Asia-Pacific region witnessed an unprecedented digital transformation, triggered in part by the pandemic. As a result, the use of digital technologies in the production and consumption of products and services has been increasingly emphasized. To compete in this digital-first world, organizations are trying to boost their capabilities to generate revenue digitally.

As a result, their AI investments are now driven more by external-focussed goals like enhancing customer experience and driving product and service differentiation, and not so much by internal-focused goals such as improving employee productivity. It has been estimated that by 2023, around 1 in 3 companies will generate over 30% of their earnings only from digital products and services.

AI Investments Have Led to Tangible Outcomes for Organizations

By raising their investments in AI, organizations in the Asia-Pacific region have significantly improved their digital capabilities and achieved tangible outcomes. For instance, 32% of the organizations surveyed have leveraged AI to achieve product and service differentiation (See graph above). Out of these, many have built AI-enabled recommendation systems to personalize digital content for consumers.

Likewise, 32% of organizations surveyed have boosted employee productivity using their investment in AI. Many of these companies rely on AI-powered chatbots to answer common employee queries, taking the load off their HR personnel. AI has also been harnessed to improve risk management by around 30% of organizations. For example, banking and financial organizations use AI-based engines to pinpoint fraudulent transactions.

While AI Adoption Remains Steady at 39%, Organizations that Have Already Adopted AI are Likely to Raise their Spending by 34%

Spending on AI in the Asia-Pacific region is expected to increase at a CAGR of 34% between 2020 and 2025. A major part of this investment is likely to come from organizations that have already adopted AI and are looking to implement use cases of greater scope and complexity.

The share of AI projects in the total technology spend is also expected to rise. Organizations in Asia-Pacific that spent, on an average, 15% on AI in 2021 are likely to increase this share to 23% in 2022.

In spite of all these developments, the overall momentum of AI adoption has slowed when compared to 2019, partly owing to the pandemic, geopolitical uncertainties, and inflation. As in 2020, 39% of the organizations surveyed in 2021 already use AI.

Where Exactly are AI Investments Going-Top Horizontal and Vertical Use Cases for Organizations

Around 80% of the organizations in the Asia-Pacific region that have adopted AI have applied AI in over 5 horizontal applications, most of these applications tend to be customer-facing. At the same time, most of the leading use cases tend to be industry specific. For instance, automated compliance management in banking, root cause analysis in manufacturing, and real-time drug safety in life sciences. (See graph above). Though these use cases are complex in nature and entail meticulous development and management of AI models, they potentially add more value to businesses than horizontal ones.

So that’s a wrap on the major AI adoption trends in Asia-Pacific in 2021. Any other trend you are aware of? Please let us in the comments below. Thanks for reading.

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