View from Asia: The push to introduce AI

US research company Forrester has reported that Asian enterprises are fast adopting artificial intelligence (AI) to reinvent their business models, and they perceive AI as a complete disruptive force.

Investment and adoption in Asia has jumped significantly between 2016 and 2017, led by China (from a growth of 31% to 61%) and India (from a growth of 29% to 69%). Spending on AI systems in Asia, excluding Japan, is expected to reach $4.6bn in 2021, with a compound annual growth rate of 72.9% between 2016 and 2021, according to data provider IDC2.

What stands out among Asian enterprises is the heavy focus on strategic, longer term objectives and high outcomes compared with other regions and global enterprises. These firms prioritise industry disruption and new product development higher than other regions and global enterprises. Internal investments are driven by the marketing, sales and customer support areas that are developing cognitive products and engaging with customers through intelligent agents.

Government-backed AI is fuelling innovation in existing tech firms, start-ups and academic communities. On February 1, 2018, India announced a national AI programme. Japan, Singapore and South Korea are following closely by expanding their existing technology industry strength in robotics electronics. Universities are research resources for companies such as Huawei, which recently invested $1m in the University of California, Berkley, for AI R&D.

Beijing is planning to build a Rmb13.8bn ($2.2bn) AI development park as China pushes ahead to fulfil its ambition to become a world leader in AI by 2025. The new park will focus on attracting enterprises that work on big data, biometric identification, deep learning and cloud computing.

The push towards AI has seen organisations in south-east Asia embrace innovative AI applications such as chatbots and recommendation engines. Still, challenges to wider adoption remain, including varying access to connectivity and a lack of skills and understanding of the technology. Digital infrastructure that can systematically collect and disseminate large quantities of data is not evenly distributed across the region’s 11 countries, with just over half of the region’s population using the internet.

Progress on open data remains slow, with about 7% of Asia datasets being open. Data remains fragmented across multiple silo systems. The skills shortage is also a formidable challenge to AI adoption. Universities need to do better with producing coders and graduates in computer and software engineering.

Governments continue to play a key role in furthering AI adoption in Asia. For example, regulations to accelerate open banking initiatives that can democratise access to data. For now, Asian AI remains nascent.

Lawrence Yeo is founder and principal consultant of AsiaBIZ Strategy, a Singapore-based management consulting firm providing Asia market research, business strategy development and export/FDI promotion services.