Despite growing artificial intelligence (AI) adoption, countries within the Asia-Pacific region are still in the mid-stages of overall AI maturity, according to a new IDC survey of eight prominent countries in the region.
While significant progress has been made, scaling up AI remains constrained by skills shortages and the complexities of regulatory divergence across geographies, revealed the region-wide study of Australia, India, Indonesia, Japan, South Korea, Malaysia, Singapore, and Taiwan out last week.
AI maturity, it says, comprises three components: investments in enterprise data and technology, supportive government policies and regulations, and local employees’ preparedness to embrace new technologies.
The good news is AI spending in the Asia-Pacific (excluding China) region is expected to reach US$90.7 billion by 2027, with a compound annual growth rate (CAGR) of 28.9 per cent from 2023.
However, AI regulatory differences pose major challenges for the top 2,000 Asia-Pacific companies, potentially increasing implementation time and effort for sensitive use cases by up to 20 per cent.
That said, Enterprises in the region remain optimistic about the transformative power of AI, according to IDC. They expect AI to improve productivity, simplify operations, automate processes, reduce costs, and provide data-driven insights that enhance decision-making capabilities.
Furthermore, AI is expected to transform industries, create product and service differentiation, and open new revenue streams, promising trillions of dollars in economic growth globally.
In 2024, AI use cases in the region will become more expansive and externally focused, driven by the extensive adoption of AI.
In particular, generative AI is expected to be the fastest-growing category, with 15 per cent of Asia-Pacific organisations’ 2024 IT budgets earmarked for generative AI, compared to the worldwide average of 11 per cent.
At the same time, AI on the edge is on the rise, with at least 75 per cent of Asia-Pacific organisations surveyed expecting to spend more on edge in 2024. About 50 per cent estimate the edge to account for at least 16 per cent of their overall IT expenditure.
IDC believes that the shift to edge computing is pivotal to bringing AI everywhere. The shift to edge computing, where data is generated at the edge like with Internet of Things (IoT) devices and applications, will improve response time and lower costs, as there are often latency issues associated with centralised infrastructures.
Singapore tops AI maturity in APAC
Singapore stands out as the only economy surveyed to reach the “AI Leader” stage, due to its regional hub status, thriving AI startup scene, top-tier universities, and government investments that bolster the city state’s AI maturity.
IDC noted that Singapore’s AI prowess stems from its digitally sophisticated enterprises, with large local enterprises and multinational firms with regional headquarters in Singapore planning substantial AI investments.
IDC’s survey suggests about 87 per cent of larger enterprises in Singapore have adopted AI and machine learning (ML), with about 60 per cent seeing tangible improvements in business key performance indicators (KPIs) through AI/ML adoption.
The Singapore government has also been proactive with spearheading AI initiatives and investments. In 2024, the government announced a US$743 million investment spread out over five years to enhance national AI capabilities and cultivate a more trustworthy and responsible AI ecosystem.
Despite its regional AI leadership, IDC noted that Singapore’s small size means the country must innovate faster in AI than its competitors to stay ahead. Moreover, the city-state must develop a market-leading approach to AI regulations as soon as possible.
As AI policies and regulations become increasingly critical for responsible AI development, establishing clear guidelines will mitigate risks, and help ensure ethical AI use.
Separately, a Microsoft and LinkedIn study last week found that 88 per cent of knowledge workers in Singapore use generative AI tools in their daily tasks.
However some 68 per cent of respondents are wary of about the absence of a clear plan and vision within their organisations for AI’s integration.
As a result, some 84 per cent of employees are resorting to “Bring Your Own AI” (BYOAI) practices, a move that can compromise company data security.
The study also found that 87 per cent of Singaporean AI power-users start their workday with AI assistance, using it for daily task management and preparing for the workday, and can save an average of 30 minutes daily through AI integration.
In terms of hiring preferences, 71 per cent of Singaporean leaders are reluctant to hire candidates lacking AI skills, and 77 per cent prefer candidates with AI skills.
