Singapore, 8 October 2020 — The razor-sharp execution of artificial intelligence (AI) in Southeast Asia could boost the region’s gross domestic product by nearly a US$1 trillion by 2030, according to new research from EDBI and Kearney.
The report launched today, Racing towards the future: artificial intelligence in Southeast Asia, reveals that while AI adoption is still in nascent stages across Southeast Asia, more than 70 percent of AI users, providers, and investors see AI as crucial to the region’s future and say AI adoption must accelerate.
AI is both an opportunity and challenge for Southeast Asia. While AI could deliver a 10 to 18 percent uplift in GDP, the report identifies five challenges that the region must overcome to capture this economic boost, including a perceived talent gap, a fragmented and immature AI ecosystem, stifling data governance, and organizational resistance.
“The study reveals that Southeast Asia can seize significant economic gains as AI users and providers sharpen their focus on use cases and applications that can deliver positive and sustained business impact. Interest and job creation in this sector will gain momentum in the next decade with investors being a significant catalyst to drive AI’s development, adoption, and growth in the region,” says CHU Swee Yeok, CEO and President at EDBI.
Although AI is often treated as a panacea, the report reveals the importance of focus and a clear business case before diving in. The evidence is clear: 80 percent of the potential value of AI comes from fewer than 20 percent of the use cases. It is therefore crucial that organizations prioritize the high-impact AI use cases and engage all stakeholders to ensure AI solutions address the business priorities and deliver an impact in the near term.
The research also indicates Southeast Asia has an investment lag of two to three years compared with more advanced countries, with the region receiving just US$2 per capita of investments in AI between 2015 and 2019 compared with the United States at US$155 and China at US$21. The exception is Singapore, which spends US$68 per capita. Heavily focused on the service sector, the country’s economy is highly digitized and automated and well-positioned to capture the full potential of AI.
The research also reveals that Southeast Asia’s revenue management activities are getting two to three times more attention than cost management, with the biggest impact coming from use cases in marketing and sales as well as supply chain management. This contrasts with other regions, such as Europe, where around 70 percent of companies focus on using AI for productivity and efficiency. This variance between countries is the result of the different sectorial make-ups and the relative maturity of each country’s AI infrastructure and adoption readiness.
Although the talent gap is perceived as a hindrance to AI adoption in the region, the research argues this perception is overestimated. The gap is in fact closing rapidly as capable AI models and providers are now readily available, and there is a large pool of talent capable of upskilling with the relevant business domain knowledge.
To unlock the benefits of AI in Southeast Asia, the report identifies recommendations for five groups of stakeholders: governments, businesses users, technology and AI users, investors, and academia. Addressing these recommendations can help AI evolve more rapidly and transform Southeast Asia’s manufacturing, retail and hospitality, agriculture, government, and healthcare sectors.