Adoption of Artificial Intelligence on the rise in ASEAN

At 17.1%, Thailand AI adoption rate is second-highest in the region, but talent shortage persists

A recent survey conducted by leading IT market research and advisory firm IDC titled IDC Asia/Pacific Enterprise Cognitive/AI survey highlights that AI adoption in the region is on the rise. Current AI adoption rates stand at 14% across Southeast Asia as compared to just eight percent last year, marking a clear move by companies to embed some form of AI/cognitive intelligence into their operations.

Discovery of better business insights has become the most important adoption driver according to more than half (52%) of respondents, moving from third most important in 2017, revealing a maturity in the way the region is harnessing AI to enhance their business. Other top drivers this year are enhanced process automation (51%), and improved productivity (42%).

With 24.6% of organizations in Indonesia adopting AI, the country leads the pack in terms of adoption, followed by Thailand (17.1%), Singapore (9.9%) and Malaysia (8.1%). The top use cases in Southeast Asia include algorithmic market forecasting (17%), and automated asset and infrastructure management (11%).

"With its positive impact already visible across banking, manufacturing, healthcare and government, there are clear opportunities for more organizations in Southeast Asia to leverage AI to create differentiating value. We expect investments in AI to continue to rise, as more organizations begin to understand the benefits of embedding AI into their business and how data and analytics can help uncover new insights. Organizations that do not incorporate AI in 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" said Chwee Kan Chua, Global Research Director, Big Data and Analytics and Cognitive/AI, IDC Asia/Pacific.

Strategy still in flux, with high costs and lack of skilled talent top barriers to adoption

Despite the rise in adoption, organizations in the region are trailing behind those in North Asian countries, in terms of making AI a strategic agenda. For example, more than 80% of companies in China and South Korea believe AI capabilities will be critical for organizations' success and competitiveness in the coming years, compared to less than 40% of companies in Singapore and Malaysia.

Lack of Skills & Knowledge (23%) and High Cost of Solutioning (23%) are among the most frequent barriers to adoption named by survey respondents.

While the overall adoption in Southeast Asia falls behind Asia/Pacific (excluding Japan), there are signs to suggest organizations in the region will catch up quickly. For example, 40% of organizations in Thailand have incorporated or would like to incorporate AI in their ERP systems, indicating a sizable demand to have AI to guide and optimize operations.

In solidifying their strategy to turn AI into a differentiator for the business, companies find data from Sales, Commerce and Marketing to be the most ready, followed by that from Customer Service & Support operations, and IT, Security & Risk operations.

For those already embarking on their data-to-insights journey, there are varied challenges across sectors. Organizations in the financial services space face more challenges in data federation and model building, while public sector organizations are hindered by data readiness issues.

Thailand companies must find leverage to alleviate the impact of AI talent shortage

With 17.1% organizations having adopted AI in some form, the technology is making headway in Thailand. Organizations in the public sector, healthcare and retail are among the early adopters. Retail companies, especially those having partnerships with China investors, are aiming to revamp consumer experience through face and image recognition.

In terms of use cases, Threat/anomaly Detections and Automated Quality Inspections were more common in Thailand as compared to other countries in Thailand. Successful implementation of these use cases will help strengthen the country's core industries such as manufacturing.

However, Thailand also has the largest percentage of organizations reporting that skills shortage is the top barrier to adoption. Coupled with the fact that 80% of organizations in the country deem AI capabilities critical for their organizations' future competitiveness, the highest in ASEAN, it is clear there is a mismatch between the perceived urgency of AI adoption and the available means to address it. The imperative is to find proper leverages, tools and platforms to alleviate the impact of talent shortage.

"AI and analytics empower people and are the drivers of organizational success. It is great to see that so many organizations in Thailand are cognizant of the enhanced productivity and efficiency that embracing AI can bring" said Nutapone Apiluktoyanunt, Managing Director, SAS Thailand. However, the skills shortage is a very real challenge and one that demands action. It is vital for Thai businesses and public sector organizations to partner together to develop the right data analytics skillsets and make analytics accessible to all."

The IDC Asia/Pacific Enterprise Cognitive/AI survey is an annual study undertaken to understand adoption trends, challenges and key barriers, and business priorities in the space. In 2018, a total of 502 executives and IT line-of-business heads across Asia Pacific (excluding Japan), were surveyed including 146 respondents from Southeast Asia (Singapore, Malaysia, Indonesia, Thailand).

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Editorial contacts:

SAS Asia Pacific
Shu Ling Chan
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