Microsoft – IDC Study: Artificial Intelligence to nearly double the rate of innovation in Asia Pacific by 2021

 |   Microsoft NZ News Centre

CDO for Microsoft standing for photo

[L-R] Ralph Haupter, President, Microsoft Asia; Matthew Friedman, Chief Digital Officer and Chief Information Officer, Sembcorp; Fuji Foo, Vice President, Business Digitalisation, Certis; Kevin Wo, Managing Director, Microsoft Singapore; and Victor Lim, Vice President, Consulting Operations, IDC Asia/Pacific at the launch of the new study “Future Ready Business: Assessing Asia’s Growth Potential Through AI”

  • Artificial Intelligence (AI) will accelerate the rate of innovation and employee productivity improvements to nearly double in Asia Pacific by 2021.
  • Despite clear benefits in adopting the technology, only 41% of organizations in Asia Pacific today have embarked on their AI journeys.
  • Culture and Skills are among key barriers for organizations to succeed in AI.
  • Asia Pacific needs to focus on improving its AI readiness, specifically in strategy, capabilities and infrastructure dimensions, to ensure the success of a nation’s AI journey.

Singapore, 20 February 2019 – By 2021, Artificial Intelligence (AI) will allow the rate of innovation and employee productivity improvements in Asia Pacific to nearly double (X1.9 times), according to business leaders in Asia Pacific. The study from Microsoft and IDC Asia/Pacific, Future Ready Business: Assessing Asia’s Growth Potential Through AI[1] surveyed over 1,600 business leaders and over 1,580 workers across 15 markets in Asia Pacific.

Fig 1: AI impact on rates of innovation and employee productivity improvements today and in three years

While 80% of business leaders polled agreed that AI is instrumental for their organization’s competitiveness, only 41% of organizations in the region have embarked on their AI journeys. Those organizations that have adopted AI expect it to increase their competitiveness 100% by 2021.

“Today, every company is a software company, and increasingly, every interaction is digital. To be successful in this new world, organizations need to be a fast adopter of best-in-class technology; and secondly, they need to build their own unique digital capabilities,” said Ralph Haupter, President, Microsoft Asia. “AI is the defining technology of our time that significantly accelerates business transformation, enables innovation, boosts employee productivity, and ensures further growth.  Economies and businesses that have yet to embark on their AI journey run a real risk of missing out on the competitive benefits that are enjoyed by leaders.”

Why adopt AI?

For the organizations that have implemented AI initiatives, the top five business drivers to adopt the technology were (in priority order): Better customer engagement (26% of respondents named it as the number one driver); higher competitiveness (19%); higher margins (18%); accelerated innovation (15%) and more productive employees (9%).

Victor Lim, Vice President, Consulting Operations, IDC Asia/Pacific said: “Last year, organizations that have adopted AI saw tangible improvements in those areas in the range of 18% to 26%. They forecast further improvements of at least 1.8 times in the three-year horizon, with the biggest jump expected in accelerated innovation and competitiveness.”

Fig 2: AI improves business today and in three years

Asia Pacific needs to build on AI strategy, capabilities and infrastructure

The study evaluated six dimensions critical to ensuring the success of a nation’s AI journey. It uncovered that Asia Pacific needs to build upon its strategy, capabilities and infrastructure in order to accelerate its AI journey.

Fig 3: AI Readiness in Asia (Scale of 0.00 – 4.00)
Fig 3: AI Readiness in Asia (Scale of 0.00 – 4.00)

“Asia Pacific is not ready yet for AI. To succeed in AI race, markets in the region need to substantially improve their readiness.  Organizations’ leadership should make AI a core part of their strategy and develop a learning agility culture. They have to continuously invest in this transformative technology for the long-term success, sometimes without immediate returns,” Lim said. “There is an urgent need for talents and tools to develop, deploy and monitor AI models, along with the availability of a robust data estate with the adequate governance.”

Business leaders who are adopting AI face three top challenges: a lack of thought leadership and leadership commitment to invest in AI; a lack of tools and infrastructure to develop actionable insights; and a lack of skills, resources and continuous learning programs.

The study showed that to move ahead on their AI journeys businesses have to create the right organizational culture. More than half of the business leaders and workers surveyed believe that cultural traits that support AI journeys, such as risk-taking, proactive innovation, as well as cross-function partnerships among teams, are not pervasive today.

Fig 4: Cultural Traits in an Organization to Support AI Journeys
Fig 4: Cultural Traits in an Organization to Support AI Journeys

Business leaders must now embrace a new culture, where innovation and continuous learning are core components of the organizational culture. It sets the stage for agility, adaptability and growth,” said Haupter.

Organizations need to address skills challenge for an AI-enabled workforce

The study found that Asia Pacific’s business leaders and workers hold positive viewpoints about the AI’s impact on the future of jobs. Majority (62% of business leaders and 66% of workers) believe that AI will either help to do their existing jobs better or reduce repetitive tasks.

Fig 5: Perception of AI’s impact on jobs (Business Leaders and Workers)
Fig 5: Perception of AI’s impact on jobs (Business Leaders and Workers)

“When it comes to creating or replacing jobs, 18% of business leaders believe that AI will produce new jobs, whereas 15% feel that the technology will replace jobs. Interestingly, workers are more optimistic, with only 5% expecting AI to replace jobs, while 13% anticipate AI to create new ones,” said Lim.

The study also found that workers are more willing to reskill than business leaders believe they are. 20% of business leaders say it may be too difficult for workers to develop new skills, whereas only 14% of workers felt that it was a challenge.

“Microsoft’s vision for AI is first and foremost about people. AI technology cannot progress without them. This means that millions will need to transform themselves into skilled workers as well as learners that an AI future needs,” said Haupter. “It is heartening to see that 84% of businesses prioritize skilling and reskilling of workers in the future. They plan to invest as much, or even more, in human capital than in new technology. Even so, 64% of business leaders have yet to implement plans to help their employees’ to acquire the right skills, which is worrying in today’s context. They must have the urgency to support the fundamental shift in training workers for the future.”

“The jobs of today will not be the jobs of tomorrow, and we have already seen demand for software engineering roles expand rapidly beyond just the tech sector. However, building an AI-ready workforce does not necessarily mean an acute need for technological skills,” added Haupter.

The top three future skills required by business leaders in Asia Pacific include quantitative and analytical skills, digital skills, as well as adaptability and a continuous learning mindset. The demand for all three is higher than the existing supply.

The study also uncovered that business leaders value soft skills more than workers expect. The biggest skills gaps identified were in:

  1. Adaptability and continuous learning (7-pt difference)
  2. Leadership and managing others (7-pt difference)
  3. Entrepreneurship and initiative taking (7-pt difference)

AI Leaders: Robust strategy, capabilities and skills provide an edge

The study identified 6% of organizations which are AI Leaders. These organizations have already incorporated AI into their core business strategy and nearly doubled their business benefits today as compared to other organizations. Compared to the rest of the organizations in Asia Pacific:

Fig 5: Traits of an AI Leader against Followers
Fig 6: Traits of an AI Leader against Followers

For more information, visit

[1] About the study Future Ready Business: Assessing Asia’s Growth Potential Through AI

  • 1,605 business leaders and 1,585 workers participated in this study.
  • Business leaders: Business and IT leaders from organizations with more than 250 staff were polled. Respondents were decision makers involved in shaping their organization’s business and digital strategy.
  • Workers: Respondents screened have an understanding of Artificial Intelligence today, and do not play a role in decision making process within their organization.
  • 15 Asia Pacific markets were involved: Australia, China, Hong Kong, Indonesia, India, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.
  • Industries polled included agriculture, automotive, education, financial services, government, healthcare, manufacturing, retail, services and telco/media.

Tags: ,