The landscape of artificial intelligence (AI) adoption and maturity in Asia-Pacific (APAC) has undergone a remarkable transformation. With the convergence of technological advancements, changing consumer expectations, and a drive towards innovation, businesses have embraced the potential of AI to propel themselves forward.

In response to economic headwinds, AI investment strategies have undergone significant changes. Businesses in ANZ are placing greater emphasis on AI use cases that may increase employee productivity, reduce costs or enhance operational efficiency.

The rate of AI adoption in Australia and New Zealand (ANZ) is no exception, with AI platforms predicted to be the fastest-growing software category between 2022 and 2026 in ANZ. Notably, in 2022, 21.4% of the investment made in AI across APAC was by businesses operating in ANZ, according to the recent IDC AI Adoption InfoBrief commissioned by Dataiku.

In the rush to adopt AI technologies, the heightened investments need to remain measured. With the potential artificial intelligence (AI) and machine learning (ML) have to empower its users, informed decision-making to adopt the correct AI solution should be top of mind for decision-makers.

APAC before the AI revolution

It will come as no surprise that the pandemic accelerated business adoption of AI-driven solutions, particularly in industries like manufacturing and financial services. This trend has continued, and we are witnessing substantial investment in AI/ML solutions.

One particular focus area for APAC businesses, pre the AI and ML boom, was improving customer experience. The explosion of technologies has allowed for rapid progression in customer experience (CX) delivery, with APAC businesses reporting a 30% improvement in the exercise, stemming from their investment in AI. But swift adoption of novel technologies has not always been the case for APAC businesses.

Until recently, the APAC region lagged in AI adoption. In 2021 and 2022, a mere 39% of APAC businesses leveraged AI in their operations whereas now a staggering 76% of businesses in the APAC region are utilising AI to drive growth, efficiency and innovation. Australia has emerged as a frontrunner in this surge of AI adoption. For the retail industry, 32% apply AI to increase the speed of new product development.

The state of AI adoption

Australia has lagged behind the world in its rate of digital transformation. Approximately 70% of businesses have yet to achieve the global standard. AI presents a solution to accelerate this metric and we anticipate a rapid increase in the rate of digital transformation driven by AI and ML. Forecasts see investments in this area exploding to $2.2B by 2026, a significant increase from $482M in 2022.

A major driving force behind this paradigm shift is the realisation of the immense value that AI can bring. Australian enterprises understand that investing in AI and ML is a strategic decision to unlock new opportunities, enhance operational efficiency, and gain a competitive advantage. As a result, industry projections see businesses in Australia increasing their spending on AI and ML by 65% in 2023. Investing AUD$17B and accounting for 14.5% of AI investments, APAC retail and wholesale industries will stand out in this increased spending.

Maturing in the AI market: Investment and use

Australian businesses are leveraging daily the capabilities of AI to transform product development processes and bring more innovative solutions faster to market. Employees find newfound agility when they apply AI to a business’s everyday operations. AI has benefited local ANZ businesses already by increasing the speed and calibre of product quality inspections, predictive or preventive maintenance, physical asset management, and intelligent cybersecurity solutions, just to name a few.

As AI continues to mature, its applications are expanding, particularly in the area of sustainability. AI now can drive smarter, more efficient energy management and to handle biodiversity data. In the APAC region, many businesses have prioritised sustainability, making substantial advancements. Since beginning to utilise AI, these businesses have seen a 29% improvement in sustainability.

Further, sustainability is just good business for retailers and wholesalers. In Australia and New Zealand, the public’s engagement with sustainability is strong with an analysis by EY showing 90% of Australians are engaged to some degree on the topic of sustainability. This widespread interest in sustainability emphasises the potential role of AI in advancing sustainability initiatives, reflecting a growing public desire for responsible and innovative solutions.

Going forward

To harness the power of AI, businesses must employ it efficiently to generate impactful results. This entails leveraging AI technologies that align with strategic objectives, optimising data governance and management practices, and fostering a culture of innovation and continuous learning. By embracing the possibilities of AI, we will unlock new frontiers of growth, revolutionise industries, and redefine the way we operate.

Grant Case is regional vice president & head of sales engineering for APJ at Dataiku.