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Indonesia leads ASEAN region in AI adoption

The sprawling archipelago of more than 260 million people is becoming a hotbed for adoption of artificial intelligence, led by digital native companies such as Go-Jek and Kaskus

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Indonesia is leading the ASEAN region in adopting artificial intelligence (AI), with 24.6% of organisations in the sprawling archipelago adopting the technology, a new survey has found.

Indonesia was followed by Thailand (17.1%), Singapore (9.9%) and Malaysia (8.1%), according to the IDC Asia-Pacific Enterprise Cognitive/AI survey.

Chwee Kan Chua, global research director for big data and analytics and cognitive/AI at IDC Asia-Pacific, said AI adoption in Indonesia has been led by organisations with a digital-first mindset that consume large volumes of data – something that AI thrives on.

Jason Loh, head of analytics at SAS Asia-Pacific, noted that spurring the AI push were internet companies such as Go-Jek, the ride-hailing and online payment giant, and Kaskus, Indonesia’s biggest online forum and marketplace.

The survey found that AI adoption in ASEAN has nearly doubled in a year, with current adoption rates standing at 14%, compared with 8% a year ago. The top uses of AI were algorithmic market forecasting, and automated asset and infrastructure management. 

As for adoption drivers, discovering better business insights was most important to 52% of respondents, moving up from being the third-most important factor in 2017 – a sign of growing maturity in the region. Other top drivers this year were improving productivity and enhancing process automation.

Despite the increase in adoption, ASEAN organisations still lagged behind their North Asian counterparts in making AI a strategic agenda.

For example, more than 80% of companies in China and South Korea believed AI capabilities would be critical for organisational success and competitiveness in the coming years, but less than 40% of companies in Singapore and Malaysia felt that way.

However, ASEAN organisations could soon catch up in AI adoption. For example, 35% of organisations in Singapore said they plan to adopt AI within two years, the highest among Asia-Pacific countries.

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During a briefing earlier this week, IDC’s Chua also highlighted the different maturity levels in AI adoption across industries in the region.

While e-commerce firms had embraced AI, and financial services and public sector organisations were more mature in using the technology, others were less ready. The most frequent barriers to adoption included lack of skills and knowledge, and high implementation costs.

Challenges also varied across sectors. Organisations in the financial services industry faced more challenges in data federation and model building, while public sector organisations were hindered by data readiness issues.

“The key trend is to get away from talking about AI,” said Jason Mann, vice-president for internet of things at SAS. “It’s really a path to resolve an existing business pain, driving new business opportunities and improving top-line growth or bottom-line efficiencies.”

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