THE application of artificial intelligence (AI) in businesses will not only increase employee productivity but also double the rate of innovation by 2021, business leaders opine.
According to a study from Microsoft and IDC Asia Pacific titled Future Ready Business: Assessing Asia Pacific’s Growth Potential Through AI, employee productivity is expected to improve by 60% in Malaysia.
The study surveyed 100 business leaders and 100 workers in Malaysia.
However, it notes that while seven in 10 business leaders polled agreed that AI is instrumental for their organisation’s competitiveness, only 26% of organisations in Malaysia have embarked on their AI journeys.
Companies that have adopted AI expect to increase their competitiveness by 2.2 times in 2021.
“Today, every company is a software company, and increasingly, every interaction is digital. To be successful in this new world, organisations need to be a fast adopter of best-in-class technology, and secondly, they need to build their own unique digital capabilities,” says Microsoft Malaysia managing director K. Raman.
“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.”
The study further notes the top five drivers for organisations that have implemented AI initiatives were better customer engagements (31% of respondents), higher competitiveness (31%), accelerated innovation (12%), improved efficiency (12%) and having more productive employees (8%).
“Last year, organisations that have adopted AI saw tangible improvements in those areas in the range of 17% to 34%. They forecast further improvements of at least 1.6 times in the three-year horizon, with the biggest jump expected in accelerated innovation, higher competitiveness and better customer engagements,” says Chin Jun-Fwu, research director for IDC Asia Pacific Datacenter Group.
The study uncovered that Malaysia needs to focus on improving on all areas, particularly its data and investments, in order to accelerate its AI journey.
“Malaysia is not ready yet for AI. To succeed in the AI race, Malaysia needs to substantially improve its readiness.
“Organisations’ 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.
“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,” adds Chin.
The top three challenges faced by business leaders who are adopting AI include a lack of thought leadership and leadership commitment to invest in AI, a lack of skills, resources and continuous learning programmes as well as a lack of advanced analytics or adequate infrastructure and tools to develop actionable insights.
The study showed that to move ahead in their AI journeys, businesses must create the right organisational culture to enable more risk-taking, proactive innovation and cross-function among teams.
Interestingly, the study found that Malaysia’s business leaders and workers generally hold positive viewpoints about AI’s impact on the future of jobs.
About 67% of business leaders and 64% of workers believe that AI will either help them do their existing jobs better or reduce repetitive tasks.
“About 17% of business leaders believe that AI will create new jobs, while 10% also feel that the technology will replace jobs.
“Workers are more optimistic, with only 7% expecting AI to replace jobs, and 18% to create new ones. At the same time, almost 11% of workers expect no impact to their jobs three years from now,” says Chin.
The study also found that workers are more willing to reskill than business leaders believe they are. Some 23% of business leaders felt that workers have no interest to develop new skills, but only 10% of workers were not interested.
“It is heartening to see that 82% of businesses prioritise 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, 72% of business leaders have yet to implement plans to help their employees’ 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,” notes Raman.
“As technology changes the rules of business, it is imperative to future-proof the Malaysian economy by building a strong digital innovation ecosystem. The potential of AI is far from being fully exploited.
“Malaysian businesses need to jump onto the bandwagon to embrace digital transformation and leverage digital technologies such as AI to accelerate the shift towards IR4 and retain their competitive edge,” says Malaysia Digital Economy Corporation (MDEC) data economy director Dr Karl Ng Kah Hou.
MDEC expects to complete the development of the National Artificial Intelligence (AI) Framework by year-end to drive the country’s AI ecosystem.