Indonesia leads Southeast Asia in AI adoption

The country is well ahead of Singapore, Malaysia, and Thailand, according to a new IDC report.

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 organisations 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%). It is important to note that bimodal distribution is observed in Indonesia.

While Indonesia has the highest adoption rates amongst Southeast Asian countries surveyed, it also has the highest percentage of organisations with no plan to adopt AI within the next 5 years (59%). 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 organisations in Southeast Asia to leverage AI to create differentiating value,” said Chwee Kan Chua, Global Research Director, Big Data and Analytics and Cognitive/AI, IDC Asia/Pacific.

“We expect investments in AI to continue to rise, as more organisations begin to understand the benefits of embedding AI into their business and how data and analytics can help uncover new insights,” 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, organisations in the region still lag 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 organisations’ 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 organisations in the region will catch up quickly. For example, 35% of organisations in Singapore have plans to adopt AI within two years, the highest among as Asia/Pacific countries. 


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