This is an extract from “AI and human capital“, the third report of the four-part series, “Asia’s AI agenda”, by MIT Technology Review Insights.
Asia is recognized by senior decision makers as an emerging AI leader, both for its research and development of AI tools and applications as well as deployment of AI solutions to improve enterprise performance. AI will, as a result, have a disruptive impact on employment across the region. It will also enhance job efficacy, performance, and ultimately job satisfaction. These are the findings of a survey of almost 900 senior executives in Asia Pacific, conducted by MIT Technology Review Insights.
Self-reliance and the tech imperative
The criticality of AI for Asian businesses today is easy to assess against the current backdrop of the region’s economic and social transitions. Asia as an economic whole continues to grow at twice the global average. The World Bank estimates that Asia’s GDP grew 6.3% in 2018, compared to worldwide economic expansion of 3%. Yet the Bank predicts that 2019 growth will be lower for all as international trade and investment activity slows, partially informed by trade conflicts. As a result, export-reliant Asia will not only find global trade— its primary growth lever—diminished. Geopolitical tensions will amplify the need for economies around the region to become increasingly self-reliant. To sustain the growth that Asia needs to continue its social and developmental transformation—including improving income levels and quality of life—the region must turn to technology-enabled solutions. Many of these solutions will positively impact economic output for Asia and its workers. Asia has already proven to be a receptive platform for AI innovation. In the report “Asia’s AI Ecosystem,” MIT Technology Review Insights found that in rich and poor countries alike, leveraging the region’s growing AI competency and technologies across all industries and public services has become an urgent priority. And, because Asia has both tremendous pools of AI “natural resources” (data, plugged-in digital consumers, and public and private AI R&D investments), it is possible that many of the world’s key innovations will be developed and scaled up first in Asia.
Given this urgency, and Asian businesses’ increasing familiarity with the effect of AI on their operations, Asian decision-makers feel confident that these technologies will be of tremendous value. As of 2018, nearly half of survey respondents had already deployed AI tools and technologies within their organization. By 2020, more than 90% are expected to have done so.
The survey also found that the most important drivers for AI adoption are those which help firms be more agile and responsive in high-growth, competitive markets. More than half of respondents cited the need to improve customer experience as the most important driver (see Figure 3), followed closely by those who said they used AI to improve the speed and quality of decision-making. Overall operational cost reduction was the third-most-cited driver. However, other reasons more traditionally associated with an automation strategy—such as reducing labor costs, administration, and overall complexity—were lower priorities for respondents.
Shoulder to software
While reducing labor costs was not identified as a top priority for companies in the region, it is certain that increasing the speed of business is absolutely key to competitiveness. The result is that any process involving repetitive work where human interaction or decision-making adds little value is likely to be considered for automation. As we explore in the next chapter, businesses in the region do not see headcount reductions as part of their immediate plans. However, employees will increasingly notice AI technology creeping in. They will need to develop, train, and manage the quality of workplace AI tools, and the evolving nature of their own jobs over time.