5 ways Asia-Pacific economies can operationalize AI to unlock economic opportunity

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Sassoon Grigorian, Vice President, Asia Pacific Government Affairs, Salesforce

• For countries to succeed in the age of generative AI, they need strong institutional, infrastructural, organizational and ethical foundations.
• In Asia-Pacific, economies such as Singapore, China, Japan, South Korea and Australia have put in place policies that should help them capture the opportunities offered by generative AI.
• That’s according to the latest Asia Pacific Readiness Index from Salesforce, which measures the AI readiness of 12 countries across the region.

Artificial Intelligence (AI) has become an everyday reality for consumers, businesses and governments globally. The emergence and evolution of generative AI — technology that takes a set of data and uses it to create something new — accelerated in 2023. Across the world, consumers are using generative AI for daily information needs, and organizations are incorporating it into their operations.

As one of the most transformative technologies to date, generative AI helps users achieve new levels of creativity, productivity and effectiveness, and is changing the way governments and businesses are thinking about AI. A recent study found that two-thirds (67%) of IT leaders are prioritizing generative AI for their business within the next 18 months, with one-third (33%) claiming it as a top priority. Similarly, 72% of companies surveyed say they will significantly increase their investments in AI over the next three years.

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How is the World Economic Forum creating guardrails for Artificial Intelligence?

In response to the uncertainties surrounding generative AI and the need for robust AI governance frameworks to ensure responsible and beneficial outcomes for all, the Forum’s Centre for the Fourth Industrial Revolution (C4IR) has launched the AI Governance Alliance.

The Alliance will unite industry leaders, governments, academic institutions, and civil society organizations to champion responsible global design and release of transparent and inclusive AI systems.

The growing investment in and adoption of generative AI could also bring enormous economic gains globally. A recent McKinsey study projects that generative AI could add between $2.6 trillion and $4.4 trillion annually to the global economy by 2030.

In the Asia-Pacific region, generative AI drives significant economic opportunities. In Australia, it is estimated that generative AI could contribute up to AUD 115 billion (around $76 billion) annually to the economy by 2030, depending on adoption and how workers transition to other tasks. In Japan, it is estimated generative AI could unlock JPY 148.7 trillion (around $1.1 trillion) in productive capacity.

Five pillars that determine AI readiness

For Asia-Pacific countries to succeed in the dynamic AI environment — including the adoption of generative AI — their economies require a sufficient level of AI readiness. Strong institutional, infrastructural, organizational and ethical foundations around AI will be critical to success now and in our global AI future. The five pillars that determine AI readiness include:

1. Infrastructure

Because of the vast amounts of data generated and utilized, generative AI models require massive computational resources and specialized hardware. Determining the compatible technical infrastructure necessary for the intensive processing is the first step towards AI readiness.

2. Data

Generative AI models require large amounts of high-quality training data to learn meaningful patterns and generate realistic content. It is crucial to build a strong foundation of quality data and continually iterate, as it will determine a model’s outcomes and success.

3. Workforce development

Generative AI will have implications for the workforce across all industries and will likely change the focus within certain jobs rather than replace jobs entirely. Successful AI means enhancing — not replacing — the human workforce. Nevertheless, there will be significant demand for AI skills. Governments and businesses need to cultivate a strong pool of AI talent to meet the market’s demand for skilled AI professionals that are required in all segments of the economy.

4. Ethics

While generative AI has the potential to profoundly change the way we live and work, it is not without risks. There are ethical concerns, such as the potential for biased or harmful content. It is important to prioritize responsible, ethical innovation from the start and ensure technologies brought to market are inclusive and intentionally built for all.

5. Integration

AI readiness also encompasses the ability to integrate generative AI models into real-world applications and workflows. While the four other pillars are incredibly important to achieving AI readiness, the integration of generative AI models will be essential for more scalable, flexible, effective technology in the future.

AI readiness of Asia-Pacific economies in 2023

To help Asia-Pacific economies assess businesses’ and governments’ readiness to adopt, deploy and integrate AI, Salesforce released the 2023 Asia Pacific Readiness Index, the third edition of this bi-annual Index. The Index measures the AI readiness of 12 countries across Asia Pacific, and for each country its impact on socio-economic opportunities through 15 statistical indicators.

While overall AI readiness of Asia-Pacific economies has advanced across the region, the 2023 Index found a growing divide between economies based on their readiness to adopt the technology.

Out of the 12 economies covered in the 2023 edition, five (Australia, Indonesia, New Zealand, Singapore and Thailand) have seen their overall AI readiness improve from their 2021 score. This is a direct reflection of the many AI-related initiatives those economies have launched and implemented between 2021 and 2023.

Singapore holds the number one spot for the third consecutive time since 2019, the result of a largely conducive policy and business environment. Respectively ranked 2nd and 3rd, Japan and China have developed and implemented several forward-looking initiatives to frame and enable AI adoption by all aspects of the economy. South Korea (4th) and Australia (5th) — two economies that are also prolific in the AI space — close off the top five.

The 2023 Index findings show that despite Asia-Pacific economies’ varying degrees of AI readiness and their differing approaches, all of them are prioritizing the advancement of AI and generative AI. Compared to 2019 and 2021, AI is now at the top of national agendas for all economies, the implementation of national AI strategies is well underway, and awareness of the potential impact of AI for economic growth and development is at an all-time high.

AI is not just a technological issue; increasingly it is becoming a core driver for economic growth and promotion of digital trade across Asia Pacific. AI also has a greater implication for society, as it can be transformative for capital and labour relations, and encourage more sustainable and inclusive forms of economic growth.