AI to double the rate of innovation in NZ by 2021
By 2021, Artificial Intelligence (AI) will allow the rate of innovation in New Zealand to double. Employee productivity gains are also expected to increase 1.5 times, according to a new AI study released by Microsoft, in partnership with IDC Asia/Pacific.
The research, “Future Ready Business: Assessing Asia Pacific's Growth Potential Through AI”, found more than three-quarters of business leaders polled agreed AI is instrumental for their organisation's competitiveness. However, only 51% of organisations in New Zealand have embarked on their AI journeys. Those companies that have adopted AI expect it to increase their competitiveness by 2 times in 2021.
Microsoft NZ national technology officer Russell Craig says, “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. They also need to build their own unique digital capabilities.
“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.
Why adopt AI?
For the organisations that have implemented AI initiatives, the top five business drivers to adopt the technology were (in priority order): Better customer engagement (46% of respondents named it as the number one driver); higher margins (17%); higher competitiveness (13%); accelerated innovation (12%) and business intelligence (8%).
New Zealand needs to build on AI culture
The study evaluated six dimensions critical to ensuring the success of a nation's AI journey. It uncovered that New Zealand needs to build upon its culture, along with its capabilities and strategy to accelerate its AI journey.
Business leaders who are adopting AI face three top challenges: a lack of thought leadership and leadership commitment to invest in AI; lack of skills, resources and continuous learning programs, and lack of knowledge on how to deploy and monitor AI solutions.
The study showed that to move ahead on their AI journeys businesses must create the right organisational culture. A significant majority of the business leaders and workers surveyed believe cultural traits that support AI journeys, such as risk-taking, proactive innovation, as well as cross-function partnerships among teams, are not pervasive today.
“Business leaders must now embrace a new culture, where innovation and continuous learning are core components of the organisational culture. It sets the stage for agility, adaptability and growth,” said Craig.
Organisations need to address skills challenge for an AI-enabled workforce
The study found that New Zealand's business leaders and workers hold positive viewpoints about the AI's impact on the future of jobs. More than half (67% of business leaders and 55% of workers) believe that AI will either help to do their existing jobs better or reduce repetitive tasks.
The study also found workers are more willing to reskill than business leaders believe they are. Twenty per cent of business leaders say it may be too difficult for workers to develop new skills, while only 4% of workers felt that it was a challenge.
“Microsoft's vision for AI is about people. AI technology cannot progress without them. This means millions will need to transform themselves into skilled workers as well as learners that an AI future needs,” said Craig.
“It is heartening to see 87% 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, 67% of business leaders have yet to implement plans to help their employees obtain 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.
The top three future skills required by business leaders in New Zealand include digital skills and critical thinking and decision making, as well as quantitative, analytical and statistical skills. The demand for these skills is higher than the existing supply.