Considering that artificial intelligence is expected to contribute an additional $15.7 trillion USD to the global economy by 2030, it’s no surprise that many companies are wondering how to incorporate this technology into their business platforms. In the search for successful role models, industry experts often turn to China. The country boasts the world’s most valuable AI tech companies in computer vision, drones, speech recognition, speech synthesis, and machine translation. Supported by enormous investments and advantageous government policies, China’s AI market is predicted to grow by 75% in 2018.
In a recent survey of companies in Southeast Asia, 37% plan to adopt AI technology in the next five years. For these businesses, there are valuable lessons to be learned from China.
A focus on practical applications
According to Kai-Fu Lee in The New York Times, China has surpassed the United States in AI implementation. Whereas the U.S. is focused on visionary research and freewheeling intellect that helps create new technologies, China is focused on practical business applications of that technology, even in mundane sectors.
For example, Alibaba, the world’s largest e-commerce marketplace with $248 billion USD in transactions, has utilised artificial intelligence to optimise their product development, sales process, and supply chain. In specific, their chatbot can comprehend more than 90% of its 3.5 million customers’ daily questions, their website can recommend products to customers and provide corresponding information to inventory, and their warehouse has more than 200 robots that can process 1 million packages each day and sometimes deliver them using drones.
Alibaba is also one of China’s largest R&D spenders, financing seven laboratories that focus on AI, machine learning, network security, and natural language processing. In the single largest investment in the AI sector, they infused $600 million USD in Sensetime, a startup focused on facial-recognition, in order to support the commercialisation of its AI technology.
Improved data access
Artificial intelligence technology requires an immense amount of data input in order to function effectively. Due to its population size and smartphone app penetration, China can feed its AI a breadth and depth of data that no other country can replicate. However, the country can still provide useful lessons when it comes to how companies access data.
According to research from MIT, out of the top one-fifth of Chinese companies in understanding and adopting AI, 78% pool their corporate information in centralised data lakes, compared with only 37% and 43% of European and U.S. AI leaders, respectively. In a coordinated effort between companies with potentially conflicting business interests, China demonstrates a culture that emphasises communal knowledge to the benefit of all.
Another example of this attitude is Alibaba’s City Brain project, a cloud-based AI system that analysed massive logs, videos, and data streams from every vehicle in Hangzhou, China and eventually reduced traffic jams by 15%. Cities and companies that not only prioritise data collection but also make it widely available have the ability to make meaningful changes.
Aggressive AI adoption and competition
Among countries in the Association of Southeast Asian Nations (ASEAN), Indonesia is a leader in AI strategy with almost 25% of organisations adopting the technology. However, at the same time, the country also has the highest percentage of organisations (59%) with no plans to employ AI over the next five years.
In contrast, more than 80% of Chinese and South Korean companies state that AI technology will be vital for their future prospects. Even non-tech Chinese companies are investing heavily in AI and modifying their business strategies accordingly. Although this bandwagon approach may not be efficient on an individual level, overall it benefits the marketplace by creating more opportunities for successful AI implementation.
Chinese companies exude a similar aggressiveness when it comes to competition. For every profitable business idea, another company will attempt a slightly different permutation, which in the aggregate, creates a more dynamic ecosystem that promotes adaptation and reduces the stigma associated with failure and risk. This iterative approach to industry transformation can yield immense breakthroughs for AI technology.
China’s success in the industry is due in no small part to government support. In July 2017, the State Council released a roadmap for the country to become a world leader in artificial intelligence. This plan includes milestones to develop new technology and standards by 2020, major breakthroughs and economic transformation by 2025, and growth of the industry to approximately $150 billion USD by 2030.
In conjunction with these milestones, the government has been extremely willing to adapt public infrastructure and institutions to better to help private companies flourish. Although not all governments in Southeast Asia will be as amenable to altering the country to support AI development, they can still create incentives, partnerships, and beneficial regulatory environments.
With its own demographics, culture, and history, China’s leadership in the AI industry cannot be exactly copied. However, taking a page from their own competitive playbook, Southeast Asian companies would benefit from learning general lessons from the country’s success and finding creative ways to apply it at home. Prioritising practical business applications, increasing accessibility to data resources, aggressive adoption and competition, and beneficial government policies will be the keys to driving AI technology in Southeast Asia.
Originally published on TECH COLLECTIVE.
The Muslim travel market is growing, but where are its unicorns?The Muslim travel market is growing, but where are its unicorns?
Grab and Go-Jek’s dominance is not deterring upstarts, these are their ride-hailing competitors in Southeast AsiaGrab and Go-Jek’s dominance is not deterring upstarts, these are their ride-hailing competitors in Southeast Asia
The journey of Indonesia’s unicorns in 2018The journey of Indonesia’s unicorns in 2018
Philippine startups lag behind Southeast Asian counterparts in 2018 funding, but 2019 looks rosyPhilippine startups lag behind Southeast Asian counterparts in 2018 funding, but 2019 looks rosy
Vietnam has become Asia’s hottest investment destinationVietnam has become Asia’s hottest investment destination