Spending on Cognitive and Artificial Intelligence to Grow Nearly 70% in APAC in 2021

Artificial Intelligence, market research

Spending on cognitive and artificial intelligence (AI) in Asia Pacific excluding Japan will grow a five-year CAGR of 69.8% to US$5.0 billion in 2021, according to IDC’s estimates.

The research firm expects the spending to hit US$1.0 billion this year, an annual increase of 94% over 2016, mainly led by software and services related technologies.

“Automated Customer Service Agents and Intelligent Processing Automation are implemented by all the industries with a varied degree of penetration. AI/Cognitive system is one of the foundations of a digital transformation initiative and around 70% of enterprises will use AI Services by 2021,” Ashutosh Bisht, Research Manager at IDC Asia Pacific.

Banking, retail, healthcare to lead in AI investment

Banking industry is a major feeder market in terms of cognitive/AI spending, estimated to  add around US$140.7 million in 2018 backed by different use cases including fraud analysis and investigation, IT automation, automated customer service agents and program advisors and recommendation systems. said IDC.

Retail is the second leading industry, predicted to invest around US$112.7 million this year on a range of AI use cases which includes expert shopping advisors & product recommendations, automated customer service agents, merchandising for omni channel operations and supply and logistics, IDC added.

Healthcare provider industry placing at third position allocates most of its US$87.6 million investments to its diagnosis and treatment systems.

Top use cases

Automated customer service agents, sales process recommendation and automation, and digital assistants for enterprise knowledge workers are the three major use cases with 11.5%, 9.1% and 9.0% respectively share to the overall cognitive/AI use cases spending in 2018, IDC pointed out.

Over the forecast period of 2017-21, expert shopping advisors & product recommendations, automated claims processing and intelligent processing automation use cases will register exceptional increase with five-year compound annual growth rate of 91.2%, 88.4% and 85% respectively, the analyst firm noted.

“The cognitive/AI solution market is fast growing in APeJ and the demand within enterprises will mostly rise due to increased pressure to reduce operational cost,” said Jessie Cai, Senior Research Manager at IDC Asia Pacific. “Organizations need to take note that the availability, quality and continuity of scenario-specific training data should be reviewed to best utilize cognitive/AI technologies.”

China the top market in the region

China is a top market in Asia Pacific (excluding Japan) with greater share of 65.5% to the overall spending, IDC observed.

Automated customer service agents and sales process recommendation and automation are the leading use cases in China, which represents 25.6% share with the ongoing popularity of AI, chatbots and automated, self-service technologies.