Study: PH optimistic about AI but lacks traits needed for adoption

By Espie Angelica A. de Leon

A study conducted by Microsoft and analyst firm IDC showed that the Philippines generally has high expectations about how artificial intelligence (AI) can help local businesses. But at the same time, the country’s enterprises do not have the cultural traits needed for them to successfully adopt AI.

Photo shows (from left) Microsoft PH solutions specialist for data and AI solutions Jek Hermida, RCBC head of digital banking group Margarita Lopez, Microsoft Asia Pacific general manager for enterprise and partner group Ricky Kapur, and IDC Philippines head of operations Randy Roberts

Titled “Future Ready Business:  Assessing Asia’s Growth Potential Through AI,” the study surveyed 109 business and IT leaders from organizations with more than 250 staff and 100 workers in the Philippines. Officials of IDC, Microsoft Philippines (PH) and Asia-Pacific (APAC) presented its key findings at the Hotel Okada Manila on March 21.

According to IDC Philippines head of operations Randy Roberts, figures from the study indicated the positive expectation among those who participated in the survey. AI adoption in the Philippines is now a reality for 45% of enterprises. Regionally, 41% of businesses in Asia have begun their AI journeys.

Survey participants from Philippine companies which have adopted AI reported seeing between 22% – 44% improvement in customer engagement, level of competitiveness, employee productivity, innovation, and margins in their respective organizations.

They also believe that their companies’ customer engagement, competitiveness, productivity, innovation, and margins will be higher by 2021. In terms of margins, they expect figures to more than double in three years’ time. They also anticipate an increase of 1.8% in innovation, 1.7% in productivity, 1.6% in customer engagement, and 1.5% in competitiveness.

These figures are higher than those representing the sentiments of the entire region, said Roberts. “Those are big jumps,” he said. “People have high expectations in the Philippines in terms of the impact that AI is gonna have on their business.”

However, the study also shows that Philippine businesses do not have the kind of corporate culture that breeds and encourages AI adoption. For successful AI adoption, companies should have certain cultural traits, namely empowerment, innovation, collaboration, and the ability to go beyond what is expected of them.

Based on the survey, companies in the Philippines don’t empower employees to take risks, make decisions autonomously, and take part in cross-function collaboration. Proactive innovation is also not allowed. Lastly, employees generally do not go beyond their job descriptions.  

According to Microsoft PH solutions specialist for data and AI solutions Jek Hermida, the leading barriers to AI adoption in the Philippines are thought leadership and leadership commitment to invest in AI; skills, resources and continuous learning opportunities in and outside the organization; AI tools adoption and deployment across the organization.

“Overcoming those barriers and those challenges really requires a cultural shift,” said Hermida. “And as with any cultural shirt, it should require leadership support.”

Yet, the country is at par with the rest of Asia Pacific in terms of culture, strategy, infrastructure, and capabilities for AI but it lags in the areas of investment and availability and access to data. The Philippines also trails behind AI leaders in the region in all areas. The widest gaps are seen in investments, strategy, and data.

In terms of AI’s impact on jobs,  17% of business leaders and 15% of workers believe that AI will create new jobs while 8% of leaders and 5% of workers think that AI will replace existing jobs. Meanwhile, 74% of leaders and 74% of workers said they believe AI will either help them be better at their jobs or reduce repetitive tasks.

The study also notes that 88% of organizations are willing to reskill their employees.

Aside from the Philippines, the survey also covered Australia, China, Hongkong, Indonesia, India, Japan, Korea, Malaysia, New Zealand, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam. Survey takers were from the agriculture, automotive, education, financial services, government, healthcare, manufacturing, retail, service, and telco/media industries.

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