More than half of Australian organisations have started to adopt artificial intelligence, but strategies and capabilities remain immature and Australia is beginning to lag its regional neighbours, according to new research from Microsoft.

Along with IDC Asia/Pacific, Microsoft interviewed with more than 1,600 business leaders and 1,500 workers across Asia Pacific, including 118 and 102 respectively from Australia for its new report, Future Ready Business: Assessing Asia Pacific’s Growth Potential Through AI.

It found despite an acknowledgement of the potential of AI, Australian organisations have been reluctant to invest heavily in the technology and organisations lack the skills and leadership commitment to drive uptake.

80 per cent of Australian business leaders believe AI is important to their organisation’s competitiveness over the next three years, but only 54 per cent have begun work on AI as part of their business strategy, according to the study.

17 per cent haven’t yet considered AI, 29 per cent are waiting for the technology to mature and 40 per cent are in the experimental stage.

Source: Microsoft, IDC; Future Ready Business: Assessing Asia Pacific’s Growth Potential Through AI.

Just 14 per cent of Australian organisations surveyed have adopted AI as a core part of their business strategy.

“We are at a critical point in Australia where in just a few  years we will see a massive gap between organisations who have embraced AI and those that have not,” said Steven Worrall, Managing Director, Microsoft Australia.

Steven Worrall, Managing Director, Microsoft Australia

“AI is the defining technology of our time and has the potential to significantly accelerate business transformation, enable innovation, boost employee productivity and ensure future growth. Australian businesses that have yet to invest in an AI strategy, and crucially identified the skills and capability they need to support them with this strategy, run a real risk of falling behind.”

While Australia struggles with AI capabilities and strategy, compared to the APAC region, it does outperform its neighbours in terms of culture, Investments and data.

Why Australia is struggling with AI

According to the research, Australian organisations face key AI challenges around a lack of skills, resources and continuous learning programs (28 per cent); and a lack of leadership commitment to invest in AI (25 per cent).

It’s a tight market everywhere for AI skills, but most Australian organisations aren’t providing any support, according to the study. 60 per cent of business leaders have yet to take any steps to help their people acquire AI related skills. That is despite 56 per cent of business leaders saying they would invest more in employee skills than in AI technology itself.

Suggesting again, that AI talk is cheap in Australia.

One solution offered by Microsoft for overcoming the AI gap is to focus on culture. The study found organisational culture is critical for businesses to embrace AI. But currently workers and business leaders are misaligned on the AI readiness of their culture, according to the research.

The cultural traits that support AI adoption like risk-taking, proactive innovation, and going beyond job descriptions, are not widely present in Australia, the study found. Employees perceived the lack of culture to be a bigger problem than business leaders.

“I am firmly of the belief that investing in the right skills and creating the right cultural environment for innovation to succeed, are crucial to the success of any AI strategy,” said Worrall.

“However, the lack of urgency in implementing training plans to help people acquire the necessary skills to succeed in an AI-enabled world, gives some cause for concern.”

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