Spending on cognitive and artificial intelligence (AI) systems in Asia Pacific (excluding Japan) is forecast to grow from $458 million in 2017 to $4.6 billion in 2021, according to updated figures from IDC.
The $458 million figure for 2017 is an increase of 53.3% over 2016. IDC is projecting a CAGR of 72.9% in spending over the 2016-2021 forecast period.
“Cognitive and AI is being applied in all kinds of different areas by enterprises seeking to create better customer connections and increase efficiency and insight,” said Ashut osh Bisht, research manager for Customer Insights and Analysis at IDC Asia/Pacific. “Application of cognitive and AI systems is the foundation of the technology led transformation we are seeing drive change across almost every industry segment.”
The banking and healthcare industries are forecast to have the highest spending on cognitive and AI systems this year with investments of $65.5 million and $47.3 million, respectively. Insurance, central government and education will have the highest growth rate for 2016-21, with a CAGR greater than 83%.
The massive implementation of Cognitive and AI solutions in the Asia Pacific (excluding Japan) can be attributed to the fact that all industries will register a CAGR greater than 50% for the 2016-21 period, IDC says.
IDC has identified 23 use cases for cognitive and AI in its Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide.
Digital assistants ($46.3 million) and diagnostic and treatment systems ($41.9 billion) are the highest spending use cases for cognitive and AI. Intelligent processing automation, now the tenth largest use case will see enough investment growth to become the largest use case by spending by 2021 with a CAGR (2016-21) of 104.2%.
Other use cases that will see rapid spending growth over the forecast period are expert shopping advisors & product recommendations (CAGR 127.1%), Public Safety and Emergency Response (111.9%) and Automated Preventative Maintenance response (109.5%).
The majority of spending on cognitive and AI technology will go to software and services. Although software spending growth is expected to slow down after 2019, services spending will experience steady growth throughout the forecast, achieving a five-year CAGR of 86%. Hardware will be the smallest and slowest growing area of spending, despite a robust CAGR of 42.4%.
“A message from technology solution vendors on cost reduction achieved by productivity and efficiency boost is likely to resonate with APeJ customers,” advised Jessie Cai, senior research manager at IDC. “Automation solutions are a compelling investment for organizations in the region more than anything else. Likewise, invest in ensuring good onboarding among new customers, providing them with necessary technical know-how to understand your offered solution.”