Effective adoption
APAC as a whole invests its money more effectively and creates more business value from its initiatives — particularly China
Generative AI Radar: APAC
Although APAC companies spend less proportionally compared to the region’s economy, they still lead the way on generative AI adoption. The region as a whole spends its money more effectively and creates more business value from its initiatives — particularly China.
We calculated a score to measure the effectiveness of spending on generative AI. This score is the percentage of companies that would create business value from generative AI for every 0.01% of GDP spent. For example, China leads the world with an effectiveness score of 37.1 – which means that 37% of Chinese companies can expect to create business value from generative AI for every 0.01% of GDP spent. This is more than triple the North American score (Figure 3).
Figure 3. Effectiveness score of APAC countries compared to Europe and North America
Source: Infosys Knowledge Institute
As we noted above, China’s position here reflects its mature technology sector; anecdotally, China is already using generative AI widely. The huge Chinese e-commerce platform and cloud services provider Alibaba has built several generative AI tools on the platform, including a way for customers to ask for personalized product recommendations, and a coding assistant. In June 2023, the Beijing Academy of AI released its own open-source LLM that can operate in both English and Chinese.
Although they trail China, Australian companies are ahead of businesses in all other nations, with an effectiveness score of 17.4. The picture is similar in New Zealand (11.6). Despite its small overall spending, companies in New Zealand use generative AI more effectively than businesses in Singapore, Europe, and North America.
This effectiveness score supports our findings on AI maturity, which we define as a spectrum with four steps: The least mature organizations are the ones with no existing generative AI initiatives, followed by an experimentation phase, an implementation phase, and then the most mature are those now generating business value from the technology (Figure 4).
Figure 4. Generative AI adoption phase by region
This provides a snapshot of the journey undertaken by organizations as they deploy emerging technologies. It also highlights business value as a distinct marker of how generative AI is being used and how often it is used most effectively.
APAC is the most mature region in implementation and established use cases. China and North America lead the world in the proportion of companies that have created business value from generative AI, with 15% or more companies doing so (Figure 5).
Figure 5. Companies creating business value with generative AI by country and region
Japan and China also lead with almost 50% of their companies that have implemented or are currently implementing generative AI solutions (Figure 6).
Figure 6. Companies in the implementation phase by country and region
Although Australia and New Zealand are progressing more slowly with generative AI, the effectiveness scores suggest that this more cautious approach is nonetheless yielding business value. This is perhaps due to early support for AI from their governments to build AI maturity, such as the Australian government’s launch of its AI Action Plan in 2021.
Data at that time suggested that most Australian businesses were at an initial “thinking about it” phase, whereas our new research has found that 44% have been at least experimenting with generative AI and defining proofs of concept over the past 12 months. Nearly one-third say they were either implementing or had implemented generative AI solutions or had actually established use cases that create business value.
In New Zealand, the adoption has been slower, with more than half telling us they were experimenting with generative AI or defining proofs of concept, and just 2% deriving business value. But as we noted above, the spending effectiveness by New Zealand companies led most Western economies that we surveyed.
Our effectiveness score shows that APAC countries are benefiting more from their generative AI spending, despite the lower budgets and lower maturity in ANZ.
In addition, we found that midsize ANZ companies were leading the adoption of generative AI, which bucks the global trend. In North America and Europe, the largest businesses have the greatest generative AI maturity. As a result, APAC has the smallest proportion of companies expected to spend more than $10 billion on generative AI in the next 12 months, at 3.5% (Figure 7).
Figure 7. Generative AI spending increases
