Cyber Monday Sale! 50% Off All Access

Which Countries Are Ready for AI Adoption? Among the main reasons for embracing artificial intelligence is a low productivity growth

By Nidhi Singh

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

Shutterstock.com

The artificial intelligence (AI) sector is gaining popularity across the world. Tech firms like Google, Microsoft and Apple are integrating the technology across its offerings. Countries like US and China have always been on the forefront at the AI game but smaller nations are also pushing for its adoption.

According to a report released on 27 September by McKinsey Global Institute, South Korea has "strong comparative strength" in terms of readiness for AI technologies along with Canada, France, and Sweden. These countries are relatively well positioned to capture the benefits of AI, given their generally robust foundation of enablers, says the study, "Notes From The Frontier Modeling The Impact Of AI On The World Economy", which surveyed 41 countries using various indicators for the macro dimensions. The study found that there may be four groups of countries that share relatively similar degrees of preparedness, based on currently available data.

Technology Readiness

Many of these economies are highly motivated to embrace AI because they have been experiencing slowing productivity growth, says the study.

Another incentive is that labour costs tend to be high in these economies, especially advanced ones. Several large economies belong to this group—including Germany, Japan, and the UK—that have the capacity to drive innovation on a major scale and to accelerate the commercialization of AI solutions. Smaller, globally connected economies such as Finland, Singapore, South Korea, and Sweden typically score highly on their ability to foster productive environments where novel business models can thrive.

The Frontrunners

As per the study, the US and China are active global leaders. They are currently leading the race to supply AI and have unique strengths that set them apart from all others. Scale effects enable more significant investment, and network effects enable these economies to attract the talent needed to make the most of AI. Together, they are responsible for the vast majority of AI-related research activities, says the study.

US and China are also a long way ahead of other countries on AI-related patents, publications, and citations, says the study. They also make a substantial investment in AI. In terms of external investment, including venture capital, private equity, and mergers and acquisitions (M&A), in 2016 the US accounted for 66 per cent, while China was a distant second with 17 per cent. However, China's share is growing rapidly. These nations also have solid enablers. In 2016, they invested about 2 to 3 per cent of gross domestic product (GDP) in overall research and development (R&D). Depending on national priorities and business opportunities, these huge investment capacities could be channeled into AI.

Nidhi Singh

Former Correspondent, Entrepreneur Asia-Pacific

A self confessed Bollywood Lover, Travel junkie and Food Evangelist.I like travelling and I believe it is very important to take ones mind off the daily monotony .

Business News

'This Company Has Been My Life': Intel CEO Retires, Reportedly Forced Out

Intel CEO Pat Gelsinger has led the company since February 2021 and said his departure is "bittersweet."

Business News

'I Stand By My Decisions': A CEO Is Going Viral For Firing Almost All of the Company's Employees — Here's Why

The Musicians Club CEO Baldvin Oddsson fired 99 workers at once over Slack for missing a morning meeting. But there's a catch.

Fundraising

They Turned Down an Early Pay Day to Maintain Control of Their Business. And Then Went on to Raise $190 Million.

Jason Yeh, co-founder and General Partner of Patron, explains the early-stage venture firm's creation and future outlook.

Business News

'Something Previously Impossible': New AI Makes 3D Worlds Out of a Single Image

The new technology allows viewers to explore two-dimensional images in 3D.

Franchise

Subway's CEO Steps Down Amid a Major Transition for the Sandwich Giant

John Chidsey will step down at the end of 2024, marking the close of a transformative five-year tenure.