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Asia Pacific (excluding Japan) spending on cognitive and artificial intelligence (AI) systems is forecast to reach $4.6 billion in 2021, according to a recent update of the IDC Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide. Cognitive and AI spending is expected to achieve a compound annual growth rate (CAGR) of 72.9% over the 2016-2021 forecast period. APeJ spending on cognitive and AI systems will total $458.0 million in 2017, an increase of 53.3% over 2016.
“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. Application of cognitive and AI systems is the foundation of the technology led transformation we are seeing drive change across almost every industry segment” said Ashut osh Bisht, research manager for Customer Insights and Analysis at IDC Asia/Pacific.”
The banking and healthcare industries are forecast to have the highest spending on cognitive and AI systems in 2017 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 have a CAGR greater than 50% for 2016-21.
IDC has identified 23 use cases for Cognitive and AI within their Cognitive and AI 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 2016-2021 forecast are expert shopping advisors & product recommendations (CAGR 127.1%), Public Safety and Emergency Response (CAGR 111.9%) and Automated Preventative Maintenance response (109.5% CAGR).
Majority of spending on cognitive and AI technology will go to software and services. Over the course of the forecast. 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 86.0%. Hardware will be the smallest and slowest growing area of spending, despite a robust CAGR of 42.4%.
As per Jessie Cai Senior Research Manager at IDC “A message from technology solution vendors on cost reduction achieved by productivity and efficiency boost is likely to resonate with APeJ customers. Automation solutions is 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.”
About IDC Spending Guides
IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of IDG, the world's leading technology media, data, and marketing services company.