Are Singaporean businesses scaling back on AI investments?

A Qlik study reveals that despite 90% of Singapore’s businesses knowing AI is fundamental to success, factors including a lack of trust, data governance challenges, and a lack of skills are hampering AI projects on the island.

In an interesting plot twist, a recent study by Qlik unveiled that over two-third of Singaporean businesses are scaling back AI investment due to trust issues. The findings are based on research by Qlik that involved 4,200 C-Suite executives and AI-decision makers worldwide.

According to the study, data governance issues, insufficient resources, and a lack of AI skills hinder successful AI deployment worldwide, causing many projects to get stuck in the planning stages. But is it really scaling back AI investments?

In Singapore, 90% of senior decision makers believe AI is absolutely essential or very important to achieving success, according to the study. This includes reaching strategic goals and increasing profits. Yet only a handful of AI projects make it out of the planning stage to completion or implementation, with many scrapped before completion.

The study revealed that 34% of Singaporean businesses have over 50 AI projects in the scoping or planning stages, which are not yet live projects – higher than the global average of 11%. And 11% have also had more than 50 projects progress to planning or beyond, only to pause or cancel them entirely, with the global average sitting at 8%.

In order to harness the full potential of their investments, businesses will need to progress their AI projects from planning to successful deployment. However, the challenge in progressing from Proof of Concepts to actual deployment is seeing many AI decision makers (79%) see the value in ready-made AI solutions as a good foundation to enhance AI development.

Despite this, in Singapore, more than two thirds (72%) of AI projects are being developed internally, and most (67%) of the C-Suite executives on the island agree that these are better than ready-made solutions.

So, what’s really the challenge that’s going to hold back AI investments?

According to the report, the challenges faced by Singapore are similar to what the rest of the world is experiencing when rolling out AI. Data governance challenges (26%), budget constraints (28%), and a lack of trusted data for AI to work with (26%) as well as the lack of skills to develop and deploy AI (19%) and roll-out AI once it is developed (23%) are the biggest hindrance for businesses in Singapore.

The lack of trust in AI

Another issue is the lack of trust. Over a third (37%) of AI decision makers globally say their senior managers lack trust in AI, and 42% feel senior employees don’t trust the technology. A fifth (21%) believe their customers don’t trust AI either. What’s more concerning is that 61% say this lack of trust significantly reduces AI investment in their business. This sentiment is higher among businesses in Singapore, at 74%.

Building trust is key to solve this problem. The best way of doing that is by ensuring better knowledge sharing across businesses and its customers. This directly helps to increase that trust and subsequent investment, with 74% of respondents looking to promote the benefits of the technology more within their organisation and to their customers.

For James Fisher, Chief Strategy Officer at Qlik, business leaders know the value of AI, but they face a multitude of barriers that prevent them from moving from proof of concept to value creating deployment of the technology.

“The first step to creating an AI strategy is to identify a clear use case, with defined goals and measures of success, and use this to identify the skills, resources and data needed to support it at scale. In doing so, you start to build trust and win management buy-in to help you succeed,” said Fisher.

At the same time, upskilling the workforce with AI skills can also build trust and ensure AI projects go beyond planning and into successful deployment. This is clearly indicated in the study as well with 75% of C-Suite leaders in Singapore believing the country can become an AI leader. 75% of respondents from Singapore also believe their industries need to be better at nurturing and upskilling staff for AI. The government also plays a role with 78% suggesting the government needs to provide more funding and training in AI.

While trust may be a concern, building the confidence that AI can deliver better value is an imperative. Only then can Singapore businesses truly embrace the full potential of their AI use cases developed and see the value of their ROI. To achieve this, 75% of respondents from Singapore believe their industries need to be better at nurturing and upskilling staff for AI, and 78% think the government needs to provide more funding and training in AI.