What’s behind the success of Asia’s AI powerhouses?

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When it comes to artificial intelligence (AI), the world is looking toward Asia.

According to the International Data Corporation (IDC), spending on AI will grow by more than 37 per cent in the coming years to reach more than $77 billion by 2022. In fact, it’s estimated that such extraordinary growth will see Asia’s AI market overtake the United States by 2025.

The promise AI offers cannot be understated. From significantly higher levels of automated business processes to greater insights into customer behaviour, advances in AI are integral to the success of Industry 4.0, smart cars, smart homes and other cross-industry initiatives.

Yet, in addition to having the requisite software and data, we believe the success of future AI implementation is also linked to the strength of the supporting network infrastructure to supply high-performance connectivity.

Identifying AI leaders in the Asian Digital Transformation Index

Telstra recently commissioned the second edition of the Asian Digital Transformation Index, an in-depth study by The Economist Intelligence Unit (EIU) that ranks 11 Asian economies in terms of their digital infrastructure, human capital and industry connectedness.

This year, we added four new indicators to the Index to address the new key technology enablers of digital transformation, including AI and the core infrastructure improvements that are required to enable it.

Those developments not only include installation of fibre to both the home and to the node, but also planning for new innovation in 5G networks. The Asian Digital Transformation Index shows Asia’s progress across all areas.

The Asian Digital Transformation Index identifies three Asian countries in its analysis of world leaders in AI development. Sitting alongside the UK and the US (included in the analysis as comparator countries) are Mainland China, Japan, and South Korea – all five of which scored the top possible marks for AI development.

Asian AI leaders investing in network infrastructure.

Those countries leading the way in AI offer key lessons for others when we look at their investment in network infrastructure.

Mainland China ranks second in the analysis of fibre network take-up, covering adoption of fibre to the home or building. The EIU notes that this measure represents the commercial success of high-speed broadband in the country, with only Singapore showing greater results. Indeed, China continues to be at the forefront of fibre adoption, adding nearly 63 million fibre-to-the-home connections in the 12 months to the end of Q1 2018 China – comprising 80 per cent of such new connections globally.

Meanwhile, Japan ranks equally strongly when it comes to the proportion of its population covered by 4G networks. As much as 94.7 per cent of the country has access to 4G connectivity, second only to South Korea in this measure.

Finally, South Korea is renowned for its hyper-connected infrastructure. Living up to that reputation, the country is already planning for the next generation of infrastructure by progressing its implementation of 5G technology. South Korea is one of six countries scoring the maximum marks for its 5G development, alongside India, Singapore, the UK, the US, and Australia.

The South Korean government recently completed a 5G spectrum auction, with operators deploying network infrastructure at the end of 2018 and commercial services expected in 2020. These development cycles are important because 5G infrastructure involves more than cell sites, base stations and towers. Upgrading transmission networks with ultra-high speed fibre is an integral part of deployment plans.

Asia leads the way in innovation infrastructure

As the Asian Digital Transformation Index shows in the examples of Mainland China, Japan and South Korea, core connectivity – whether via 4G and fibre now, or 5G in the future – is absolutely critical to the development of disruptive emerging technologies like AI. But it’s not just AI, but other game-changing technologies such as IoT and data analytics too, that require a powerful and reliable connectivity.

By focusing on building up their infrastructure investment, it’s likewise possible for other countries to spur their own digital transformation success. This will position them strongly to tap the immense potential of emerging technologies, and become a more connected, livable and economically vibrant society.