Australia ranks fourth globally in GenAI usage and maturity, following China, UK and USA: SAS research

Generative AI is here to stay. Organisations around the world are enthusiastically using and investing in the technology. But which regions and countries are leading in the use of GenAI technology, according to Artificial Intelligence (AI) and data analytics business decision makers? Australia (63%) ranks fourth out of 16 countries, according to a recent global study SAS commissioned with Coleman Parkes Research Ltd, following China (83%), the UK (70%) and the US (65%).

Organisations in the US are ahead in terms of maturity and having fully implemented GenAI technologies at 24% compared to China’s 19%, the UK’s 11%, while Australia ranks fourth again at 8%. Note that an impressive 55% of Australian organisations are using GenAI but haven’t fully implemented it, which exceeds the global average of 43%.

What does this mean in terms of the global economic impact of AI and GenAI? In a 2023 report, McKinsey estimated GenAI could add the equivalent of $2.6 trillion to $4.4 trillion annually across a variety of use cases. This impact would increase the overall influence of artificial intelligence by 15% to 40%.

Considering these economic implications, SAS and Coleman Parkes targeted 1,600 decision makers across key global markets. Respondents work in a range of industries including banking, insurance, the public sector, life sciences, health care, telecommunications, manufacturing, retail, energy and utilities, and professional services. The smallest organisations surveyed employed a workforce of 500 – 999 people, and the largest employed more than 10,000.

“While China may lead in GenAI adoption rates, higher adoption doesn’t necessarily equate to effective implementation or better returns,” said Stephen Saw, Managing Director at Coleman Parkes. “In fact, the US nudges ahead in the race with 24% of organisations having fully implemented GenAI compared to 19% in China.”

Global regions charge ahead with GenAI

Highlights from the global survey results include indicators that signal different regions are on board and starting to adopt GenAI in meaningful ways but at different rates.

“With any new technology, organisations must navigate a discovery phase, separating hype from reality, to understand the complexity of real-world implementations in the enterprise. We have reached this moment with Generative AI,” said Bryan Harris, Executive Vice President and CTO at SAS. “As we exit the hype cycle, it is now about purposefully implementing and delivering repeatable and trusted business results from GenAI.”

Where do regions rank in fully using and implementing generative AI into their organisation’s processes?

• North America: 20% (Australia – 8%)
• APAC: 10%
• LATAM: 8%
• Northern Europe: 7%
• South West and Eastern Europe: 7%

Which regions have implemented GenAI use policies?

• APAC: 71% (Australia – 72%)
• North America: 63%
• South West and Eastern Europe: 60%
• Northern Europe: 58%
• LATAM: 52%

To what extent do those planning to invest in GenAI in the next financial year have a dedicated budget?

• APAC: 94% (Australia – 94%)
• Northern Europe: 91%
• South West and Eastern Europe: 91%
• North America: 89%
• LATAM: 84%

Note: North America comprise the United States and Canada; LATAM includes Brazil and Mexico; Northern Europe includes United Kingdom/Ireland, Sweden, Norway, Finland, Denmark; South West and Eastern Europe is France, Germany, Italy, Benelux, Spain and Poland; and APAC encompasses Australia, China, Japan and the United Arab Emirates/Saudi Arabia.

Gen AI understanding and planning is strong in Australia compared to global averages

The vast majority (87%) of Australian respondents reported either understanding well or having a moderate personal understanding of GenAI (compared to 82% globally), suggesting a high level of engagement about the potential use cases of the technology within Australia.

Craig Jennings, Vice President and Managing Director ANZ, SAS, said, “Australia is punching above its weight globally when it comes to maturity in understanding and adoption of GenAI technologies. We are working with businesses across various vertical industries, spanning financial services, life sciences, retail, and more, to take them on their AI and GenAI journeys. These partnerships are driving greater employee satisfaction and improved operational efficiencies while freeing up resources for enhanced innovation and customer experiences.”

Decision makers in Australia recognise that GenAI can drive innovation, new conversational experiences and operational efficiency. The research showed that Australian organisations are reaping solid benefits from their GenAI usage, for instance:

• 91% reported improved employee experience and satisfaction (compared to 89% globally)
• 85% say that they are making savings on operational costs (compared to 82% globally)
• 89% state that customer retention is higher (compared to 82% globally).

In Australia, the leading concerns about using Gen AI include data security (72%), data privacy (64%), ethical implications (64%) and over-reliance/dependence (59%). However, Australia seems to be on the front foot for implementing regulations that will assist in alleviating such concerns. Almost three quarters (73%) of respondents said they are either fully or moderately prepared for GenAI regulations.

Australian decision makers said the biggest challenges in implementing effective governance and monitoring for GenAI were technological limitations (32%), lack of transparency and accountability (28%) and a lack of clear guidelines or standards (21%).

Industries and functional divisions globally embrace GenAI at varying rates

When split into industry segments, the data shows banking and insurance leading other industries in terms of incorporating GenAI into daily business operations across a variety of metrics. Highlights from those findings are below.

How do specific industries rank in terms of fully implementing GenAI and fully implementing it into regular business processes?

• Banking: 17%
• Telco: 15%
• Insurance: 11%
• Life sciences: 11%
• Professional services: 11%
• Retail: 10%
• Public sector: 9%
• Health care: 9%
• Manufacturing: 7%
• Energy and utilities: 6%

Which industries indicate they already use GenAI daily to some extent?

• Telco: 29%
• Retail: 27%
• Banking: 23%
• Professional services: 23%
• Insurance: 22%
• Life sciences: 19%
• Health care: 17%
• Energy and utilities: 17%
• Manufacturing: 16%
• Public sector: 13%

Which departments inside organisations are using or planning to use GenAI?  

• Sales: 86% (In Australia, Sales ranked first at 90%)
• Marketing: 85% (In Australia, Marketing ranked second at 83%)
• IT: 81% (In Australia, IT ranked third at 86%)
• Production: 75% (In Australia, R&D ranked fourth at 81%)
• Finance: 75% (In Australia, Customer/Field Service ranked fifth at 79%)

Early adopters globally are finding plenty of obstacles in using and implementing GenAI

No. 1 on the list of challenges organisations globally face in putting GenAI to routine use is the lack of a clear GenAI strategy.

Only 9% of leaders responding to the survey indicate they are extremely familiar with their organisation’s adoption of GenAI. Of respondents whose organisations that have fully implemented GenAI, only 25% say they are extremely familiar with their organisation’s GenAI adoption strategy. Even those decision makers responsible for technology investment decisions aren’t familiar with AI – including those at organisations that are ahead of the adoption curve.

Nine out of 10 senior technology decision makers overall admit they don’t fully understand GenAI and its potential to affect business processes. At 45%, CIOs lead the way with executives who understand their organisation’s AI adoption strategy. But only 36% of Chief Technology Officers (CTOs) say they’re fully in the know.

Yet despite this understanding gap, most organisations (75%) say they have set aside budgets to invest in GenAI in the next financial year.

Other challenges organisations face include:

• Data: As organisations adopt GenAI, they realise they have insufficient data to fine tune large language models (LLMs). They also realise – once they’re deep into deployment – they lack the appropriate tools to successfully implement AI. Organisations’ IT leaders are mostly concerned about data privacy (76%) and data security (75%).
• Regulation: Only a tenth of organisations say they are fully prepared to comply with coming AI regulations. One third of organisations that have fully implemented believe they can comply with regulations. Only 7% are providing a high level of training on GenAI governance. And only 5% have a reliable system in place to measure bias and privacy risks in LLMs.

Although there are obstacles, some early adopters have experienced meaningful benefits already: 89% report improved employee experience and satisfaction; 82% say they’re saving operational costs; and 82% state customer retention is higher.