By Beatriz Marie D. Cruz, Reporter
SOME Philippine companies are not ready to adopt artificial intelligence (AI) due to insufficient data and infrastructure needed to unlock the value of their investments, according to global consulting company Kearney.
“The one thing that I have noticed, and it’s true for companies here in the Philippines and also around the region, is that many companies are not quite ready to adopt and to monetize AI,” Marco de la Rosa, senior partner and Philippines country head at Kearney, told BusinessWorld in a recent interview.
“The challenge that we often find in these types of technology is that everybody wants it, but not many are able to get the value out of it,” he said.
When investing in AI, companies must have the proper foundations to ensure that they are able to generate value, Mr. De la Rosa said, citing the need to identify use cases.
“I’m not saying it’s impossible, what I’m saying is that it will require very significant and focused investment. I would even suggest to maybe not think about AI investments as industry wide. But within AI, are there specific use cases or capabilities that we want to focus on?” Mr. De la Rosa said.
“Because when you’re playing from behind, we cannot spread our investments across a very wide base and hope to catch up,” he added.
Having good data is one of the key foundations in AI adoption, he noted.
“AI only survives with good data, and the challenge that we see companies over and over again struggle with is they’re either not collecting all the right data, or they have too many different sources of data, or that the data isn’t very clean.”
Companies must also invest in sufficient infrastructure and training to better harness their data into AI.
“Very often people will build massive stacks of capability and technology, but then their people aren’t enabled to use that data and know how to create the value out of that data,” Mr. De la Rosa added.
The Philippines dropped three spots to 12th out of 78 countries in Kearney’s 2023 Global Services Location Index, which measures a country’s attractiveness as an offshore location for business services.
Mr. De la Rosa noted that the Philippines was in the top 10 previously but was edged out by Mexico in 2023 when the index began measuring countries’ digital capabilities.
“When you start looking at IT (information technology), AI, and all of those types of capabilities, the Philippines’ competitiveness drops,” he said. “Obviously, we’re still strong in traditional areas like voice, but in areas like IT and others, we lag.”
The Kearney executive also cited the need for Philippine investments focused on boosting the quality and volume of Science, Technology, Engineering and Mathematics graduates.
The Philippine government must also strengthen collaborations with AI experts to adopt strategies on harnessing AI effectively, said Shigeru Sekinada, Kearney senior partner and region chair, Asia-Pacific and managing director, Japan.
As an example, Mr. Sekinada noted that the Japanese government appointed Yutaka Matsuo, a professor at the University of Tokyo School of Engineering, to head Japan’s AI Strategy Council.
Mr. Matsuo’s expertise has helped in crafting the Japanese government’s AI policies and strategies, he noted.
“Maybe a similar action is necessary for the other countries including the Philippines,” Mr. Sekinada told BusinessWorld, adding the government needs to provide guidelines for AI development.
While AI technology can be a double-edged sword, it can be beneficial if companies put in the right investments.
“The fact is that we can’t stand still. We can’t just turn a blind eye and say ‘AI won’t impact us.’ I think it’s about how you harness it for good and allow the industry to remain competitive,” Mr. De la Rosa also said.
“In the past, ‘digital native’ was the keyword. But now, the ‘AI native’ will be the new keyword,” Mr. Sekinada said.
AI technologies can potentially boost the Philippine economy by P1.8 trillion, resulting in a gross value-added increase of 7%, according to a report by Google and consulting firm Public First.
