Two years ago, I shared with Hong Kong Business readers how we will be able to build smarter retail infrastructure through in-store artificial intelligence (AI). I am pleased to see that AI-based chatbots are now in widespread use around the world. However, the incredible potential of AI remains largely unrealised in Hong Kong, whilst the number of opportunities has expanded immensely.
Over the past few years, the use of AI in business has become a hot topic around the world. Just look at the astonishing strides made in human-to-computer communication with digital assistants like Siri and Cortana, or even Google Duplex, the latest AI natural conversation interface.
With rapidly-improving technology, increasing adoption rates and greater acceptance, AI in the form of chatbots, deep neural networks and data analytics has been creating real benefits for businesses and consumers in markets everywhere, particularly in mainland China.
President Xi Jinping has committed to making China a global leader in artificial intelligence by 2030, aiming to create an industry that will be worth a staggering one trillion dollars. The country is steaming ahead with this plan: the Chinese government, universities and research institutes and industry titans like Baidu, Alibaba, Tencent and iFlyTek are working together to move AI technology forwards.
Alibaba is one of China’s primary investors in AI. The company recently announced plans to invest more than USD 15 billion in research labs over the next three years, focusing on AI, machine learning, natural language processing and more. Alibaba’s AI-powered chatbot, Dian Xiaomi handles over 3.5 million requests per day and is capable of understanding the vast majority of customer enquiries.
In contrast to what is happening just across the border, Hong Kong’s adoption of AI is still in its infancy. According to some, we are still “stuck in the dark ages”: overall investment in AI has been low, with development projects funded only by the government and a few major corporates. Out-dated regulations are slowing down access to data and preventing data from being shared across platforms, whilst general enthusiasm is lacking, with public suspicions about privacy and job losses running high.
But the ship is beginning to turn. In her inaugural policy address earlier this year, Hong Kong Chief Executive Carrie Lam made it clear that innovation and technology are top priorities for this administration. Growing investment in innovation incubators like Cyberport and Hong Kong Science Park – which alone will receive HKD10 billion in government funds – will attract talent and improve our ability to develop commercially-viable AI offerings.
An invigorated attitude is also necessary, as the number of science, technology, engineering and mathematics (STEM) students in Hong Kong’s universities needs boosting – a new generation of tech-savvy young people is required to secure a pipeline of talent as the AI field grows. Improving ties with the mainland will also expand the overall AI ecosystem in Hong Kong, giving start-ups and other businesses access to more funding and better partnerships with larger markets.
These investments will take time to bear fruit, meaning that substantial, Hong Kong-specific AI applications for retail, manufacturing, logistics, customer service and beyond likely not be up and running for several years. During this phase, applications that will deliver direct, measurable ROI will be prioritised, especially in the retail industry where margins are already tight.
So as a business in Hong Kong, how can you participate in the development of AI? Carefully watch what the big industry players are doing, both at home and overseas. Pay attention to their successes and failures – particularly in terms of which AI applications actually drive profitability for the company, as opposed to marketing-driven projects designed to raise a brand’s profile.
I am confident that in the near term AI will not only lift profitability and drive growth in Hong Kong’s business sector – it will also lead to enormous advances in the economy and in the day-to-day lives of everyone. We just need to put our suspicions to the side and welcome the future with open arms.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.
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Lawrence Chia is the Chairman and CEO of the Hong Kong-listed Pico Far East Holdings (Pico Group) (SEHK: 752).