The Development of AI in Asia | INS Global

The Development of AI in Asia

The Development of AI in Asia

March 5, 2021


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Key Takeaways

  1. New abilities allow AI machines to perform better with certain business functions.
  2. China has aggressively increased R&D spending on AI since 2010 but remains low on many tech lists

In the past few years, the artificial intelligence (AI) industry has grown remarkably and its increasing impact on business and daily life has begun to emerge. In the coming years, the AI industry is set to explode, with additional fields of application, more dedicated R&D, and increased investment. With the importance of the industry being recognized, many Asian countries have mapped out AI strategies coming into 2021. This article discusses the plans, opportunities and ambitions of Singapore, South Korea, Japan, China and Taiwan in the field of AI.


What is AI and What Can it Do?


According to IBM, the term AI refers to a human-like intelligence displayed by a machine, computer or robot. AI generally displays abilities which mimic the human mind, including sensing and recognizing objects, language processing, problem solving and fast learning. These abilities allow AI machines to perform better, certain functions which a human may perform, such as driving a car, having a simple conversation, solving complex medical data and reducing errors in data analysis. This allows for people, businesses, and society to achieve much more, at a faster rate.


Why is AI important?


The overall importance of AI has been simplified into 1 sentence; ‘it can make the world a better place’. These machines have the ability to speed up tasks and work with a high level of precision, reducing the margin for error and allowing us to work more efficiently in all areas of our lives. Whether it be in daily life, medicine, finance or transportation, AI can have a significant impact on these areas.

We see examples in everyday life, like with the use of digital assistants such as Amazon’s ‘Alexa’ or Apple’s ‘Siri’. Through the use of AI, these devices allow you to perform different tasks like scheduling appointments and tasks, set alarms and timers, and search the web. In the healthcare industry we find that diseases are diagnosed faster and more accurately, with drug research and discovery also being sped up and streamlined. The application of scope and implications are endless, and span across a multitude of industries.




Asia is home to almost 60% of the world’s population, and as such there are major potential scale returns for early investment in AI. Governments in the region already spend a lot on R&D with China leading the annual government spending on R&D in the world with a whopping $59 billion, Japan spending $14 billion and South Korea $8.2 billion according to data from UNESCO. Each of these countries have formulated comprehensive plans to integrate AI into their societies in the long term.


Singapore and AI


Singapore was ranked first in the Government AI Readiness Index by Oxford insights in 2019, however in 2020 went down to number 5. Despite the decline in global ranking, Singapore still remains the leading nation in Asia and one of the world’s leaders in the field of AI. The government of Singapore set out its national AI strategy in 2019, the ‘Smart Nation’ movement, which outlines the key sectors where AI could be deployed. These key sectors include chronic disease management and prediction, adaptive learning, and intelligent transportation planning.

Despite having strong governmental backing, Singapore has not been able to keep up with countries like the United States in the area of technology. This is likely to change, as the government of Singapore is implementing a number of initiatives and policies to support the development of the technology sector. In addition, the Punggol Digital District is an initiative which has been implemented to bring together a business park and the Singapore institute of Technology. This park is set to open in 2023 and has been implemented in an effort to stimulate innovation.




Even though its R&D spending has been less than some of the other leading nations, Singapore’s key strategy on AI outlines the important targets it aims to achieve, as well how it aims to do so. The strategy provides for further capital investments for startups, investments for laborers to improve their skills, a thorough regulatory framework which will oversee data protection and a board to ensure that AI practices are carried out ethically.

The government has outlined 5 key areas: education, healthcare, housing, logistics and security, in which it will train approximately 25,000 professionals in artificial intelligence basics (Forbes).


Japan and AI


Together with Singapore and South Korea, Japan falls within the top 15 on the global AI readiness index. In 2017 Japan announced its Artificial intelligence Technology Strategy. Japan’s government acknowledged that they are currently behind both the United States and China in terms of R&D spending, however Japan remains the 2nd highest R&D spender in terms of percentage of the GDP, currently at 3.4% of its GDP according to UNESCO statistics.

While Japan has done well in the early stages of their AI endeavors, their strategy did outline that there is shortage of AI technology researchers, engineers, and data scientists, to ensure they are able to fulfill their AI ambitions. As such, additional development would be required and the importation of foreign AI personnel may be necessary.

Japan has developed in other areas of AI, understanding the limitations of high-performance computers and semi-conductors, and in reply developing new semiconductors that are made specifically for AI applications. As a global communications leader over the past few decades, Japan has also realized the importance of combining these AI efforts with other technology, such as 5G, in order to ensure large amounts of information can be transmitted over wide areas, securely.

Like Singapore, Japan plans to adapt their AI principles into an AI governance. This is to ensure that AI is being used to the benefit of society. The government is also supporting a wide range of reforms that use AI to solve social issues and work towards economic growth (Harvard Business Review).


South Korea and AI


South Korea ranked number 7 on the overall index in 2020 and number 2 in East Asia. Similarly, to Singapore, South Korea launched its national AI strategy in 2019 which focuses on the development of AI and 5G initiatives. With the rapid ageing of their population, they have drawn particular focus to developing AI in the area of healthcare.

In the field of data and infrastructure, South Korea remains the leader in Asia. With a large number smartphones and high internet penetration amongst a relatively small divide of digital users. it was also the first nation with widespread

South Korea has a well-developed technology sector, with specific expertise in the development of semi-conductors, electronics and industrial robotics technology. In recent times many enterprises have invested in attracting global talent, which could potentially boost the AI ecosystem in the future.

In terms of R&D, South Korea is the world’s leader in terms of R&D spending as a proportion of GDP, which indicates their commitment to developing their technology sector. Further indication can be seen in their AI R&D strategy which committed funding towards the creation of 6 AI graduate programs and 5 AI research institutes.


China and AI


Globally recognized as a potential to be one of the world’s most powerful nations in AI, China has aggressively increased R&D spending from 2010, yet due to challenges in quantifying their AI, they still remain relatively low on the oxford insights index. One of the reasons for its position in the ranks is the AI strategy that was rolled out in 2017, known as the Next Generation AI Development Plan. According to this plan China aims to be the world’s leading AI hub, however it has been under intense criticism for a number of reasons.

Among the major concerns are that the Chinese government may not have the effective policy levers to support AI, that some of the other leading countries may have; security concerns (especially regarding mass surveillance and other loose privacy laws); and human capital and expertise in AI.

China has responded pragmatically, finding ways to overcome the challenges and criticisms. For instance, even though there are some limitations imposed by the central government, local governments like Nanjing and Shanghai have developed and are implementing their own AI plans to work around some of the limitations, with other regional cities following suite.

China also has a thriving technology sector with tech giants Alibaba, Baidu and Tencent being championed to lead the way in AI. The second highest number of technology unicorns can also be found in China with the emergence of ByteDance, SenseTime and Ant Group. With more start-ups and initiatives continuing to emerge, China is now in a race with the United to be the world’s technology superpower.


Taiwan and AI


According to Grand View Research, the area of AI is poised to grow into a more than $390 billion industry by the year 2025. As such, the government of Taiwan has now indicated several times that they intend to turn Taiwan into an AI research and development hub.

Despite many countries experiencing a sharp economic downturn in 2020, Taiwan managed to be the fastest growing economy in Asia, with 3.11% growth in 2020. This was due to resilient containment of COVID-19 and strong incentives by the government to encourage investment. Taiwan’s exports grew by almost 5%, with semi-conductors accounting for almost half of its total exports. With the positive growth experienced in 2020, Taiwan’s goods exports are forecasted to almost double to 9.5% according to Taiwan’s statistics bureau.

Taiwan has also received interest from some of the world’s leading tech companies. Large tech companies like IBM, Google and Microsoft have all showed interest in developing AI R&D facilities on the island. The government of Taiwan has also set their intentions on developing a ‘Giant AI-Focused Business Park’ (Forbes).


New AI-Based Infrastructure


The new AI park is set to be around 126,000 square meters near 2 top universities in Taipei and an all-purpose high-tech zone. The park will have an appointed space for AI product service demos to take place, as well as attract other companies to be part of the eco-system. The Taiwan government hopes that by having the capital, specific types of technology, and human capital in a defined area, it will make business more efficient.

Many companies are setting their sights on Taiwan, with the construction of the new park and due to the high caliber of engineering talent who would be more stable and loyal to the company in comparison to their peers in other countries. Taiwan has further indicated that it will train 10,000 workers each year to meet the demand for talent (Forbes). Even though there are other great destinations to setup or invest in Asia, these major tech companies like the ones mentioned above are choosing Taiwan as their destination of choice.


The Asia Collaboration


Even though each country mentioned above wants to establish a strong early presence in an industry that will inevitably experience rapid growth, each of these countries will also work in collaboration with one another now that the Regional Comprehensive Economic Partnership trade agreement has been established. We have seen previous co-operation between countries in the region before with, for instance, the investment from companies in China, Japan, South Korea and Singapore, in the Singaporean founded app Grab.


Opportunity in AI in Asia


The AI industry is still in its early stages; however, it is well understood that the country or territory that establishes an early stronghold in the field, will have a lot of power and control. As such, many countries are competing by and large to gain a competitive advantage.  With more and more unicorns coming out of Asia, we see that despite being the front runner now, the United States and many European nations may yet fall behind to the efficient Asian nations.

What we can assess from the way things currently stand is that these leading Asian nations are gearing up and preparing for the world of tomorrow. With ample resources, strategic ambitions, and practical application, they are moving towards establishing an even stronger presence in AI. The increased investment and number of AI professionals allows us to foresee greater R&D and talent in the region. The added benefit of the co-operation between the nations is encouraging for investors who are considering investing in the region.


AI in Asia


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