AI applications are expanding in the manufacturing industry. Valued at $2.58 billion in 2022, it is expected to reach $64.63 billion by 2031.

The convergence of AI and the Industrial Internet of Things (IIoT) in 2019 marked a turning point, ushering in a new era of intelligent manufacturing. The vast potential of industrial processes, coupled with the ever-growing availability of manufacturing data, has created a prime opportunity for AI adoption – a true “blue ocean” market.

This global transformation empowers manufacturers to use the power of AI for significant advantages. As a leading manufacturing hub, Asia is particularly well-positioned to capitalise on these industrial AI applications. Here’s all you need to know about the current state, future prospects and potential benefits of AI projects, while identifying key industry trends that are shaping the future.

Shifting Tech Trends In Asia

For decades, technological advancements were driven by five key areas: electronics, semiconductors, business services, telecommunications, and consumer products. However, as the “Internet + Consumer” era matures, a new trend is emerging – the “smart enterprise.” This future-focused trend empowers companies to use digital technology and develop custom solutions for their unique needs.

Manufacturing generates over 1,812 petabytes of data annually – more than any other industry except communications. This data surge overwhelms traditional decision-making processes. Manufacturers are turning to smart technology to unlock hidden data patterns and solve previously unforeseen challenges.

AI is a beacon of hope for the industry. Over 93% of manufacturing companies believe AI is critical for future growth and innovation. China is leading the charge, with an AI manufacturing market projected to surpass $2 billion by 2025, driven by supportive policies, abundant funding, and a strong foundation for AI integration.

AI Applications in Manufacturing

AI offers a vast toolbox for manufacturers and impacts areas such as production, product development, business operations, and supply chain management. Currently, “smart production” dominates AI implementation. However, this trend is expected to shift within the next two years.

The future of AI in manufacturing points towards a focus on products, services and supply chain management. Advancements in computer vision will propel AI into quality monitoring and defect management, becoming a key player alongside existing smart production applications.

While AI integration in product design, customisation, and marketing is still nascent, there's a surge in planned investments in these areas. Manufacturers are looking to use the power of AI to shorten design cycles, personalise customer experiences, and optimise marketing efforts.

The Expectation Gap: Why AI Projects Fall Short in Manufacturing

Despite strong AI adoption in China, our survey reveals a significant gap between expectations and reality. A concerning 91% of AI projects implemented by Chinese manufacturers failed to deliver the anticipated benefits or fell behind schedule.

This disconnect stems from several key challenges:

Legacy Systems and Structures: Existing manufacturing processes and organisational structures may not be adaptable to integrate AI effectively.
Infrastructure Constraints: Insufficient computing power, storage capacity, or network bandwidth can hinder AI performance.
Data Issues: Poor data quality, limited data volume, or challenges in collecting and preparing data can cripple AI models.
Talent Shortage: A lack of skilled engineers with expertise in AI development and implementation can hinder project success.
Overambition: Starting with overly complex or large-scale AI projects can overwhelm resources and lead to setbacks.

The Future Impact of AI in Manufacturing

Nearly 83% of companies believe AI has the potential to make a practical and visible impact on their businesses. This belief is translating into action, with 27% already experiencing value from AI projects and 56% expecting benefits within the next 2-5 years.

Looking ahead, companies are showing a strong preference for versatile AI systems. These systems can handle a wider range of tasks, such as production optimisation, predictive maintenance, or even sales forecasting. This shift in focus indicates a move away from limited-purpose solutions like surveillance systems or robot positioning, which offer less overall value.

The Rise of AI in Asia: Opportunities and Challenges

Asia has become a hotbed of AI innovation, with China, Japan, and South Korea leading the charge in research, development, and implementation. AI integration across various industries, from manufacturing and healthcare to finance and customer service, promises significant efficiency, accuracy, and productivity gains.

While cost reduction and enhanced competitiveness are clear advantages, concerns linger around job displacement.

The Double-Edged Sword of AI

The increasing use of AI technologies has instilled a sense of uncertainty among Asian workers. Many fear their roles will be replaced by intelligent machines, particularly in repetitive jobs like assembly lines or customer support. This anxiety is amplified by the rapid pace of AI adoption, creating a skills gap and the fear of becoming obsolete.

Several factors worsen layoff anxiety in the face of AI:

Media Focus: Media often portrays AI as a job-stealing force, overshadowing its potential to create new opportunities and complement human skills.
Communication Gap: Lack of transparency from employers about AI implementation strategies can fuel speculation and fear. Companies must proactively engage with employees, explaining how AI will be integrated and reassuring them of their continued value.
Skills Gap: The absence of comprehensive retraining and reskilling programs leaves workers feeling unprepared for the AI era. Collaboration between governments, businesses, and educational institutions is crucial to establish robust upskilling programs and facilitate career transitions.

Bridging the Gap: Solutions for a Smooth Transition

The concerns surrounding AI are prompting governments across Asia to develop proactive strategies. Here are some examples:

Japan’s Society 5.0 Initiative

This 2016 initiative prioritises a human-centred approach, focusing on AI as a tool to empower people. Japan invests in training and support programs to help individuals adapt to the changing technological landscape (for example, JPY26 billion invested in Society 5.0 projects).

China’s National New Generation Artificial Intelligence Development Plan

China’s plan tackles both AI advancement and workforce transformation. It emphasises the need for new job creation alongside AI adoption and heavily invests in AI education and training (for example, plans to establish 100+ AI platforms and train 5 million AI professionals by 2030).

India’s National AI Strategy

Recognising the potential impact on its workforce, India’s 2018 strategy emphasises inclusive development alongside AI integration. It focuses on building AI capabilities, research and development, and establishing a robust AI ecosystem.

These initiatives highlight promising approaches, but further discussion is needed on:

Lifelong learning: How can educational systems and workplaces be structured to promote continuous skills development?
Fostering a culture of adaptability: What strategies can encourage adaptability and a willingness to embrace new skills in the workforce?
Worker participation in AI discussions: How can workers be actively involved in discussions about AI implementation to alleviate anxieties and ensure a smooth transition?

By addressing these questions, governments, businesses, and educational institutions can equip the workforce with the skills needed to thrive in the AI era.

Top 10 Asia-Pacific Trends To Look Out For In 2024

The Asia-Pacific region has entered the golden era of the digital economy. In 2022, the GDP growth rate in many Asian countries was over 5%. Thanks to its population advantage, the rise of the younger generation has brought new potential to its emerging economies. By 2030, ASEAN is expected to become the world’s fourth-largest economy and the regional internet economy market should reach $1 trillion.

Nearly all Asia-Pacific countries are taking proactive steps to drive a national digital masterplan. Indonesia, for example, pays special attention to new infrastructure in its Vision 2045. The Smart Bangladesh Blueprint and the Korean Digital New Deal have shown a strong investment commitment to digital government. And, Thailand has released its thirteenth Five-Year plan to increase the proportion of its digital economy in GDP from 12% to 30% by 2027.

AI in the manufacturing market is on a staggering growth trajectory, projected to reach $84.5 billion by 2031. Several key factors are driving this transformation:

Industry 4.0 & Smart Factories

Industry 4.0, marked by the convergence of AI, the Internet of Things (IoT), and cloud computing, is creating a new era of intelligent manufacturing. Smart factories use machines to monitor production in real-time, optimise processes, and minimise costs. AI plays a critical role by analysing the vast amount of data generated by these devices, identifying patterns, predicting equipment failures, and ultimately streamlining production for significant efficiency gains.

Predictive Maintenance & Quality Control

With the power of AI, manufacturers can catch mistakes before they happen. Predictive maintenance systems analyse sensor data, prevent costly downtime and maximise asset uptime. Special sensors on the machines collect information, and AI helps understand that information. This lets factories know when a machine might be about to break down, so they can fix it beforehand. This helps meet high-quality standards, reduce waste, and boost profits.

Global Competitiveness

The manufacturing sector in developing economies is experiencing rapid growth. These regions are increasingly recognising the potential of AI to enhance operational efficiency and compete effectively on a global scale. As these industries embrace AI solutions, the market is poised for significant expansion.

Next-Gen AI

Increased computing power is a critical factor in the evolution of AI. The first generation relied on knowledge and algorithms. The second generation added vast amounts of data as a key ingredient. Now, with even more powerful computing resources, we’re entering the era of third-generation AI.

Policy Landscape for Responsible AI

Witnessing the efficiency of ChatGPT and other AI models, Asian governments are accelerating AI deployment. Hong Kong’s $3.8 billion investment in AI development for healthcare, law, and finance boosts this trend. Responsible AI adoption is crucial. Governments are working with stakeholders to establish collaborative frameworks to promote international consensus on AI ethics.

Enhanced Intelligence

The focus in AI development is shifting towards industry-specific intelligence solutions. These large-scale models will be tailored to address specific industry challenges. For instance, the Thailand Meteorological Department’s adoption of the Huawei Pangu-Weather model demonstrates the power of AI in weather forecasting. This model, surpassing traditional methods, delivers 10,000 times faster predictions, reducing prediction time to mere seconds.

Multimodal AI

Imagine an AI system that can not only read text but also understand pictures, listen to sounds, and even analyse emotions in your voice. This is the future of AI with multimodal learning. By 2026, experts predict that 30% of AI models will be built this way. This is a big leap from current AI systems that often rely on just one type of data, like text.

The Big Flip In App Development

Get ready for a revolution in how software is built! The rise of AI-assembled applications is predicted to disrupt the traditional developer landscape. By 2027, a quarter of leading companies (A2000 firms) could be using AI to build their applications. This “big flip” is driven by two key trends: componentisation and advancements in AI/ML.

Building a Skilled Workforce

The rapid advancement of AI also necessitates a skilled workforce. A report by McKinsey predicts a staggering talent gap of 4 million in China’s AI sector by 2030. Building a robust talent ecosystem is critical. Programs like Huawei’s training program in Thailand are trying to train more people with the right tech skills. They aim to train 20,000 cloud developers in three years.

The Green Challenge

The growing demand for computing power presents an environmental challenge. Data centres, crucial for AI development, consume significant energy. For instance, Singapore’s 60+ data centres account for 7% of its power usage. This highlights the importance of green computing initiatives. Traditionally, data centres focused on maximising power per individual server. The new trend is towards a more sustainable approach, featuring:

Computing Power Diversity: Utilising a mix of processing power options to optimise energy use for different tasks.
Efficient Cooling Systems: Implementing innovative cooling solutions to minimise energy consumption for temperature control.
Green Energy Storage: Integrating renewable energy sources and efficient storage solutions to power data centres.

The rapid evolution of AI and automation is fueling a digital transformation unlike anything we’ve seen before.

Businesses are harnessing this power to:

Scale Up: AI automates repetitive tasks, freeing human employees for higher-level work. This allows companies to scale their digital initiatives more efficiently.
Democratise AI: User-friendly, low-code/no-code platforms are making AI accessible to a wider range of businesses, regardless of their technical expertise.
Boost Efficiency: Collaborative automation platforms and multimodal AI are accelerating learning and boosting overall operational efficiency.

Looking ahead to 2027, advancements in AI and ML could lead to a dramatic shift in the manufacturing industry. AI-assembled applications could potentially replace some traditional programming tasks.

For more such in-depth insights, follow Comms8 where we help your brand expand into foreign markets.

At Comms8, we specialise in helping businesses leverage the power of cross-border marketing in Asia. With our expertise, we can assist you in harnessing the influence of marketing strategies to boost your brand’s credibility and awareness. Contact us today to learn more about empowering your brand in the dynamic Asian market.

The Rise Of AI in Asian Manufacturing: Top 10 Trends To Look Out For In 2024