AI Adoption Zooms - Pros Look for Government Regs
March 15, 2021
COVID-19 pandemic has accelerated the pace of artificial intelligence (AI)
adoption, but many say it's moving too fast, according to a new KPMG survey.
Despite concerns about the speed of adoption, business leaders are confident AI
can help solve some of today's toughest challenges, including COVID-19 tracking
In the new study, Thriving in an AI World, high numbers of business leaders from
the following industries say AI is at least moderately functional in their
organizations, including those in: industrial manufacturing (93 percent),
financial services (84 percent), tech (83 percent), retail (81 percent); life
sciences (77 percent), healthcare (67 percent) and government (61 percent). In
addition, several industries saw a significant increase from last year's report:
financial services (37-percentage point increase), retail sector (29-percentage
point increase) and tech sector (20-percentage point increase).
According to Traci Gusher, Principal of Artificial Intelligence, "Leaders are
experiencing COVID-19 whiplash, with AI adoption skyrocketing as a result of the
pandemic. But many say it's moving too fast. That's probably because of current
debate surrounding the ethics, governance and regulation of AI. Many business
leaders do not have a view into what their organizations are doing to control
and govern AI and may fear risks are developing."
Wayne Eckerson, President of the Eckerson Group added,
"We've heard for a while that the adoption of AI technology has been too slow,
so it's ironic now that people think it's moving too fast. But that's
understandable because it's a powerful technology that can easily go off the
rails without proper governance and oversight. Companies need to invest as much
in people and processes as in AI technology to get the full benefits and
minimize risks. Data drifts, markets change, and models may run afoul of
ethical, if not legal, standards."
Specifically, half of business leaders in industrial manufacturing (55 percent),
retail and tech (49 percent in each) say AI is moving faster than it should in
their industry. Concerns about the speed of AI adoption are particularly
pronounced among small companies (63 percent), business leaders with high AI
knowledge (51 percent), and Gen Z and Millennial business leaders (51 percent).
Leaders confident in AI solving industry problems, including COVID-19
Business leaders from both small (88 percent) and large (80 percent) companies
say AI technology helped their company during the COVID-19 outbreak. As we
continue to navigate the pandemic, life sciences and healthcare business leaders
are overwhelmingly confident in AI's ability to monitor the spread of COVID-19
cases (94 percent and 91 percent), help with vaccine development (90 percent and
94 percent) and distribution (90 percent and 88 percent), respectively.
Beyond the pandemic, business leaders are confident in AI's ability to solve
major industry problems. Specifically, these include:
Financial services business leaders surveyed are confident in AI's ability to
detect fraud (93 percent), higher than last year's report (85 percent).
And government decision-makers surveyed are confident in AI's ability to improve
bureaucratic efficiency (79 percent).
Business leaders optimistic about new administration, want more regulation
leaders across industries believe the Biden administration will do more to help
advance the adoption of AI in the enterprise: industrial manufacturing (90
percent), tech (88 percent), retail (85 percent), financial services (82
percent), life sciences (81 percent), government (79 percent) and healthcare (73
Additionally, younger (Gen Z and Millennial) business leaders are more likely
(90 percent) than older (Gen X and Baby Boomer) business leaders (79 percent) to
be more optimistic about the potential actions the Biden administration will do
to help advance the adoption of AI in enterprise.
Even with the optimism, business leaders are conscious that controls are needed
and overwhelmingly believe the government has a role to play in regulating AI
technology: industrial manufacturing (94 percent), retail (87 percent),
financial services (86 percent), life sciences (86 percent), tech (86 percent),
healthcare (84 percent) and government (82 percent). Business leaders with high
AI knowledge (92 percent) are more likely to say the government should be
involved in regulating AI technology in comparison to total business leaders (87
Compared to last year's report, business leaders are more interested in
government involvement, with financial services increasing by 27-percentage
points, retail increasing by 24-percentage points, and tech increasing by
"We are seeing very high levels of support this year across all industries for
more AI regulation. One reason for this may be that, as the technology advances
very quickly, insiders want to avoid AI becoming the 'Wild Wild West.'
Additionally, a more robust regulatory environment may help facilitate commerce.
It can help remove unintended barriers that may be the result of other laws or
regulations, or due to lack of maturity of legal and technical standards," said
Rob Dwyer, Principal, Advisory, specializing in technology in Government.
The KPMG study, Thriving in an AI World, is an evolution of a study KPMG
originally released in early 2020. The findings are based on feedback from a
range of 950 full-time business decision makers and/or IT decision makers* with
at least a moderate amount of AI knowledge and at companies with over $1 billion
in revenue**, across seven industries (150 respondents+ per industry):
technology, financial services, industrial manufacturing, healthcare, life
sciences, retail, and government. The online survey was fielded between January
3rd, 2021 and January 16th, 2021. The margin of error (MOE) for the total sample
at the 95 percent confidence level is +/- 3.2 percentage points.