AI usage growing but governance still lacking - Datacom

Datacom’s latest State of AI Index: AI Attitudes report highlights a concerning gap in governance and regulatory frameworks as more Kiwi businesses deploy artificial intelligence.

The survey of 200 senior managers across a wide range of New Zealand businesses undertaken by Curia Research, indicates that while AI usage has jumped to two-thirds of companies, up from 48% in 2023, the necessary guardrails for its responsible implementation remain largely absent.

Positive sentiment towards AI is increasing

Growing appetite for AI

This rapid adoption is accompanied by a positive shift in attitudes, as 70% of respondents express excitement and support for AI, compared to just 47% last year. The optimism is driven by the belief that AI can offer economic advantages and new revenue opportunities, with 71% of respondents agreeing on its potential for economic impact.

That growing appetite is driven by the potential for economic return and productivity improvements. A microsoft-commissioned report released last week by IT consulting firm Accenture, estimated that generative AI alone is expected to add $76 billion per year to New Zealand’s economy by 2038 – growing GDP 1% each year.

Accenture suggested that New Zealand had a competitive advantage in AI as it was viewed as a responsible global citizen “a perception that was reinforced by its carebased public health response to the COVID-19 pandemic”, Accenture argues.

“This positions it to provide global thought leadership on key issues like AI regulation, AI-related intellectual property, and responsible use of AI.

New Zealand, Accenture continued, is an “ideal global test-bed for emerging Generative AI use-cases due to its high digital penetration, diversified economy, skilled workforce, and small size, which allows for cost effective testing of new products at a national scale”.

But to be a beacon of best practice when it comes to responsible use of AI, we’ve some work to do getting the basics right on governance and oversight.

Where’s the governance?

Despite the enthusiasm identified by Datacom, the 2024 AI Index underscores a critical shortfall in AI governance. Only 13% of businesses using AI have established audit assurance and governance frameworks.

Just 48% have implemented staff policies for AI usage, and 33% provide awareness training for their employees. This lack of structured governance raises concerns about the safe and

responsible use of AI technologies.

"There is huge potential for AI to transform the way we work, but we need the guardrails in place to ensure we're using AI safely and responsibly," says Justin Gray, Managing Director of Datacom New Zealand.

He suggests that these frameworks should not be overly restrictive but must provide clarity on managing AI risks and the acceptable use of AI and data.

Challenges in data management

The report also highlights issues related to data management, a crucial component in leveraging AI effectively. Datacom's earlier research revealed that 30% of New Zealand companies struggle with 'dirty data,' which includes duplicates, outdated, or inaccurate information.

The quality of AI outputs is directly tied to the quality of data inputs, making effective data management essential for successful AI implementation.

Barriers to AI expertise

Another significant barrier to AI adoption is the lack of specialised expertise. Only 39% of organizations using AI have dedicated resources to manage it. For those not yet utilising AI, 43% cite the unavailability of AI expertise as the primary reason for their hesitation, followed by a lack of use cases and waiting for technology to mature.

Despite these challenges, the demand for AI expertise is not yet a significant factor in hiring decisions, with only 16% of respondents indicating a preference for candidates with AI experience. This gap in expertise underscores the need for businesses to invest in training and development to build internal capabilities.

The findings suggest that AI should not be viewed as an add-on but as an integral part of business strategy. Organisations need to set clear targets for AI to ensure their investments yield tangible benefits. Gray advises, "It is critical that AI is not seen as an 'add-on' but is built into overall business strategy."