Last updated on August 12th, 2024 at 12:39 pm
Generative AI is riding a wave of promise in Canada, gaining significant momentum among Canadian corporations. According to data from a Capgemini survey released in July 2024, there’s a clear upward trend in the adoption and implementation of generative AI across various industries. Steven Karan, Capgemini’s Vice President, Head of AI Insights + Data, highlighted this shift during a recent phone interview, stating, “Boards are cautiously but enthusiastically increasing their investments and pushing forward. Pilots are delivering results, and many enterprises are expanding pilots and investing further, both Canadian domiciled companies and global enterprises.”
A Data-Driven Shift Toward AI
The Capgemini report provides compelling data supporting this trend. The 2024 update to their now annual AI report shows that generative AI’s potential is no longer just a theoretical concept but is increasingly being realized in practical applications. Last year, a significant 70% of executives believed that generative AI would broaden the scope of knowledge workers’ roles, while nearly all executives (96%) recognized generative AI as a crucial topic in boardrooms. This year, the narrative has shifted from mere recognition to active implementation, with generative AI beginning to reshape business operations in tangible ways.
The 2024 report, titled “Harnessing the Value of Generative AI 2nd Edition: Use Cases Across Sectors,” illustrates the diversity of generative AI applications across the corporate landscape. In 2023, only 6% of surveyed companies were integrating or in the process of integrating generative AI into their operations. Fast forward to 2024, and that number has surged to nearly 25%. This year-over-year growth is remarkable for a technology that is still in its early stages of adoption. “The number one use case in place right now is in IT—coding, extracting value from data centers, and optimizing infrastructure,” said Karan. He also pointed out that customer service and marketing are the next two most common areas where generative AI is being deployed.
Cautious Yet Forward-Thinking Approaches
While the adoption of generative AI is accelerating, Canadian organizations are proceeding with a healthy dose of caution. According to the survey, 80% of Canadian organizations have increased their AI investments, yet there remains a significant need to establish governance and safety mechanisms to ensure responsible implementation. Notably, 66% of Canadian organizations lack confidence that generative AI is fair and inclusive, indicating a critical area that needs attention as the technology continues to evolve. “We’re really at the very beginning of realizing the potential,” Karan remarked. Early indicators of customer satisfaction and employee engagement are promising, with 4% of customers and 5% of employees reporting improvements in their experiences with AI-driven systems.
A Cultural Shift in Canadian Enterprises
The rapid adoption of generative AI in Canada is somewhat surprising, given the traditionally cautious nature of Canadian enterprises. Karan attributes this accelerated adoption to a pressing issue that has long plagued Canadian businesses: productivity. Canadian companies have historically struggled with productivity growth, and the advent of generative AI presents a potential solution to this longstanding challenge.
Generative AI’s ability to enhance productivity stems from its capacity to streamline software engineering processes, reduce the time spent on mundane tasks, and address issues related to technical debt and enterprise usability. These factors have been significant impediments to productivity in both the public and private sectors for decades. “AI can cut through inefficiencies very quickly, especially in accessing data needed by multiple applications,” Karan explained. By breaking down data silos and making information more readily available to different applications simultaneously, AI is not only generating better outcomes but also improving the overall employee experience. Karan noted that their data shows a 4% improvement in customer satisfaction and a 5% increase in employee satisfaction, with expectations for these numbers to rise significantly over the next year.
Challenges in Highly Regulated Industries
Despite the enthusiasm for generative AI, some sectors are more hesitant than others, particularly those in highly regulated industries. Karan pointed out that discussions around AI’s potential to replace legacy mainframe systems are ongoing but are progressing slowly. “In Canada, many mainframe-dominated environments are in highly regulated industries like financial services and healthcare, and those industries are optimistic but not ready to move to replace their legacy hardware yet,” he said. This cautious approach is understandable given the critical nature of these industries, where the stakes are high, and any technological shift must be meticulously planned and executed.
Broader Implications and Future Outlook
The broader implications of generative AI adoption are significant, especially considering the key findings from Capgemini’s research. Eighty percent of organizations have increased their investment in generative AI since 2023, with 20% maintaining their investment levels. This trend underscores the growing confidence in generative AI’s ability to drive innovation and operational efficiency.
One of the most promising aspects of generative AI is its ability to enable the development of innovative software features and services. According to the survey, 61% of organizations reported that generative AI has facilitated the creation of new software capabilities. Additionally, 49% of respondents observed improvements in overall software quality, while 40% experienced a boost in productivity as a direct result of AI integration. These improvements are particularly noteworthy in the context of Canada’s productivity challenges, as they suggest that generative AI could be a critical driver of economic growth and competitiveness in the years to come.
Moreover, the potential of generative AI extends beyond productivity gains. It is poised to transform customer experiences, enhance employee engagement, and foster innovation across various sectors. As organizations continue to explore and refine their use of generative AI, the technology’s impact is likely to become even more pronounced.
A Global Perspective on Generative AI Adoption
The Capgemini Research Institute’s survey covered a broad range of industries and geographies, providing valuable insights into the global adoption of generative AI. The survey included 1,100 executives from organizations with over $1 billion in annual revenue, spanning 14 countries, including Australia, Canada, France, Germany, Italy, India, Japan, the Netherlands, Norway, Singapore, Spain, Sweden, the UK, and the US. These organizations operate across 11 sectors, nearly all of which (96%) have started to explore generative AI.
This global perspective highlights the universal appeal of generative AI, as well as the shared challenges and opportunities that organizations face as they navigate this rapidly evolving landscape. While the pace of adoption may vary from country to country, the underlying drivers—such as the need for innovation, efficiency, and enhanced customer experiences—are consistent across the board.
Conclusion: The Road Ahead for Generative AI in Canada
As generative AI continues to gain traction in Canada, the focus will increasingly shift from experimentation to implementation. While challenges remain, particularly in areas such as governance, fairness, and inclusivity, the potential benefits of generative AI are too significant to ignore. Canadian organizations are recognizing this and are investing accordingly, albeit with a cautious approach that reflects the need for responsible and ethical AI deployment.
The next few years will be critical in determining the long-term impact of generative AI on the Canadian economy and society at large. As more organizations move from pilot projects to full-scale implementation, the lessons learned will be invaluable in shaping the future of AI in Canada. If current trends continue, generative AI could play a pivotal role in driving productivity, innovation, and competitiveness in Canada, helping to address some of the country’s most pressing economic challenges.
In summary, while generative AI is still in its early stages, its adoption in Canada is accelerating at an unprecedented rate. Canadian companies are cautiously optimistic, recognizing both the opportunities and the challenges that come with this transformative technology. As they navigate this new frontier, the potential for generative AI to reshape industries and drive economic growth is becoming increasingly clear, marking an exciting new chapter in Canada’s technological evolution.
