43% of enterprises investing in breakthrough GenAI technology, EY study reveals

The EY Reimagining Industry Futures Study has confirmed that 43% of the 1,405 enterprises surveyed are investing in generative AI (GenAI), qualifying it as a breakthrough technology. According to the study, GenAI ranks third among nine emerging technologies being tracked, with automation and AI taking the top spot. Among those investing in GenAI, 80% are working on proof-of-concept applications, while 20% have pilot projects in progress.

A cautious trend is noted among businesses regarding GenAI adoption, with 38% favouring a measured, incremental rollout. This trend underscores sensitivities related to ethics and accountability issues. An overwhelming 73% indicated a need to improve their understanding of GenAI concepts and use cases. Additionally, 69% expressed a desire to learn more about the associated risks, and 52% voiced concerns over potential job displacement.

When it comes to GenAI, businesses are primarily focused on enhancing data governance to mitigate risks associated with data accuracy and ethical issues, as per 46% of respondents. The main identified GenAI use cases include employee training and collaboration (36%) and customer sales and service (35%).

Tom Loozen, EY Global Telecommunications Leader, said, "One of the biggest trends emerging from this year's study is the momentum behind GenAI investment, as businesses continue to evaluate its overall impact on their organisation. This frontier technology is redefining the possibilities around enterprise transformation. However, there are a host of strategic and practical challenges raised by adoption, not least in relation to data governance."

The study also revealed a growing yearly investment in 5G, now standing at 79%. American businesses continue to lead in this area, with 82% either currently investing or planning to. However, Europe and Asia are catching up, with 79% and 78% of enterprises, respectively, either currently investing or planning to—up over 10 percentage points from last year.

Cybersecurity and data protection risks have been identified as the top challenges for 5G, a finding influenced by the escalating number of cyber attacks targeting IoT devices. Looking towards the future, businesses are keen to explore the relationship between 5G, AI and other emerging technologies, as noted by 42% of respondents.

Adrian Baschnonga, EY Global TMT Lead Analyst, warned, "Integrating different emerging technologies is now a priority for businesses, but technology vendors aren't meeting expectations. The study tells us that 59% of enterprises don't believe that sufficient AI capabilities are included within the IoT solutions offered."

The EY Reimagining Industry Futures Study 2024 is based on an online survey of 1,405 enterprises conducted in November 2023, the fifth wave of this annual survey. The questionnaire was comprised of multiple-choice questions and agreement statements, with respondents drawn from multiple industry verticals and geographies. Only respondents who self-selected as "Moderately knowledgeable" and above about their organizations' IoT and 5G initiatives feature in the survey results.