February 15, 2024
Rapid advances in Artificial Intelligence (AI) technology have sparked excitement among businesses eager to harness its potential. However, the actual adoption of AI has not kept pace with this enthusiasm. While almost half of S&P 500 companies have mentioned AI in earnings calls since May, only 4.4% of businesses in the United States report using AI to produce goods or services. In Canada, the adoption rate is even lower, with only 3.7% of businesses reporting the use of AI technologies.
Analysis of the most recent data collected by Statistics Canada reveals that firm size and sector significantly influence AI adoption. Larger firms, particularly those with 100 or more employees, are more likely to adopt AI, with a 20% adoption rate. Industries such as utilities, finance, insurance, information, and cultural industries are at the forefront of AI adoption. However, sectors that contribute significantly to Canada’s GDP, like real estate and manufacturing, lag behind with weaker adoption rates.
The main obstacle to AI adoption, cited by 69% of Canadian businesses not using AI technology, is the challenge of identifying a business case for AI. Additionally, 28% reported being unaware of the available AI tools. For firms already in the AI marketplace, the cost of technologies and skills gaps in their workforces were identified as the primary barriers to adoption.
In a global context, Canada ranks 20th out of 35 countries for AI adoption among firms with 10 or more employees. This ranking further underscores the potential for Canadian businesses to accelerate their AI adoption strategies to remain competitive on the global stage.
Author: Cristin Hunt, 2023/2024 Articling Student