More than 60% of life sciences companies spent over $20 million on artificial intelligence initiatives last year, and more than half expected their AI spending to increase this year, according to a study released yesterday by Deloitte.
“Deloitte’s 2020 State of AI in the Enterprise Study, 3rd Edition,” released by the Deloitte AI Institute and Center for Technology, Media, and Telecommunications, examined how organizations in the life sciences and other industries were adopting, managing, and benefiting from AI technologies. Deloitte surveyed 2,737 executives in numerous tech-based industries—including 148 executives in biopharma and medtech companies whose responses were analyzed by the Deloitte Center for Health Solutions—and interviewed additional industry executives and experts to gain perspective on the survey results.
Deloitte cautioned that the survey was conducted before the COVID-19 pandemic, between October 2019 and December 2019. The firm asserted, however, that its findings were more relevant since the pandemic because it has compelled life sciences companies to focus even more on cutting costs, increasing product development, and better engage with partners at a time when humans are working more than ever alongside machines to enable far greater outcomes—what Deloitte calls the Age of With™.
Deloitte’s observations on the life sciences are contained in a survey within the larger study, “Scaling up AI across the life science value chain: Enhancing R&D, creating efficiencies and increasing impact.”
The survey, also released yesterday, summarizes key findings from that survey, and makes recommendations for how life sciences companies can gain immediate returns on investment and experience a competitive advantage over the longer term.
Among outcomes life sciences companies are attempting to achieve with AI, according to the survey, are enhancing existing products (28%), creating new products and services (27%), and making processes more efficient (22%).
Respondents identified four outcomes where they saw the greatest success using AI: making processes more efficient (43%), improving decision making (41%), enhancing existing products (40%), and enabling new business models (40%).
The top challenges those companies identified as impacting their AI initiatives include the difficulty of identifying business cases with the highest value (30%), data challenges (28%), and integrating AI into the organization (28%).
The survey also found differences in how much biopharma and medtech companies invested in AI projects and technologies during the past year, how much they plan to invest, and how closely the payoff from their investments matched their expectations:
- A plurality (41%) invested $20 million to $50 million, while 26% invested $10–20 million and 21%, more than $50 million in AI initiatives.
- More than half of survey respondents said they expected their investments in AI will continue to increase throughout 2020, as AI moves from tactical improvements in efficiency to larger-scale, organization-wide projects.
- Nearly half (46%) of respondents said it takes longer than expected to receive payback from investments in AI initiatives.
“The life sciences industry has only begun to scratch the surface of AI’s potential but the good news is biopharma and life sciences leaders see the potential and are willing to make the investments necessary to realize what’s possible,” Aditya Kudumala, principal, Deloitte Consulting, said in a statement.
Kudumala added that life sciences companies should carefully plan and strategize to ensure that their investments yield the outcomes they seek.
Those processes include identifying the building blocks of a successful AI effort—which he identified as technology and data, tech architecture, ecosystems and alliances, talent, and risk management—and scaling up AI by building an AI center of excellence, undertaking pilot projects, and establishing a governance framework to ensure that AI addresses business priorities.
“By spending time on a solid strategy, putting the building blocks in place for success and leveraging relationships with relevant partners, AI can help transform the life sciences industry as we know it and get the necessary products to market more quickly,” Kudumala added.
