In Southeast Asia, it is the youngest, digitally native generation that is setting the pace for technology adoption, especially when it comes to generative AI and emerging tools. Students and professionals taking their first steps into the world of work—often referred to as “Generation AI”—are not waiting for top-down directives. They are already integrating these technologies into their daily routines, increasing efficiency and enhancing their skillsets in the process.

For business leaders, the message is clear: the next wave of innovation is already here, and it’s being driven from the bottom up. The challenge now is for leaders to match that momentum, translating grassroots adoption into sustainable, scalable enterprise strategies.

Across the Asia-Pacific region, Deloitte’s Generation AI 2024 report highlights a growing gap between tech-savvy employees and the preparedness of their organisations. While young professionals are saving up to 6.3 hours per week using generative AI and reinvesting that time into learning new skills, many employers are still playing catch-up. This disconnect underscores the urgency for leaders to convert employee enthusiasm into structured, strategic transformation plans.

The potential impact is significant. Generative AI could affect up to 17% of total working hours in the region—equivalent to nearly 1.1 billion hours annually. Industries such as finance, ICT and media, professional services, and education, which make up around 20% of the region’s GDP, are especially susceptible to what Deloitte calls a “short-fused big bang” scenario. It’s telling that over 40% of students using generative AI intend to start their careers in these sectors, which will only accelerate transformation. The takeaway for leaders is clear: adapt quickly or risk losing talent and competitive edge.

To navigate this shift, Deloitte recommends clear, deliberate action: companies should develop and implement Gen AI strategies that involve employees at all levels, empower teams to own their AI journey, and build scalable, flexible data infrastructures. CEOs and senior executives, in particular, are encouraged to go beyond optimising existing processes and instead use AI as a catalyst to reimagine their entire business models.

How do we structure the transition?

Of course, real transformation requires vision and trust. According to AI at a Crossroads (Deloitte, December 2023), trust in AI systems is central to capturing their full value. Developed with the Deloitte AI Institute, the report surveyed nearly 900 senior executives across 13 Asia-Pacific markets, including six in Southeast Asia: Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam. The key takeaway: governance is an enabler of value at scale.

Executives who prioritise robust governance frameworks report improved operational efficiency, stronger risk management, and a more reliable path to innovation. With AI investments in Asia-Pacific expected to reach $110 billion by 2028, the stakes are high. Leaders across SEA are beginning to recognise that integrating AI responsibly is crucial.

That said, awareness of the risks remains acute. Security vulnerabilities and privacy issues rank high on the agenda, particularly in advanced digital markets like Singapore. In that market, 96% of leaders cited cybersecurity as a major concern, and 94% flagged data privacy. Alarmingly, 35% of Singaporean organisations experienced AI-related incidents in the past fiscal year—the highest in the region. However, those with strong incident response and remediation plans expressed significantly lower concern, highlighting the practical value of sound governance.

To support leaders in managing this complexity, Deloitte’s Trusted AI Framework offers a comprehensive approach. Built on seven core pillars—transparency, fairness, robustness, privacy, security, responsibility, and accountability—the framework should be applied from the earliest design phases through to deployment. Organisations that do this successfully report broader AI adoption, higher staff engagement, and revenue growth nearly 5% above their less-prepared peers.

Don't overlook the human side

But even the best governance can’t substitute for human readiness. While more than 70% of younger employees in Southeast Asia have already adopted generative AI, fewer than two-thirds of organisations believe their workforce has the skills to use AI responsibly. Singapore, in particular, faces a pronounced talent gap, with many businesses turning to external hires. Elsewhere in the region, leaders are actively investing in workforce upskilling to close this readiness divide.

This dual focus on digital infrastructure and human capital is clearly reflected in national strategies across Southeast Asia:

Indonesia is pairing Microsoft’s $1.7 billion investment in AI and cloud infrastructure with a plan to train 840,000 Indonesians in digital and cloud skills.

Thailand aims for its digital economy to contribute 30% of GDP by 2030, supported by major investments from Google, Microsoft, and Amazon Web Services in AI hubs and local data centres.

Malaysia is positioning itself as a global semiconductor powerhouse, committing $12.8 billion to electronics and chip assembly and training 60,000 engineers under its National Semiconductor Strategy.

And don't forget the independent efforts from companies of all sizes. Not only the big tech firms, but other, firmly regional and local players across multiple industries are driving AI adoption and integration. The interest is there, now it's up to the leaders to harness it and make the change truly impactful.