Asia Pacific industrial AI held back by skills shortages

Octave has published research showing that skills shortages and knowledge retention are emerging as key barriers to industrial AI adoption in Asia Pacific. The study surveyed more than 750 industrial technology decision-makers worldwide.

The findings suggest workforce readiness is overtaking concerns about the underlying technology as industrial groups prepare to expand AI use in operations. More than half of organisations in Asia expect frontline workers to oversee AI-driven systems across multiple teams or much of the workforce by 2028.

Among the skills seen as most important for future industrial workers, 38% of respondents cited systems thinking and operations management. Cross-functional communication ranked next at 34%, followed by cybersecurity and data governance at 32%.

Human-machine interaction also featured prominently, with 25% identifying it as a critical area for the future workforce. The results suggest companies expect workers to combine technical understanding with broader operational judgement as AI becomes more embedded in industrial settings.

South Korea stood out for its focus on both skills and knowledge capture. Some 59% of respondents there identified systems thinking as the most important future skill, while 54% said their organisations already use AI-enabled tools to capture and transfer operational knowledge.

That emphasis reflects a wider regional concern about expertise leaving the workforce as experienced staff retire. Nearly half of organisations in Asia Pacific, or 48%, said they already use AI-powered tools to preserve knowledge and make it available to younger workers.

Japan emerged as one of the markets most focused on the workforce risks tied to AI adoption. There, 38% of respondents said failure to upskill workers sufficiently was the greatest AI-related risk facing their organisation over the next five years.

Japanese respondents also reported some of the highest levels of concern about undocumented operational knowledge remaining with veteran workers rather than being formally captured. That points to a challenge for industrial employers that rely on practical know-how built up over decades on factory floors, energy sites and transport networks.

In Australia, the research highlighted a different anxiety around AI in industrial workplaces. Some 28% of respondents said they were concerned about the potential loss of expert status and trade knowledge as AI becomes more common in operational environments.

The study also suggests concerns over AI in industry are shifting beyond job losses alone. Across Asia Pacific, 25% said the biggest workforce concern was the risk of AI mistakes leading to safety incidents, while transparency and trust in AI decision-making also ranked highly.

Workforce pressure

The results come as industrial companies across the region face pressure to modernise operations while dealing with ageing workforces, tightening labour markets and rising cybersecurity demands. In sectors such as manufacturing, energy, infrastructure and transport, AI is increasingly shaping decisions once handled largely through human judgement and local experience.

Fabio Yada, Senior Vice President, APAC, Octave, said the central issue had shifted from deployment to preparation. "The discussion around industrial AI has moved beyond technology deployment," Yada said. "The challenge now is preparing people to work alongside increasingly intelligent systems while preserving the operational expertise that organisations depend on."

The survey points to a broader definition of digital readiness in industrial businesses. It is no longer limited to buying software or connecting equipment, but increasingly includes whether organisations can train staff, retain hard-won expertise and build confidence in automated recommendations.

Knowledge capture

Knowledge capture appears particularly urgent because much industrial expertise is tacit rather than formally documented. Maintenance practices, responses to abnormal operating conditions and site-specific workarounds often reside with experienced workers rather than in manuals or systems.

Yada said companies were paying more attention to that risk. "For decades, organisations have focused on capturing data from assets and operations. Today, they're increasingly focused on capturing expertise from people," he said. "The organisations that succeed will be those that can combine operational knowledge, connected data and AI to accelerate learning, improve decision-making and build workforce resilience."

Octave, which was spun out of Hexagon earlier this year and is listed on Nasdaq, said the research formed part of a broader global study into AI adoption, workforce development, operational knowledge management and industrial resilience. The company employs about 7,200 people across 45 countries.

The survey covered organisations with revenue above USD $1 billion, suggesting the findings reflect the views of large industrial employers with substantial technology budgets. Even so, the results indicate the harder part of AI adoption may now lie less in access to tools than in whether companies can build workforces able to trust, manage and learn from them.