July 23, 2024

Advancing Digital Growth

Pioneering Technological Innovation

Analysis on artificial intelligence use by businesses in Canada, second quarter of 2024

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Release date: June 20, 2024









As
technologies advance, businesses are exploring how they can be used to improve efficiency.
In Canada, technology
adoption and innovation was reported by businesses as the leading factor (28.3%Note  )
 that improved their operational efficiency over the last year. Among technological advancements adopted
by businesses, the integration of artificial intelligence (AI) in business
processes is becoming more common.

AI has many
different applications and can be used in a variety of ways across industries,
ranging from customer service chatbots to predictive analytics in health care.
One of the ways businesses are using AI is in producing goods and delivering
services. While AI adoption for this purpose is in its early stages among
businesses in Canada, 6.1% of all businesses made use of AI in producing goods
and delivering services over the last year.  

From
the beginning of April to early May 2024, Statistics Canada conducted the Canadian
Survey on Business Conditions to collect information on the environment
businesses are currently operating in and their expectations moving forward.
This iteration of the survey contains a new set of questions aimed at examining
the use of AI by businesses in Canada. This article explores results from the survey related to the use
of AI in producing goods and delivering services. Furthermore, this article
explains the specific types of AI being used, such as machine learning, virtual agents and
voice recognition, as well as the impact of AI adoption on tasks performed by
employees and on employment levels.

Businesses in information and cultural industries
leading artificial intelligence use

While 6.1% of all businesses have made use
of AI in producing goods and delivering services over the last 12 months, AI uptake varies by industry. The
industries in which businesses were most likely to have used AI in
producing goods or delivering services were information and cultural industries
(20.9%); professional, scientific and technical services (13.7%); and finance
and insurance (10.9%). Conversely, businesses least likely to
be using AI for this purpose were in agriculture, forestry, fishing and hunting
(0.7%); accommodation and food services (0.9%); and mining, quarrying, and oil
and gas extraction (1.6%).

Among businesses that reported using AI in
producing goods or delivering services (6.1%), the most common application of AI used was natural language processing, reported by over one-quarter (28.9%)
of businesses, followed by text analytics using AI (27.0%), virtual agents or
chatbots (26.5%), data analytics using AI (25.0%), large language models
(21.9%), and image and pattern recognition (21.8%).

As with AI use, the specific applications used by businesses differ
by industry. For instance, among the businesses using AI in information and
cultural industries (20.9%), over two-fifths (41.3%) reported using natural
language processing, followed by over one-third (35.2%) using large language
models, and over one-quarter (28.6%) using speech or voice recognition using AI.
Meanwhile, among businesses in
professional, scientific and technical services using AI (13.7%), the most
common use was image or pattern recognition, reported by almost half (47.1%) of
these businesses, followed by machine learning (39.0%). Of
businesses in finance and insurance using AI (10.9%), two-thirds (66.8%)
reported using virtual agents or chatbots, followed by 34.2% using data analytics
using AI.



























Table 1


Use of artificial intelligence (AI) by selected industries in producing goods or delivering services over the last 12 months, second quarter of 2024

Table summary
This table displays the results of Use of artificial intelligence (AI) by selected industries in producing goods or delivering services over the last 12 months, second quarter of 2024. The information is grouped by Type of AI application used (appearing as row headers), Information and cultural industries, Professional, scientific and technical services, Finance and insurance and All industries, calculated using percent of businesses units of measure (appearing as column headers).

Type of AI application used All industries Information and cultural industries Professional, scientific and technical services Finance and insurance
percent of businesses
Notes: The results in this table are based on the survey that was in collection from April 2 to May 6, 2024, and respondents were asked what the business or organization experienced in the last 12-month period. As a result, those 12 months could range from April 2, 2023, to May 6, 2024, depending on when the business responded.


Source: Canadian Survey on Business Conditions, second quarter of 2024 (Table 33-10-0825-01).
AI used in producing goods or delivering services 6.1 20.9 13.7 10.9
Natural language processing 28.9 41.3 24.2 30.5
Text analytics using AI 27.0 27.1 37.7 23.7
Virtual agents or chatbots 26.5 26.8 25.4 66.8
Data analytics using AI 25.0 18.4 27.0 34.2
Large language models 21.9 35.2 32.2 28.3
Image or pattern recognition 21.8 15.7 47.1 5.2
Machine learning 20.1 17.3 39.0 12.9
Speech or voice recognition using AI 18.1 28.6 12.5 30.8
Marketing automation using AI 15.2 28.0 16.0 5.9
Recommendation systems using AI 12.3 8.8 17.5 18.2
Decision making systems based on AI 6.1 10.2 1.1 20.9
Machine or computer vision 4.7 7.5 4.7 4.2
Neural networks 4.4 14.9 6.0 2.0
Augmented reality 2.6 2.7 2.5 2.1
Robotics process automation 2.6 2.4 0.9 3.6
Deep learning 1.9 4.9 1.9 2.0
Biometrics 1.0 2.4 0.0 2.5
Other 6.7 18.3 4.3 0.8


Majority of businesses reported no change to
their number of employees after adopting artificial intelligence

A frequent question is whether and
to what extent AI leads to employment reduction through the elimination of
tasks previously performed by employees.  The vast majority of businesses (84.9%)
reported no change in their employment levels after implementing AI in
producing goods or delivering services. Of the businesses who reported using AI (6.1%), 6.3% of those businesses in Canada reported their total employment
decreased after AI introduction. Similarly, among the industries leading in AI use, the majority of
businesses reported no change to their employment after implementing AI. This
was reported by 91.2% of businesses in finance and insurance, followed by 89.8%
of businesses in professional, scientific, and technical services, and 79.2% of
businesses in information and cultural industries. Meanwhile, 17.6% of
businesses in information and cultural industries reported an increase in
employment after implementing AI in producing goods or delivering services,
followed by 10.0% in professional, scientific and technical services and 1.8%
in finance and insurance.

Businesses that reported using AI in
producing goods or delivering services (6.1%) were asked to what extent AI reduced tasks previously performed by employees. Overall, nearly half (44.1%)
of these businesses found the use of AI reduced tasks previously performed by employees
by a small extent, while 39.2% reported tasks were reduced either by a moderate
or large extent. Nearly half of businesses in finance and insurance (48.3%)
and professional, scientific and technical services (47.2%) reported tasks
previously performed by employees were reduced by a small extent. Similarly,
42.5% of businesses in information and cultural industries reported AI reduced
tasks previously performed by employees by a small extent with almost one-quarter
(21.4%) reporting tasks were reduced by no extent.












Table 2


Extent to which artificial intelligence has reduced tasks previously performed by employees by selected industries, second quarter of 2024

Table summary
This table displays the results of Extent to which artificial intelligence has reduced tasks previously performed by employees by selected industries, second quarter of 2024 Moderate or large extent, Small extent and No extent, calculated using percent of businesses units of measure (appearing as column headers).

  Moderate or large extent Small extent No extent
percent of businesses
Notes: The results in this table are based on the survey that was in collection from April 2 to May 6, 2024, and respondents were asked what the business or organization experienced in the last 12-month period. As a result, those 12 months could range from April 2, 2023, to May 6, 2024, depending on when the business responded.


Source: Canadian Survey on Business Conditions, second quarter of 2024 (Table 33-10-0826-01).
All industries 39.2 44.1 16.7
Information and cultural industries 36.1 42.5 21.4
Finance and insurance 28.3 48.3 23.3
Professional, scientific and technical services 42.1 47.2 10.7


More businesses are training employees in artificial
intelligence use

AI has the potential to reshape how
businesses operate. In the process, it inevitably necessitates changes. Businesses
that reported the use of AI in producing goods or delivering services (6.1%) were
asked about the changes made to the business when AI was implemented. Most
commonly, 38.5% of businesses trained current staff to use AI. Furthermore,
35.2% of businesses developed new workflows after implementing AI, while 20.9%
changed data collection or data management practices. Conversely, hiring staff
trained in AI was the least common change reported by businesses when using AI to produce goods or deliver services, with 8.2% reporting this change.
















Table 3


Changes made by businesses when using artificial intelligence (AI) in producing goods or delivering services, second quarter of 2024

Table summary
This table displays the results of Changes made by businesses when using artificial intelligence (AI) in producing goods or delivering services, second quarter of 2024 , calculated using (appearing as column headers).

  percent of businesses
Notes: The results in this table are based on the survey that was in collection from April 2 to May 6, 2024, and respondents were asked what the business or organization experienced in the last 12-month period. As a result, those 12 months could range from April 2, 2023, to May 6, 2024, depending on when the business responded.


Source: Canadian Survey on Business Conditions, second quarter of 2024 (Table 33-10-0827-01).
Trained current staff to use AI 38.5
Developed new workflows 35.2
Changed data collection or data management practices 20.9
Purchased computing power or specialized equipment 16.5
Purchased cloud services or cloud storage 16.1
Used in vendors or consulting services to install or integrate AI 11.3
Hired staff trained in AI 8.2
Other 0.0
None 28.1


Newer businesses more likely to plan to adopt
artificial intelligence software over the next 12 months

Newer
businesses are more likely to have plans to adopt AI software over the next 12
months than older businesses. Businesses aged 10 years or less (31.0%) were
more likely to report plans to adopt software using AI than businesses aged 11
years or more (18.7%). Close to 1 in 10 businesses aged 10 years or less (9.8%)
and aged 11 years or more (8.9%) planned to adopt hardware using AI within the
upcoming year.


Chart 1 Businesses with plans to adopt or incorporate artifical intelligence software and hardware over the next 12 months by age of business, second quarter of 2024

Data table for Chart 1










Data table for Chart 1


Table summary
This table displays the results of . The information is grouped by Age of business (appearing as row headers), Hardware using artificial intelligence and Software using artificial intelligence, calculated using percent units of measure (appearing as column headers).

Age of business Hardware using artificial intelligence Software using artificial intelligence
percent
Notes: The results in this table are based on the survey that was in collection from April 2 to May 6, 2024, and respondents were asked what the business or organization experienced in the last 12-month period. As a result, those 12 months could range from April 2, 2023 to May 6, 2024, depending on when the business responded.




Source: Canadian Survey on Business Conditions, second quarter of 2024 (Table 33-10-0822-01).
11 years or more 8.9 18.7
10 years or less 9.8 31.0
All ages of businesses 5.0 11.5



Businesses were more likely to have plans to adopt AI software over the
next 12 months in professional, scientific and technical services (26.6%); information
and cultural industries (24.3%); and finance and insurance (12.9%). Meanwhile,
businesses were more likely
to plan to adopt AI hardware over the next 12 months in agriculture, forestry, fishing and hunting (10.8%); professional,
scientific and technical services (10.0%); and transportation and warehousing (9.9%). It is important to note that these
results refer to the future plans of all businesses, irrespective of whether
they are already using AI or have previously used AI technologies.

Methodology

From April 2 to May 6, 2024, representatives from businesses
across Canada were invited to complete an online questionnaire about business
conditions and business expectations moving forward. The Canadian Survey on
Business Conditions uses a stratified random sample of business establishments
with employees classified by geography, industry sector and size. Proportions are
estimated using calibrated weights to calculate the population totals in the
domains of interest. The total sample size for this iteration of the survey was
20,996 and results are based on responses from a total of 10,173 businesses or
organizations.

References

Statistics Canada. 2024. Canadian Survey on Business
Conditions, second quarter of 2024.















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