U.S. Life Sciences CEOs Face Reality Check on Emerging Tech Investments
After bullish ROI outlook last year on artificial intelligence and other technologies, many CEOs see significant payoff in one-to-three years
Life science industry investments in digital transformation, such as artificial intelligence and other emerging technologies, may pay off slower than what was once expected, KPMG’s CEO Outlook found.
In last year’s survey, a quarter of U.S. life sciences CEOs said they had seen a significant positive return on investment on investments in digital transformation. None have said that this year.
This year, 80 percent of life sciences CEOs surveyed are now expecting a return on investment in one to three years – compared with 25 percent. Nine percent see a positive return on investment within a year, down from 33 percent. (Please see table below about artificial intelligence [AI].)
“This is a reality check about investing in technology,” said Justin Hoss, KPMG’s life sciences technology leader. “Moving to a digital enterprise is more than treating technology as a widget. It entails a holistic approach from how people work to how to engage patients. Pockets of tech implementation is not true digital transformation. That is just bolting on technology on top of existing processes.”
“As enterprises become more automated, we also need to take a harder look at what the future of work will look like in the life sciences industry and address talent needs to help meet that future,” added Katie Dahler, KPMG life sciences advisory leader. “AI and robotic technologies are actually expected to be job creators within the industry, but the skillsets that are needed will be different.”
KPMG’s CEO Outlook found that 80 percent of U.S. life sciences CEOs see technology adding jobs, an increase from 60 percent a year ago.
When asked about how far the implementation of AI is taking place in the U.S. life sciences sector, 30 percent said some of their processes have been automated, 48 percent have started limited implementations, and 23 percent are doing pilot programs for AI.
Life Sciences ROI Investments in AI
|Over what time period do you expect to see significant return on investment from artificial intelligence?||2019||2018||Diffference|
|Within 12 months||11%||30%||-19% points|
In 3-5 years
In 3-5 years
|We have already achieved significant return on investment||0%||25%||-25% points|
KPMG’s CEO Outlook surveyed more than 193 life sciences CEOs worldwide, including 44 based in the United States. Report was part of a broader survey of more than 2,500 CEOs at companies with more than $500 million in annual revenue that was conducted during the spring of 2019.