A new study commissioned by IBM revealed that while Asia Pacific (APAC) organizations are increasing investment in artificial intelligence (AI) and Industry 4.0 capabilities, many overestimate their actual maturity and struggle with fundamental challenges in holistic adoption.

The firm said in a report on last Thursday that only 11 percent of organizations truly AI-ready, Despite 85 percent claiming to be.

This stark disconnect highlights a pressing opportunity: With the right focus, many enterprises can turn ambition into action and accelerate their journey from Industry 4.0 towards Industry 5.0.

According to the report, although 85 percent of respondents rated themselves as “data-driven” or “AI-First,” the study’s objective assessment found only 11 percent were in higher-maturity stages (9 percent data-driven; 2 percent AI-First).

This gap suggests that strategic investments could be misaligned if leaders overestimate their level of maturity, potentially leading to missed bottlenecks and stalled progress in their transformation efforts.

Key barriers include strategic misalignment, people and adoption blind spots, siloed execution, slow core modernization and limited AI integration.

It is noted that only 10 percent of organizations have a fully embedded Industry 4.0 strategy, while 70 percent have strategies without execution, siloed plans, or isolated pilots, risking fragmented and ineffective progress.

Meanwhile, 19 percent worry about employee resistance, and only 26 percent run formal upskilling or change-management programs, leaving only 16 percent confident in their in-house expertise.

Without focused investment in capability development and engagement, AI pilots risk stalling.

Around 67 percent pursue ad hoc, department-level use cases, and 73 percent lack mechanisms for cross-team knowledge sharing, hampering collaboration and innovation.

This decentralized approach hinders collaboration and slows the pace of innovation.

Only 40 percent have broadly adopted predictive maintenance, and just 37 percent enjoy real-time supply-chain visibility, exposing organizations to downtime and disruptions.

Although 63 percent focus AI on isolated processes, only 10 percent treat AI/machine learning (ML) as a strategic pillar, leaving end-to-end, intelligent operations largely unrealized.

Looking ahead, moving from Industry 4.0 to Industry 5.0—where human-centricity, sustainability, and resilience become core—remains a major hurdle, according to the report.

It showed only 23 percent of organizations have customer feedback loops that inform strategic decisions in functions like Product Design and Operations.

Meanwhile, 28 percent have invested in real-time sustainability tracking, and only a quarter of those can measure and report progress effectively.

Cyber-resilience readiness is narrowly focused as 50 percent of organizations rely solely on basic controls (firewalls and endpoint security), with limited adoption of advanced practices such as vendor-risk assessment, SIEM or AI-driven governance.

Strengthening these areas will be essential to future-proof industrial transformation and build trust, adaptability, and long-term value, the report highlighted.

“APAC is uniquely positioned to lead in AI-driven Industry 4.0 transformation. With strong national strategies, active public-private collaboration, and a willingness to experiment, the region continues to advance through rapid innovation and real-world deployment,

“The winners will be those who establish secure, adaptable digital foundations, and those who empower their people to turn bold ideas into action,” said Ong Tun Kim, General Manager of IBM Manufacturing Solutions.

To bridge the gap between ambition and reality and set the stage for Industry 5.0, the report said organizations must adopt a holistic, strategic approach.

These include establish a value-driven tech strategy to align technology adoption with measurable business outcomes and return of investment (ROI).

The organizations are advised to leverage core tech for cross-functional impact: start by strengthening core platforms to enable end-to-end visibility and knowledge sharing.

Treat data as a strategic asset is another suggested approach. Organizations are suggested to break down silos and integrate cross-functional data to build an AI-ready foundation that powers enterprise-wide insights.

The report also called organizations to prepare for rapid technology integration by developing agile approaches to integrate new technologies efficiently with existing infrastructure, and embed Industry 5.0 thinking today with center transformation on human-centricity, sustainability, and resilience to build a future-ready enterprise.

“As APAC organisations lean into these shifts, they can transform isolated proofs of concept into enterprise-scale solutions that drive competitive advantage and pave the way for a human-centric, resilient industrial future,” concluded Ong Tun Kim, General Manager of IBM Manufacturing Solutions.

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