Contact us anytime to know more — Abhishek P., Founder & CFO CISIN
We decided to use our expertise in deep analysis of AI applications and implications in light of the Indian government's recent emphasis on creating an artificial intelligence plan.
Our goals were to ascertain
(a) the level of AI innovation in India and
(b) strategic insights to support India's use of AI initiatives to survive and grow in the global market.
To produce this blog, we gathered the views of specialists from the Indian government, Indian AI startups, Indian academic researchers in AI, and data science executives from some of the biggest Indian organizations, such as Reliance ADA, Amazon, AIG, Equifax, Infosys, NVIDIA, and many more.
During the research, we had three goals in mind:
- In order to comprehend India's embrace of AI.
- To ascertain the advantages and disadvantages of artificial intelligence for Indian business and society.
- To offer strategic suggestions to the Indian government and leaders of the tech community regarding the use of AI to advance India's prosperity.
To start, let's look at what we discovered on the adoption of AI in India:
An Overview Of AI Adoption And Potential In India
Has the Indian government "woken up" to AI? Although there are differing expert viewpoints on this subject, our analysis allowed us to identify the following themes:
- The majority of experts concurred that while India appears to be adopting AI at the grassroots level right now, innovation in creating a holistic AI strategy for the future isn't happening at the same rate as it does in China or America.
- The majority of the current momentum in India appears to come from government AI pilot programmes in the fields of healthcare and agriculture, as well as the rise of AI companies in Indian software hubs such as Bangalore and Hyderabad.
- According to some of the experts we spoke with, India's developing economy will significantly impede the widespread use of AI.
- Although the implementation of AI lags attention, the Indian government and IT centers are undoubtedly aware of it and frequently enthusiastic about it.
- India may develop as the global center for data cleansing.
There is a need for human-trained AI, and the IT services sector could easily fill it (as Figure Eight, Clickworker, Gengo.ai, and other participants in the human-assisted AI training market attest to).
- AI applications with societal benefits, such as those in agriculture, health care, and education, are being promoted by the Indian government.
Although these industries have a significant direct financial impact, the government appears to be prioritizing the health and welfare of its people.
India's Artificial Intelligence Prospects And Strengths
The following statement from the Vice President of Data Sciences, ML & AI InMobi will be very helpful to our business audience in understanding some of India's greatest advantages when it comes to using AI.
He briefly outlined India's four greatest defenses against the impending AI disruption:
- Due to the automation of IT services, India has an abundance of skilled engineering talent that has to be directed to a new path.
This talent has been there for the past 20 years.
This fundamental engineering foundation is necessary to use AI in large-scale projects.
- Independent of engineers, India's culture generates a lot of mathematicians, programmers, and statisticians.
Bangalore and, to a lesser extent, Hyderabad already have respectable ecosystems in place.
In the last five years, London has essentially attempted to develop its tech sector.
Bangalore has spent the previous twenty-five years at it.
- Data: Our nation is quickly becoming digital.
The Aadhar or UIDAI Project in India, for instance, is the world's largest project involving unique identifiers.
India is aggressively promoting the creation of public datasets more and more, and its democracy gives it an advantage over China, where public data may only be accessible by the government.
- Approximately 3 million individuals in India work directly in the IT services sector, accounting for 14% of the country's GDP.
Although it was a routine activity requiring ability, it presents a significant possibility for automation and machine learning.
Observing this, major firms in the IT services industry, like Infosys, Wipro, and others, began internal reorganizations to embrace AI.
Our examination of India's AI strengths and potential revealed the following points:
- Due to India's present emphasis on a mobile platform-first strategy, mobile devices are probably how most Indians will initially access the internet.
In India, there were more than 1 billion mobile phone users in 2016.
This implies that for AI in the nation, there are frequently no standardization or compatibility problems arising from legacy systems (such as PCs or Macs) for new technologies that are being developed from scratch in B2C and B2B applications.
- Any large-scale AI project needs access to massive volumes of data.
India's size and variety present an opportunity in this regard.
- An enormous number of engineers and mathematicians graduate from India's several universities each year; these are two disciplines that are essential to the development of any AI system.
The nation with a growing young population may be able to stay up (at least in certain industries or cities) with the true cutting edge of artificial intelligence (AI) thanks to the internet, which promises to reduce the gap between Indian enterprises and researchers and computer science classes in the developed world.
- The introduction of AI-focused government initiatives like the AI Task Force and NITI Aayog is part of a government push towards digitalization, and these projects are likely to ignite more interest in artificial intelligence among businesses and researchers.
India's Artificial Intelligence: Threats And Weaknesses
Our investigation into the vulnerabilities and threats associated with AI in India revealed the following points:
- Access to venture finance is scarce even though VCs in AI are beginning to appear.
- Lack of cooperation, particularly in the field of artificial intelligence, between academics and industry.
- Absence of bold or innovative goal-setting in the tech industry.
- Language and translation problems are widespread in India, which makes interstate cooperation extremely difficult.
This slows down the flow of information and makes it difficult to grow a firm.
- A general lack of familiarity with AI compared to tech hubs in Europe or the US, even within the tech community.
Read more: 4 Types of AI — How Much Will They Transform Our World?
Strategic Recommendations For Success In The Indian Artificial Intelligence Ecosystem
Optimizing AI's Economic Impact: IT Services And Skills At The Speed Of Today
India has always lagged in embracing technological advancements. Still, with its expanding internet connectivity and youthful pool of tech-savvy engineers, it could leapfrog other countries in the AI era.
AI automation may present difficulties for the business process outsourcing (BPO) and IT services sectors, which are vital to India's economy. But in the AI era, these industries could go through three possible transitions:
- Automation Threat: Unless India develops and upskill its workforce for these new ventures, the sectors may be endangered by companies automating basic services, which could result in job losses.
- Low-Value jobs: If low-value jobs like image tagging and data processing are performed at the bottom of the value chain, this may limit economic growth and undermine India's leadership in technology.
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AI innovation: India may be at the forefront of automating or enhancing corporate operations using AI by utilizing its extensive knowledge of business processes.
This would include advancing up the value chain, offering more worthwhile and engaging labor, and possibly establishing India as a global leader in technology.
India's growth depends on the services sector, especially IT services and BPO, and there are many benefits to concentrating on innovation in these fields:
- It gives millions of technology graduates nationwide real-world tech exposure.
- By providing better pay and more interesting work, moving up the value chain may help employers keep top graduates in the country and stop the brain drain to other nations.
- Encouraging young people to work on complex challenges may result in the formation of companies that promote innovation.
- Like Silicon Valley VCs, a focus on competitive advantage entails locating domain knowledge and confidential information that India can "own" and leverage to create value.
India is well-positioned to lead in white-collar and business process automation due to its proficiency in customer service operations, call center operations, data management, HR, and payment processing processes.
Identifying sectors where Indian firms hold significant comparative advantages globally and where substantial economic opportunities exist would be their primary objective in optimizing the economic impact of AI.
Highlights Of India's SWOT Analysis Of AI
Strengths
- India has long been a major producer of mathematicians, engineers, and software developers each year.
Furthermore, about half of Indians are under 25, and nearly two-thirds are under 35.
With a median age of 29, India will be the youngest nation on Earth by 2020, while China's median age will be 37 years old.In the upcoming ten years, India will need to employ an increasing number of young scientists and engineers.
At the size of a nation like India, implementing any AI policy will necessitate building this pool of youthful, skilled labor.
- India's established IT environment will make the switch to AI services comparatively simpler.
- A significant portion of the nation's GDP during the past 25 years has come from the IT and IT industries (see figure below).
Today, cities like Hyderabad and Bangalore are growing into major hubs for the export of IT services.
Bangalore remains the hub of India's startup ecosystem, which is currently ranked third globally.
In addition to the lower labor costs, the business has reached a mature stage, and it makes financial sense to use AI to upskill workers.
- Prompt government funding programmes to produce high-quality AI ecosystem building blocks.
(Historically, the Indian government has been hesitant to respond to technological advancements.
For example, the country's IT sector took ten years to develop compared to the US or China completely.)The Ministry of Electronics and Information Technology, Government of India, has been funding educational institutions' projects in the fields of ubiquitous computing and wireless sensor networks for real-time landslide monitoring and perception engineering (e.g., artificial sensing, perceptual robotics) in order to support AI programmes financially.
For the past ten years, the ministry has also been running the Technology Incubation and Development of Entrepreneurs (TIDE) programme to support technological innovation.The Ministry of Electronics and Information Technology, Government of India, has been funding educational institutions' projects in the fields of ubiquitous computing and wireless sensor networks for real-time landslide monitoring and perception engineering (e.g., artificial sensing, perceptual robotics) in order to support AI programmes financially.
To promote technological innovation, the ministry has also been running the Technology Incubation and Development of Entrepreneurs (TIDE) programme for the past ten years.
Weaknesses
- Collaboration between academia and industry has historically been extremely undeveloped.
As per Fujitsu's 2005 analysis, which examined university-industry ties in Asian nations, the number of such collaborations in India became noteworthy (similar) only after 2003.They are establishing a network of partnerships between government agencies, startups, academic institutions, and the services and product industries.
For instance, take the robotics-focused ROBO CLUSTER initiative.
In this sense, Centres of Excellence are a good place to start.
Opportunities
Discover the rapidly developing nation of AI opportunities in India as we examine the possibilities for AI innovation, growth, and economic influence there.
- India's IT services companies can create the greatest office automation and BPO AI apps in the world by utilizing their back-office and BPO knowledge.
This would enable India to expand its low-cost services sector and create a higher-margin goods industry.
- Data tagging and cleansing present a significant business possibility shortly.
Massive datasets containing data cleansing and tagging may present opportunities for the Indian BPO sector.
This data will eventually be utilized to train and correct AI.
This opportunity may be made possible by inexpensive skilled IT labor.
(Note: As we discuss in the "risks" section below, we think that depending only on this approach for AI-related work could be detrimental in the long run.)
- We are bringing IT education up to speed with those of China and the USA.
There should be no "gap" in IT education between India and other countries, and the internet could make sure that the country's burgeoning youth population is exposed to the most cutting-edge AI techniques.
Access to a youthful, highly qualified workforce in data science, with graduates at the forefront of technology, might greatly accelerate innovation.
Risks
Work in call centers, BPO, and low-end services may be automated by AI:
- Although the worry that AI would replace human labor is not exclusive to India, the nation may be especially vulnerable since a significant portion of its GDP is derived from IT services, which entail monotonous labor that is well suited for automation.
- In five years, Indian IT service providers may decide to automate some tasks internally (requiring upskilling of the workforce).
In other instances, western businesses will handle it, saving them from having to contract out work to people in India, which would have resulted in a loss of revenue.
- Automation and the intrusion of foreign tech corporations could be a serious financial blow to India if the tech services sector doesn't adopt AI or if they merely embrace low-end data entry and data labeling work.
The Ministry of IT and the Ministry of Commerce and Industry have both previously undertaken initiatives akin to this, even though the NITI Aayog recently unveiled the National Strategy for AI, which outlines India's AI policy.
It is our sincere desire that India can fully utilize artificial intelligence, both to safeguard the economic health of the country and to promote the welfare of its population.
The adoption of AI in the nation will be determined in the next five years, both in terms of pace and trend.
Conclusion
India has seen an upsurge in readers and job applications related to artificial intelligence (AI). Our research indicates a mixed response to AI adoption, with government programs focused on agriculture and healthcare receiving some adoption initiatives and community programs focused on agriculture and healthcare using it.
India boasts strong strengths such as its large pool of young professionals, innovative culture, engineering know-how and lack of venture capital investment despite past collaboration gaps or language limitations that create challenges to this development.
Strategic proposals center around using AI applications to utilize BPO skills, collaborate and exploit India's strengths.
Opportunities should be provided for data cleansing, personnel upskilling and labeling in the next five years if India hopes to establish itself on the global AI scene and secure wealth and well-being for its people.
