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AI adoption to add $500 bn to India's GDP by 2025: Nasscom

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New Delhi, June 23 The adoption of artificial intelligence (AI) and data utilisation strategy can add $500 billion to India's GDP by 2025, a new Nasscom report showed on Thursday. The AI adoption in four key sectors -- BFSI, consumer packaged goods (CPG) and retail, healthcare, and industrials/automotive -- can contribute 60 per cent of the total $ 500 billion opportunity, according to "AI Adoption Index" Nasscom, EY and Microsoft, EXL and Capgemini. Though the current rate of AI investments in India is growing at a compound annual growth rate (CAGR) of 30.8 per cent and poised to reach $881 million by 2023, it will still represent just 2.5 per cent of the total global AI investments of $340 billion. This creates a massive opportunity for Indian enterprises to accelerate investments and adoption of AI to drive equitable growth across sectors. For India to achieve its $1 trillion GDP goal by FY 2026-2027, it needs to have a strong correlation to the maturity of AI adoption, the report noted.


The rise of the AI economy

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The pandemic has taught us many lessons and opened our minds to new ways of doing things, including understanding the potential of technologies such as artificial intelligence (AI) and machine learning (ML). AI/ML models and algorithms have supplemented the work of healthcare professionals, medical researchers, public health authorities and local administrations in monitoring and predicting trends. Lockdowns have led to a boom in Internet consumption. According to the Department of Telecommunications, Internet consumption in India rose by 13% after the lockdown was announced. Higher consumption has generated goldmines of user data that online businesses can harness.


View: How to follow through strAIght - ET Telecom

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By Debjani Ghosh According to the August 2020 National Association of Software and Service Companies (Nasscom)- McKinsey report, 'Unlocking Value From Data and AI: The India Opportunity', artificial intelligence (AI) deployments, if done right, could add about ₹500 billion to India's GDP in the next five years. Nearly 45% of this value is expected to be driven by the consumer and retail, agriculture, and banking and insurance sectors. Execution will be the key imperative for success. What is needed is an India AI playbook that can help GoI not just build deployment plans but also figure out how to scale them for maximum impact. Such a playbook requires strategy, data, talent, technology, policy framework, execution and the right culture to come together. India unveiled its AI strategy in 2018.


The Growth and Evolution of India's Software Industry

Communications of the ACM

The development of the Indian software industry is an archetype of how economic liberalization combined with an entrepreneurial spirit can build an industry that today contributes as much as 8% to the GDP of a fast-growing country like India. On the back of thousands of IT services companies that were built over the last three decades, the industry has generated US$177 billion in revenue and more than US$135 billion in exports in FY 2018–2019 alone. The IT industry has also created over four million direct jobs and 12 million indirect jobs in India. A testament to this growth is the fact that the largest Indian IT services company is currently valued at over US$100 billion and generates over US$20 billion in revenue. Over the years, the Indian software industry has matured from providing cost-effective back office support to driving the digital transformation agenda ahead in global companies. Increasingly, leaders of more than a thousand global enterprises across the U.S., Europe, and other locations have realized India's potential and have set up their own IT or R&D centers to take advantage of the vibrant Indian software ecosystem.


60% of enterprises believe AI will disrupt their business in 2-3 years: Nasscom/EY

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Pune: Sixty percent of Indian enterprises believe that Artificial Intelligence (AI) will disrupt their business in the next two-three years, according to a study by industry body Nasscom and consultancy EY. The study, 'Can enterprise intelligence be created artificially? A survey of Indian enterprises,' is based on a survey of over 500 CXOs across sectors like retail, BFSI, healthcare and agriculture on the maturity of AI adoption along with the key challenges faced on their AI enterprise journey. Seventy percent of Indian enterprises that deployed AI have achieved measurable results. Implementing AI will not only catalyse the innovation to stay competitive but also generate long-term value for enterprises," said Debjani Ghosh, President, Nasscom. Operational efficiency, customer experience and revenue growth are the main reasons why enterprises are turning to AI, with BFSI firms (36%) leading the way, followed by retail (25%), healthcare (20%) and agriculture (8%). "Some of the biggest impediments to the adoption of AI include the quality of data available, the level of digitisation at the enterprise and the maturity of the partner network," said Nitin Bhatt, Partner and Technology Sector Leader, EY India. Ensuring trust through explainability, accountability and ethical use are also major concerns for wider AI adoption. People and cultural issues were other big challenges, with 40% citing workforce displacement and 32% citing cultural impediments to AI adoption. However, among the firms that had gone ahead with AI adoption, 19% said workforce displacement was a challenge while 55% cited cultural factors. "Explainability is an important factor.