Artificial intelligence (AI) in India may have had a slow start but it is now gaining speed. Over the past couple of years, a growing number of Indian tech start-ups and MNCs have begun incorporating AI in some form or the other. In fact, a study by Analytics India reports that almost 800 companies in India claim to use AI. Most of these companies belong to the banking or e-commerce sectors and offer AI-based products/services to traditional enterprises looking for digital transformation or smart online shopping portals.
However, from a global perspective, this is still an incredibly small number. In fact, India accounts for a mere 6% of the total number of AI companies around the world. This figure suggests that AI technology in India presents an opportunity for its applications to have tremendous reach and scale. Over the past couple of years, various start-ups specialising in different services and products based on AI (from automation to chatbots) have emerged. As investment in India’s AI sector increases, I believe that more innovation will follow from which, we will be able to uncover what AI truly has to offer.
Additionally, we should also look at the opportunities for AI in already existing sectors. The reality is that every field of profession has opened avenues for AI to integrate with human lives to improve it. AI can be and is being applied in areas such as healthcare, e-commerce, Fintech, Banking and Edtech. For example, in a country like India, where there is no dearth of health problems but on the contrary the facilities to address them. Data and algorithms can be effectively harnessed to turn reactive healthcare into preventive healthcare. In e-commerce, AI is being used to personalise offers to customers that they would more likely be interested in. Implementing AI solutions in business, via integrating it in supply chain management and through predictive analysis can increase efficiency and bring down costs for companies.
The lack of talent, availability of data, high cost of implementation, privacy and confidentiality, AI governance and developing trust amongst users are some of the key challenges that are holding back businesses from capitalising on AI in India.
According to PwC’s 20th CEO Survey, 56% of CEOs in India opined that the availability of key skills in the country is a concern for the growth prospects of organizations. Organizations are finding it difficult to recruit people not only with technical and problem-solving skills, but with necessary behavioural and leadership traits. There is a gap between aspiration and execution. Even with all the potential advantages of artificial intelligence, individuals still have concerns in regards to information protection and are hesitant to share personal information in lieu of better interactions and experiences.
Hence, when compared to the rest of the world, India is not exactly a hub for all things AI. It ranks third (behind US and China) in the total number of AI startups.
And that is not all, we are also playing catch-up with countries like China, Singapore, Japan, Canada, Germany and the US on so many levels other than the number of AI startups, like sufficient infrastructure and education, the scale of R&D and the number of research papers published, investments and even policies.
According to the MIT Technology Review, Indian researchers contributed only one-fifteenth of the US contribution and one-eighth of China’s research material for top AI conferences around the world between 2015 and 2017.
But the silver lining is that India is just waking up to a world of AI. The current ruling government is pushing for increased AI innovation. In 2018, the Indian government published two national roadmaps defining the adoption, research and development of AI – the Report of Task Force on Artificial Intelligence by the AI Task Force constituted by the Ministry of Commerce and Industry and the National Strategy for Artificial Intelligence by NITI Aayog.
The first report proposes an AI policy with a five-year mission that includes a targeted investment corpus of INR 1200 Cr ($184 M), that would be used for different initiatives under various government departments. The report also emphasises on the need to build and sustain a healthy AI ecosystem, which would allow researchers, entrepreneurs and manufactures to freely share information and innovation. The second report by NITI Aayog proposes heavy investment in the Indian startup community, especially enterprises offering AI as a service. Also, a national programme aimed at facilitating research and development of new applications of the AI technology is in the works.
If India can realise this vision, then there is a chance that it can become a leader in the global AI scene. Although most other countries have already announced their national policies and strategies of AI innovation a few years earlier, this is the first step in making India on par with the rest of the world in terms of this industry.
A recent study also states that India is expected to gain a whopping $3.14 trillion by 2030 by the adoption of Artificial Intelligence (AI).
AI-related professions are on the rise in India as companies are working to implement new and state-of-the-art technology into their management and operations. This has led to an increase in job opportunities for IT-skilled professionals. According to the predictions of Ernst & Young and Nasscom, by 2022 around 46% of the workforce will be engaged in entirely new jobs that do not exist today or will be deployed in jobs that have radically-changed skill sets.
In fact, Artificial Intelligence was among those domains which witnessed the fastest adoption among industry sectors in the last five years. Start-ups witnessed 108% growth in funding in India in 2018 alone, according to a report published in October 2018 in The Economic Times. Currently, there are about 400 start-ups working on AI and machine learning domains. About $150 million dollars has been invested in India’s AI sector by private players alone and the number has been growing since 2016.
In a March-June 2017, a Capgemini survey of nearly 1,000 companies in India with revenue of over $500 million, found that around 58 percent have gone beyond pilot and test projects and are adopting the technology at a larger scale.
There are several start-ups, based in cities such as Bengaluru, New Delhi, Mumbai, Chennai and Hyderabad that work on artificial intelligence principles to serve consumers better. Their products and offerings range from multilingual chat bots to online shopping assistance and automated consumer data analysis. These companies have been working in areas such as e-commerce, healthcare, edtech, fintech etc. Though in their nascent stage, the performance of these companies have thus far been promising.
But then the question remains that how is growth in the AI sector tracked? As the sector in India is in its developing stage, it is difficult to gain a comprehensive view of its growth and progress. While this can be discerned by looking at the increase in investment and funding in the sector or the number of AI-based companies or companies using AI and their respective revenues, one can also gauge the increased interest in the AI sector and thus its growth potential from employment statistics. According to a data from job website Indeed, there has been a 179% increase in the number of searches by job seekers for AI-related jobs in India between June 2016 and June 2018. AI skills are among the fastest-growing skills on LinkedIn — a 190% increase from 2015 to 2017.
Such findings point to an obvious growth in the sector in India, at least in the short-term. If one looks at the current state-of-affairs in the Indian startup scene, there really is no defined “AI industry” in India. What exists is a small “AI niche” in every industry. It’s this growing niche that the entrepreneurs are making the most of. Most start-ups pick up a certain pain-point or a set of pain-points from an industry, and then build an AI-based product or solution addressing those issues. This business model is called AIaaS – AI as a service!
However, the AI sector may face significant challenges and hindrances to its growth in the long-term due to the low quality of higher education and training in AI skills and brain-drain from the best institutions. The 2018 India Skills Report found that only 10-40 percent of engineering graduates are employable. Since the start of 2018, employer demand for AI skills has been consistently twice the supply of job seeker. To make matters worse, there is a shortage of qualified faculty to teach AI courses in India that would solve the problem of low employability. There is also lack of research in AI by public and private institutions in India. Indian academics produce significantly fewer research papers than academics in other countries such as China, the UK and the USA. Without qualified AI-trained talent and the resultant lack of ongoing research in the field, there is a threat of the growth in the AI sector, reaching stagnation.
Thus, if one has to address the influence of AI-based entrepreneurship in India, I believe that right now it’s too early to determine any overall significant change. The AI industry in India is still at a premature stage, even though it is growing by leaps and bounds every day. However, seeing the progress that is being made, there is no doubt that the industry is headed towards tremendous transformation. The budding startups that have taken over the AI scene look promising. And there are endless possibilities yet to be explored.
That being said, the one change that is noticeable is the mindset of the industries looking for AI solutions: traditional enterprises like banks and hotels have realized that existing business models are being run aground. A couple of years ago they would have been hesitant to let a machine undertake a task which a human could have completed. However, that is not the case any longer. Enterprises today are more open to the idea of using AI to solve business challenges.