How AI can Redefine the Indian Business Ecosystem

High time for AI to transform the Indian business ecosystem to navigate data

As the world is moving towards Digital Transformation, a massive amount of data is being generated across industries. It's vital for businesses of all sizes to comprehend how to navigate the data to achieve quantifiable results at scale and that's where Artificial Intelligence comes into the picture. In order to keep up with stronger economies like China and the United States, the AI adoption rate in the Indian industrial sector need to be accelerated for deriving significant market share & competitive advantage.

Given the government's rallying cry for Digital India, enterprises – large & medium businesses and government bodies are emphasizing AI-based applications in diverse sectors. Leading businesses and academic institutions have started working to reskill and upskill their talent which will eventually help Indian industries to compete with other global players in the long run. The adoption of AI for businesses enriches the workforce and helps the country's economy to grow progressively, hence it's the need of the hour for Indian enterprises and SMEs to adopt AI for faster decision making and scale bigger with ease.

AI's role in Indian Economy

Being one of the largest economies in the world, India is aiming a major shift in its pace and pattern of business, as AI implementation in indusial sectors for enhanced development is imperative, whilst keeping a focus on the Indian government's aim to become a USD 5 trillion economy in near future.

With patronage from the Indian government, the multidimensional adoption of AI in the Indian economy is growing. The Commerce and Industry Department of the Government of India formed a task force on Artificial Intelligence way back in 2017. As a follow-up in February 2018, the Indian government's policy think-tank NITI Aayog took up the role to spearhead a national program to emphasize AI implementation in research and development. All this can be linked to the government's ambitious project of Atmanirbhar Bharat.

AI use cases in India are witnessing significant growth, several global players are trying to grab a sizeable chunk of the growing Indian AI market. The AI in India is being implemented to enhance the business metrics of different industries by helping them understand the consumers' demands better. Implementation of AI has proven to reduce wastage of resources and ensure quality as well.

According to a study by International Data Corporation (IDC), India's AI market is expected to reach USD 7.8 billion by 2025 growing at a CAGR of 20.2%. The study also claims that the AI software segment would dominate the market and grow from USD 2.8 billion in 2020 at a CAGR of 18.1% by the end of 2025.

Why AI-driven mindset and culture is required?

The key reason why Indian companies don't pay much attention to R&D is the cost of implementation, and of course, the lack of an innovation ecosystem, Inadequate government incentives, apprehension about adopting new technologies, job security concerns are factors that restrict Indian businesses from implementing AI in their ecosystems. However, the situations are changing fast and for good.

To become competitive and take edge over their global peers, the Indian companies are required to ensure they're extracting the best out of AI adoption. Irrespective of sizes, Indian companies need to understand that AI is meant for better decision making and this will eventually help them in improving their business.

Meshing business processes for better AI implementation

Companies should integrate AI into their business & operational procedures accordingly. They should come forward and provide the right business objectives and priorities to the AI engines and solution providers to get the best decisions from the data scientists. It's a tedious task for solution providers to gather the right data from their business stakeholders. Hence, the companies implementing AI should have foresight about how effectively they can use AI to meet their customer expectations.

The awareness building, easy and transparent government regulations can assist in overcoming these challenges. Building the right infrastructure, proper awareness about AI will help the stakeholders to understand their data blind spots and shortcomings. Overcoming these challenges can ensure the potential of AI can be utilized much faster and the results will certainly transform the face of the Indian economy.

AI creating multi-dynamic opportunities in the Indian business ecosystem

AI has been creating multi-dynamic opportunities in the Indian business ecosystem through its value addition to businesses and ease in the implementation process. The manufacturing sector is one of the key contributors to the country's GDP with a 17.4% contribution to the overall GDP in the last fiscal. Even when India's economy was ailing due to the global meltdown and the first wave of COVID -19 pandemic, the manufacturing sector was one of the domains that helped the country's economy to turn around and show significant growth. Many small/medium scale enterprises and SMEs played a key role in the turnaround story.

Interestingly, even after technological advancements, several SMEs face several operational challenges. In short, the Indian SME sector woes are deep-rooted with potential business challenges. With lower rank in ease of doing business and high cost of doing business in India, many SMEs face tough situations when they compete with global peers. I firmly believe AI can play a crucial role in helping Indian SMEs to overcome operational challenges and grow substantially with a higher success rate.

Wondering how? Take the example of the Indian auto industry. It is one of the major business ecosystems and contributes a significant chunk to the country's GDP. From supply chain to OEM manufacturing, from dealerships to after-sales service – it's a huge and very complex business ecosystem. The major auto parts manufacturers in India have been implementing AI across different operations such as supply chain management, shop floor activities, etc. to achieve faster success.

For OEMs as well, AI is playing a vital role in minimizing man-hours and saving costs. For instance, let's walk through the manual approach scenario of the car designing and development process. It takes a considerable amount of man-hours effort to develop a single model that requires absolute precision, multidimensional trial, and error method in place before creating an actual prototype. Thus, car designers must comprehend crucial factors such as dimensions, aesthetics, automotive aerodynamics, engine, and fuel efficiency to achieve flawless results.

Hence, designing a car manually can take thousands of hours, discussions, and changes in the first attempt. As a next step forward to advancement, OEMs and their suppliers are implementing AI and Deep Tech solutions vigorously to significantly reduce the time and cost of the development process. While this was just an example, such implementation of AI can be found across various other industrial sectors to bring efficiency in time and cost management, error reduction, faster and smarter decision making, business metrics change, and top-line augmentation.

To simply put, AI has become a game-changer for businesses of all sizes and different sectors in India to scale up outcomes. AI is not only reducing the cost of operations and bringing operational efficiency, but it is also filling the potential gaps in workflow and helping businesses to increase productivity and profitability at a pace.

Author:

Manas Agrawal, Co-Founder and Chief Executive Officer at Affine