A new report by Ernst & Young (EY) reveals that generative artificial intelligence (AI) could potentially contribute a staggering $1.5 trillion to India’s economy by 2030. The report underscores the transformative impact of generative AI on Indian enterprises and highlights both its advantages and associated risks. To navigate the era of “Digital Darwinism,” the report suggests that widespread adoption of generative AI is crucial for Indian businesses.
Boosting efficiency and productivity across industries
The EY report identifies several key sectors where generative AI is expected to bring about significant improvements in efficiency and productivity. These sectors include financial services, logistics, healthcare, retail, transportation, and education. According to EY, the primary benefits of generative AI will manifest in the form of personalized customer experiences, enhanced employee productivity, and streamlined operations.
Potential benefits and risks
While generative AI promises substantial opportunities across industries, the EY report also cautions enterprises about the potential risks associated with this emerging technology. Data privacy concerns are cited as a major worry for companies looking to integrate generative AI into their existing processes, as mishandling data could lead to both reputational and financial losses.
Executives acknowledge the impact of generative AI
A significant portion of C-suite executives surveyed in the report recognize the potential economic growth that could result from incorporating generative AI into their business operations. Over 56% of respondents believe that generative AI will have a significant impact on their operations, with a particular focus on customer experience enhancement.
Preferred methods of integration
The report also delves into the strategies that companies are considering to integrate AI into their systems. Approximately 75% of executives prefer forming partnerships with external technology providers as their preferred method of AI integration. However, some argue that building in-house AI capabilities, pursuing acquisitions, and forging strategic alliances could also yield positive results in achieving generative AI integration.
While there is consensus on the potential benefits of generative AI, challenges remain. The report highlights skill gaps and unclear use cases as the primary stumbling blocks hindering seamless integration. Some respondents also point to a perceived lack of government focus on AI initiatives as a barrier to progress.
Government’s role in guiding AI adoption
To ensure a coordinated and effective approach to AI adoption, EY’s report calls on the government to take the lead, emphasizing a “light-touch” approach to regulation. The government is urged to treat generative AI systems as public goods, similar to its Unified Payments Interface (UPI) offering. The report recommends that the government provide access to talent and allocate public funding for research and development. Furthermore, it suggests the establishment of regulatory sandboxes to foster AI innovation.
India’s potential to compete globally
As India continues to embrace emerging technologies, the government’s support for generative AI initiatives could position the country as a global leader in the field. With government-backed AI programs and a focus on blockchain technology, India is on a trajectory to achieve massive growth within its local ecosystem, potentially rivaling the likes of the United States and Europe in the AI arena.
The EY report underscores the transformative potential of generative AI in driving economic growth in India. While risks and challenges exist, the government’s proactive role in guiding AI adoption could pave the way for India to become a global powerhouse in the AI industry, bolstering the nation’s economic prospects in the years to come.