Adoption of artificial intelligence or AI could add up to 1.4 percentage points annually to India’s real GDP growth, a study by the Indian Institute of Management Ahmedabad (IIM-A) and Boston Consulting Group (BCG) said on Wednesday.
The IIMA-BCG joint study report, titled “AI in India – A Strategic Necessity” on the AI readiness levels of Indian businesses, was released at IIMA campus by the premiere management institute’s director Bharat Bhasker. “AI will have a transformative impact on economies, societies and civilisation at large. In India alone, successful adoption of AI could add up to 1.4 percentage points annually to real GDP growth,” said the report.
It further said successful adoption of AI is expected to add Rs 1.5 to 2.5 trillion in incremental pre-tax profit over a five year period for the top 500 Indian companies alone. Pointing out the need for a massive managerial upskilling for AI adoption, the study also estimates that just the top 500 Indian companies would require at least one million hours of training. “Companies cannot assume that benefits of AI will accrue to them in due course. Companies have a choice to prioritise AI and adopt it or perish,” the report mentioned, adding that 2 out of 3 Indian companies are “laggards” in terms of AI adoption and maturity. As per the report, India only has around 4.5 per cent of the world’s AI professionals, and the talent crunch will get more acute.
“76 per cent of India’s data talent is currently hired by the IT services industry. However, companies are struggling to find AI talent with the requisite business and sector understanding. As a result, direct hire of AI talent remains low despite high demand,” it said. “Further, just the top 500 corporates (listed corporates by revenue) would need at least 25,000 to 30,000 advanced practitioners of AIML (Artificial Intelligence Markup Language) in the next 3 to 5 years. To handle AI driven transformations, the existing senior and middle level managers of these 500 companies would require a minimum of a million hours of training,” said the study.
Bhasker said, “India is poised to enter into a digital revolution where successful AI adoption by our industry can be a crucial determinant of India’s competitiveness globally. Indian industry and our companies can leverage the widespread internet access and cost-effective labour to move ahead and align themselves to the global AI maturity standards.” The report emphasises the significance of achieving an advanced level of AI maturity for success in today’s business landscape, said a release by IIM-A.