New Delhi: The top 500 companies in India will have to train and upskill their mid-and-senior-level management staff for one million hours if they want to teach them how to leverage artificial intelligence (AI) to further their profits, a new study has found.
A report by the Brij Disa Centre for Data Science and Artificial Intelligence (CDSA) at the Indian Institute of Management Ahmedabad (IIM-A) and Boston Consulting Group, has found that three of four Indian businesses still do not know how to leverage AI technology to drive profits and are lagging behind in this regard. The good news is that the pandemic years have given a push to digital technology, resulting in companies showing an improvement in the AI maturity index.
The report, titled ‘AI In India — A strategic necessity’ and released Wednesday evening, added that successful adoption of AI is likely to add Rs 1.5-2.5 trillion in incremental pre-tax profit over a five-year period for these companies.
The findings in the report are based on the study of 130 companies — across banking, financial services and insurance (BFSI), consumer goods (CG), and industrial goods (IG) sectors — along with extensive interviews and surveys where respondents were chief experience officer (CXO) of large-sized, medium, and small organisations.
The study objectively measured the ability of a company to leverage AI to drive its strategic objectives and enhance its financial and operational performance.
The report also highlighted the existing demand-supply gap in the AI industry.
“Just the top 500 Indian companies would need at least 25,000 to 30,000 advanced practitioners of AIML (artificial intelligence machine learning) in the next 3-5 years… A NASSCOM [National Association of Software and Service Companies] report also projects that the demand-supply gap for digital technology talent will grow 3.5x + by 2026 to 1.4-1.8 million. The current study estimates that core AI talent data scientist, data engineer, enterprise architect would be 15% to 20% of the headline number,” the report said.
According to the report, the global AI market reached an estimated US$450 billion in 2022, growing at an annual rate of more than 20 per cent. In India, AI expenditure reached US$665 million in 2018 and is expected to reach US$11.78 billion by 2025.
Releasing the report Wednesday, IIM-A director Bharat 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. Successful adoption of AI could add up to 1.4 percentage points annually to real GDP [gross domestic product] growth of India.”
Bhasker added: “From the perspective of corporations, successful adoption of AI is expected to add over a five-year period, INR 1.5-2.5 trillion in incremental pre-tax profit for the top 500 Indian companies alone. This presents an incredible opportunity for the 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.
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The findings
The study found that AI maturity among Indian companies has been steadily improving and the pandemic has made companies further push for digital technologies.
Ten percent of the companies surveyed were labelled ‘leaders’, which meant they were able to successfully leverage AI to increase their outputs and were AI mature. While 23 percent of the companies were found to be ‘leapfroggers’ — yet to successfully implement AI systems — 67 percent were tagged ‘laggards’, which meant their adoption of AI was found to be trivial.
The study suggested that when it comes to key contributors to profit-boost through AI adoption, algorithms drive approximately 10 percent of it, while data and technology infrastructure adds a further 20 percent. The remaining 70 percent hinges on people, processes and business transformation.
Over the pandemic years, the study found, the AI maturity gap between leaders and leapfroggers narrowed, with the latter poised to give competition to leaders in the coming years.
An industry-wise analysis of the companies — consumer goods industry, industrial goods industry and the banking, financial services and insurance industry (BFSI) — was also conducted to see which fared better on the AI adoption parameter.
While the BFSI was found to be at an improved stage of AI maturity and could compete with global standards, the industrial goods and consumer goods industries fared poorly on the matrix.
The study found 75 percent of industrial goods and 75 percent of consumer goods industries were laggards and lacked AI maturity.
(Edited by Poulomi Banerjee)
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