India needs to get into the global AI game – here’s how (and why)

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Artificial intelligence has become a hot new buzzword, although the concept has existed in theory for more than seven decades. But AI came into the limelight only recently when bots developed by DeepMind Technologies and Open AI beat the reigning human world champions in complex games like Go and Dota 2.

The IT sector has done for India what no other industry has ever achieved – bringing the country to the world stage and proving the prowess of Indian brains. We owe it to our IT behemoths of today that started early and realized the potential of software and the ITES industry, thereby making it a $135 billion export industry. Software and hardware engineering courses were the new fad in the late 20th century, so the credit also goes to the burgeoning middle class whose focus on quality education made India one of the biggest exporters of skilled professionals. This apparently was the first Indian IT revolution, wherein the participation from government, corporations and the ever aspiring middle class teamed up and made India literally the technical support capital of the world.

Then came 2007, bringing with it global financial crises that led to the demise of Lehman Brothers and eventually the collapse of the global equity markets. The developed world was struggling with recession – America, the EU and Japan resorted to quantitative easing, and the corporate world was focused on achieving economies of scale and cost-cutting, as there was no visibility of growth.

As the saying goes, “Necessity is the mother of invention.” Lack of global growth gave rise to job cuts and a shift in focus to more efficient technologies – robots and computers started taking over entry level human jobs, bringing the entire world’s focus onto technologies like artificial intelligence, machine learning, robotics, IoT, big data etc.

Today, we live in a new world where these technologies will define our future. And the question is: where does India stands vis-a-vis this new world?

In terms of AI, according to CB Insights, in 2017 $15.2 billion was invested in AI startups globally – 48% of that total went to China, and 38% went to America. There is no Indian startup on the list of top 100 AI focused ventures.

America had the first-mover advantage, but lately China too has understood the importance of AI and is heavily investing in technologies with a particular focus on face recognition and AI chipsets. Chinese technology giants Baidu, Alibaba and Tencent (collectively known as BAT) have partnered with the government along with iFlyTek to form an ‘artificial intelligence national team. With a clear roadmap, China plans to dominate the AI world by 2030, aiming to make it a $150 billion industry.

With a compounded rate of 6%, India’s software exports will touch $150 billion by 2020. It’s time to focus on the next $150 billion opportunity – artificial intelligence technology.

At the current pace, it seems like a farfetched idea. Like China, both the Indian government and corporate world need to come together, invest heavily in R&D and promote a startup culture where the entrepreneurs and employees do not have to think about bottom lines. No business is started with a goal to fail, but the possibility of failure is a hard fact for startup life that must be accepted. Both success and failure need to be equally respected.

As another more recent saying goes, “data is the new oil.” And with 300 million smartphone users, India is well positioned to leverage on her demographic dividend. There is also an urgent need for Indian corporations to invest in new technologies and promote startups. As of 2017, there are 19 Indian companies with a bottom line of more than $1 billion, keeping aside the three IT companies that are heavily investing in technology. If the rest of them invest $10 million each in AI-focused startups, we will see inflows of almost $160 million to this industry. It will indeed be a very encouraging sign for the new breed of engineers to improve their AI skillsets and contribute towards India’s second IT revolution.

The abundance of our intellectual capital more than makes up for India’s lack of key natural resources. With such brilliant minds, we may be the first ones to pass the gold standard of AI technology – the Turing test.

Written by Vikram Singh, a senior banker currently working as an account director with L&T Finance. His areas of focus include artificial intelligence and FinTech.

This article was originally posted on LinkedIn

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