In its World Economic Outlook Update released recently at the World Economic Forum at Davos, Switzerland, the International Monetary Fund (IMF) said it remains bullish on India’s growth potential. The IMF estimates that the Indian economy will grow by 7.4% in 2018 and 7.8% in 2019, making it the world’s fastest-growing major economy — a ranking it briefly lost in 2017 to China.
But if India has to maintain its growth trajectory in the long term, one key step is to harness the potential of its demographic dividend. Currently, half of India’s population is under the age of 25, and two-thirds is younger than 35. It is estimated that by 2027, India will have the world’s largest workforce of people in the 15 to 64 age group.
However, skill development and employability remain a key challenge. At present, only 18% of the country’s workforce is formally skilled. At the 2018 One Globe Forum held in New Delhi earlier this month, Major Dalbir Singh, chairman of the conference’s organizing committee and senior advisor at the Forum of Federations, Canada, said: “We have always marveled at the idea of the demographic dividend that we seem to enjoy, but we can sustain this advantage only if we manage to train our workforce adequately. Currently, there are huge gaps.” With technologies such as artificial intelligence (AI) and robotics fast changing existing ways of working, this challenge is only going to worsen.
Making AI Accessible
Jagdish Mitra, chief strategy and marketing officer at Indian IT services firm Tech Mahindra, noted during the conference that even in the IT services sector, 55% to 65% of existing jobs are likely to go away because of AI. “[If] we are not paranoid about reskilling and retraining ourselves, we will lose out in a big way,” he said. Software testing is one example: Traditionally, this has been done manually. Testers get into a system and hack the software to assess its vulnerability. Now, this job of finding and fixing the bugs can be done easily by AI.
“It is important to change the narrative to how jobs will be created because of Al.”–Neeraj Bhargava
Mitra noted that most AI tools are difficult to use, and there is an urgent need to “democratize AI.” Pointing to India’s advantage of a large number of engineers, he said: “If AI can be made simple — in a way that even people in small towns and villages can create businesses using AI as they are doing today with the mobile phone — there can be many new opportunities.”
With the objective of making AI accessible to everyone, Tech Mahindra, along with AT&T and the Linux Foundation, has launched a user-centric, open source platform called Acumos. “We want to make this available to universities and colleges and even to school students. The idea is to create a whole library of AI solutions that people can use,” said Mitra.
AI and other advanced technologies are expected to create new industries which will result in “structural changes in the economy,” said Neeraj Bhargava, CEO of Zodius Capital Advisors. In light of this, he suggested, “it is important to change the narrative to how jobs will be created because of Al, and not how they will be lost.” A few decades ago, when the Indian IT services industry was just starting, the question everyone asked was if India had enough computer science graduates, Bhargava recalled. “When the jobs come, the skills will follow,” he said.
Bhargava observed that historically, India’s education system has given more importance to logical thinking and reasoning capabilities, but now, with AI, the new jobs will be more focused on creative thinking. Building on this, Vinay Kumar, director of AI, Azure and search partnerships at Microsoft, added: “We are very bullish about AI. We expect that a lot of the routine, repetitive and mundane work will be taken over by AI, and we believe it will have a massive impact on improving productivity.” Kumar listed education and health care as areas where AI could have a very positive impact, especially for a country like India, which has massive challenges on these fronts. For instance, in education, AI can be used to customize content according to a student’s learning capability. Or, it can be used for assessments and grading, giving the teachers more time to interact with the students on their educational and holistic development.
Driven by Data
Hasan Davulcu, associate professor at Arizona State University, pointed out that while the key value of the industrial age was efficiency and automation, and the main commodity that powered it was oil, the new-age is going to be driven by data. “Even as AI will take away a lot of jobs, the same AI is also empowering brand new technologies like blockchain,” he said. “The key attributes of the new-age are transparency, sharing, crowdsourcing, crowdfunding, distributed and decentralized.”
“The key attributes of the new-age are transparency, sharing, crowdsourcing, crowdfunding, distributed and decentralized.”–Hasan Davulcu
Davulcu emphasized the need to “re-engineer education and media” to train and familiarize people, especially women, the underbanked and the less privileged, in these new technologies so that they can leverage their benefits to the maximum and participate in the new-age economy. Teachers in rural India, for example, are showing the way. They are turning to online fundraising platforms to get resources like projectors and whiteboards for their schools. In the microfinance sector, blockchain can help improve efficiencies and lower transaction costs. By aggregating their data using blockchain, lenders can ensure that individual borrowers are not borrowing excessively from multiple lenders.
Ashwarya Singh, founder of Drivezy, a Bangalore-based peer-to-peer vehicle sharing platform, spoke to conference participants about the profound role that blockchain will play in the new sharing economy. Our ancestors and their communities by necessity had a very high trust factor, and their economies were built on that, he pointed out. As societies grew, that trust factor got lost. “A decentralized blockchain network can bring the trust back. Sharing can create micro-entrepreneurs, and micro-entrepreneurs on blockchain can create a sustainable society,” said Singh, adding that his own company’s growth jumped from 15% month-on-month to 45% after they adopted blockchain technology.
The Rise of Cryptocurrencies
Speakers at the One Globe Forum addressed other critical issues that India will confront in its transformation to a 21st century knowledge economy. Among them: The impact of cryptocurrencies. Kunal Nandwani, co-founder and CEO of blockchain solutions company Hashcove and founder of uTrade Solutions, a trading technology product firm, was very bullish on cryptocurrencies and initial coin offerings (ICO). He said that unlike in traditional companies, ICO’s create communities in which all stakeholders – be they investors, employees or consumers — have the same opportunities and their interests are completely aligned. ICOs, he added, will disrupt the very nature of corporate structure. At the same time, Nandwani cautioned that currently the majority of the ICOs are irrelevant and people need to choose them very carefully. “The really valuable internet companies came only after the dot-com bust. The same will happen with ICOs.”
“Micro-entrepreneurs on blockchain can create a sustainable society.”–Ashwarya Singh
Rohit Kulkarni, country manager of cross-border payments company Payoneer India, felt that the excitement around blockchain and cryptocurrencies is primarily because of the inconvenience of the current banking system, and there is an urgent need for new technology to disrupt the traditional systems. “Of course, there will be risks, but we have to find ways to address them. We have to make it easy for individuals and businesses to trade globally,” said Kulkarni.
In an increasingly digital world, the centralization of data will be a key issue, according to K.S. Prashant, managing director of IDeaS Revenue Solutions India, a revenue management software firm. While there is the danger of centralized data being misused, especially if it is monopolized by a few companies, Prashant noted, if we don’t have centralized data, “we can’t take full advantage of the new technologies.” Everyone, he said, has a role to play in ensuring that data is not misused. “Whatever be the pressure on growth and profitability, the corporates need to ignite their conscience. Governments must not stifle research but at the same time be very watchful. And world bodies must bring in standardization.”
Have you read?
Michael Allen, managing director of advisory firm Beacon Global Strategies, highlighted some steps that corporates need to take in case of a data breach. Companies must be quick to start the process of forensic investigation, and they must notify their customers expeditiously and be forthright with them, he suggested. Also, they must not underplay the significance of the data breach and must not give assurances that they are not sure of. “It is not a question of if there will be a data breach. It’s virtually certain that it will happen,” Allen said. “Companies must have a clear strategy on what to do and what to say.”