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Everyone knows that the era of Artificial intelligence has arrived. Recent rapid advancements in AI has created ardent interest all over the world. Basically what is AI? The father of artificial intelligence John McCarthy has defined AI as ” the science and engineering of making intelligent machines especially intelligent computer programs”. AI  develops machines with humanlike intelligence i.e. process information and producing output  in a manner similar to how humans  behave, comprehend  and solve problems.

AI creates this possibility to develop such machine and adapt accordingly . Let us take an example of visiting a website more than once, fed with user’s online data behavior ,a network of AI algorithms  will work  in the background  processes , makes intelligent guess, and displays advertisement that can retain the user’s attention. Thus AI, is the technology that will allow businesses to be informed about client’s needs  even before they want it. This is a great achievement which can improve productivity by copious amount and merits the need of its mention these days.

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Importance of AI cannot be ignored as we see it helping us in our day-to-day activities from being voice activated assistants in tablets, smartphones and computer’s  (like Amazon’s Alexa) that follows user’s voice command to complete assigned tasks to using highly sophisticated tech tools like Google’s AlphaGo, IBM Watson  and Arria NLG(natural language generator) that acts as an analyst and writer in one, crunching millions of data points per second , processing and analyzing it so as to generate easy to read reports much faster than human brain thereby allowing user’s to focus on high value tasks. These are just the tips of iceberg we see showing how artificial intelligence helps us ,business and society at large. According to various studies and researches new AI technologies will fuel global economic growth as productivity and consumption increases in the near future. The future looks bright with AI just scratching the surface from developing efficient power transformers, smarter developed supply chains, fully automatic transportation systems to solving  world problems of health and  food shortage. AI has unparelled potential and is expected in the coming times to help improve and perform tasks more efficiently and accurately ,to save society’s cost, money and time,  to enable huge production and labour productivity, to deliver uninterrupted services to individuals in the country and  to overall optimize the resources available to the generation so as to help in the overall economic development and transformation of economy to  better serve social, economic needs.

Is Artificial Intelligence the way to boost economic growth?

Artificial Intelligence has the potential to impel and enhance economic growth. The combination of man and machine can be used to solve the economies difficult problems. As global tech major Accenture already calls artificial intelligence as another new and tremendously important factor of production both for now and future one can simply infer that AI will help in labour and capital productivity as these are major investment factors of production which can help in introducing, developing and boosting new sources of growth. Hence AI helps in expanding role of people, entrepreneurs, government, organizations crediting them to experiment and innovate and devise various means to propel growth in business and economy as a whole. It explains three ways that can increase India’s economic growth through artificial intelligence can be by organizing intelligent automation and augmenting and automating complex mundane human  tasks that can be taken over by AI ,empowering current workforces with new skills, knowledge to cope and help in advancement of AI, and to build and  enhance AI innovation that can be used for structural economic transformation which can hence result in development of Indian economy.

Mark Purdy who is the Managing Director and Chief Economist of  Accenture Research has emphasized on the importance of AI and how “AI can have a pervasive impact on business profits because it affects nearly every part of the organisation  from production, to sales, to innovation.” The idea is by taking up routine work by AI , the employees can focus their concentration on doing  high value work.

It was the research conducted by Accenture and Frontier economics which estimated economic impact of Artificial intelligence on various important economies of the world using  2035 as the target year to absorb new technology impact, segregating the study into two outlines- one was the baseline scenario that gave annual estimated economic growth rate  for future  under current assumptions and the other was AI scenario which showed expected economic growth once AI effect has been added to the economy. The results were published in report “Rewire for Growth” and most important ones are explained below.

                                           

                                                         Figure 1: Economic impact of AI on various economies

                                                                      Source: Rewire for growth report, 2017

Here, figure 1 clearly shows real gross value of major economies of the world have a higher growth if AI is taken into consideration in the economy with India and China benefitting the most than excluding it as seen in the case of baseline.                                                            Examining the Case of India further, figure 2 explains how With AI absorbed in the economy  India’s GVA will accelerate the economic growth by 957 billion US dollars, adding 1.3 percent per year to its growth thereby raising national income by 15 percent in 2035.The size of Indian economy in 2035 is estimated to be 6,397 billion US dollars if we don’t take AI. However, including artificial intelligence as a factor it is expected to raise India’s size to 7.355 billion US dollar. The figure also shows if AI  is categorized into Intelligent automation, augmentation and total factor productivity what would be their individual contribution towards India’s economic growth.

 

 

                                               

                                                          Figure 2: Indian economy Gross Value added in 2035 by AI.

                                                             Source: Rewire for Growth,Accenture,2017.

Indian government to provide social welfare (currently Indian Railwaya and  RailTech  is working with ISRO to build safety mechanisms, using AI and machine learning to make  train travel  safer ) and Indian firms to transform their businesses  in various sectors  like health, education, finance, automobile  and retail are increasingly harnessing AI. .One example is Manipal Hospitals, Bengaluru,    that shows how AI is increasingly being tapped in healthcare by  providing  better diagnostics  and  improving patient experience with AI-powered digital intelligence solutions that are using IBM Watson for Oncology, a cognitive-computing development  platform, to help doctors  identify personalized cancer care options across the country.Looking at global trends, large businesses and digital platform and will play a key role in innovating and unlocking the economic value of AI. Realising AI’s potential There is a need to set up clear national based AI development  plan for India’s  economy similar to what other countries are doing, educate people about AI and its growing importance and enhance research in this area.

One important step in the right direction has been shown by Nirmala Sitharaman  the then Commerce  Minister who set up an 18 member  Artificial Intelligence Task Force last year in August  to accelerate  and enable economic  agenda of development using artificial intelligence  in the fields of  national security, IT and hardware, retail, customer engagement, education, fintech, healthcare, agriculture, develop deeper expertise and provide tech-enabled utility facilities to citizens.

Hence, there is a need to make most of this AI  opportunity. AI will  benefit the mankind and expand  people’s potential.  Government,policy makers , business leaders,organization and institution must be united to work towards the AI revolution .This will only help in accelerating our economic oppurtunities  in the coming years.

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