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Sudhir Gupta

Sudhir has extensive professional experience of over 40 years. He completed his Electrical Engineering degree from MS University Baroda and started his career as at the Bhabha Atomic Research Centre. He then moved to industry and has held senior positions in leading organizations like DCM Data Systems, Uptron, Honeywell and Airtel. Subsequently he was Director Software Development Engineering at Comverse. Currently he is supporting social sector organizations and startups.

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Artificial Intelligence, the Fourth Industrial Revolution and What It Means for India

History shows that every technological wave leads to a churning of the job market. India could not take advantage of the first two industrial revolutions due to British subjugation.

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It is well recognized that there have been three industrial revolutions till now. The first was lead by the steam engine, the second by electricity and the third by IT. We are now on the brink of the fourth industrial revolution which will be lead by Artificial Intelligence (AI). Like all the previous industrial revolutions this one also has a bright side and a dark side. It presents both opportunities and threats. Old jobs will be lost but new ones will be created. New wealth will be created but inequality may be exacerbated. There will be a few winners but there may be many losers. Every person, company, institution, nation and humanity as a whole has to decide how to deal with it. But one thing is clear.

Burying our head in the sand like the proverbial ostrich is not an option. We have to confront the issue. So what are the implications and what are the options. Please see the views of Klaus Schwab, Chairman of World Economic Forum on this topic.

But what does all this mean for India. World bank President Jim Young Kim recently said that upto 69% jobs are under threat in India from automation. History shows that every technological wave leads to a churning of the job market. India could not take advantage of the first two industrial revolutions due to British subjugation. Please see Ravi Venkateshan's post on this this. We did of course benefit from the third one, but it is now time to think seriously about the fourth round. We need to overcome the threats and take advantage of the opportunities A recent report by Accenture 'Why AI is the future of growth' provides an interesting framework to think about the issues and the way forward. Here are some salient points summarized from the report.

– Traditionally three main factors of production are recognized as Capital, Labor and total factor productivity ( TFP). TFP captures the growth that comes from technological innovation. Or in other words TFP accounts for the efficiency of labor and capital deployment.
– TFP has grown by leaps and bounds as a result of the three industrial revolution till now. However there is a fundamental difference when we talk of the AI led fourth industrial revolution.
– Should AI investments be regarded as capital or as labor. AI has hybrid characteristics. It could be a virtual workforce like a robot or a software agent. Or it could be augmenting human productivity like a machine. Also AI unlike a normal machine which depreciates, may actually appreciate due to self learning capability.
– Based on these reasons, the Accenture study prefers to treat AI as a fourth factor of production, distinct from capital, labor and TFP.
– The study has modeled the impact on growth rates in different countries. The projected growth rate is expected to be impacted by the countries ability to absorb new technology and diffuse it in the wider economic infrastructure. The highest impact on growth rate is seen in the case of USA out of the six countries studied.

How can we use the Accenture study framework to draw some recommendations for India. The study points to a high score on the 'National Absorptive Capacity' which is predicated on the following.

– Overall business environment
– Talent availability and research infrastructure
– Culture of absorbing new technologies
– Innovation ecosystem

Our IT industry does provide a strong base and we are trying to improve many things, but a lot still needs to be done. On the flip side it can be said that our IT biggies like TCS, WIPRO and Infosys have all developed AI platform offerings and the startup community has thrown its weight solidly behind AI technology. But we do need a national strategy. As Ravi Venkateshan says, the topic needs to enter the national discourse with a sense of urgency.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


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artificial intelligence Automation iot

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