Editors note: As India stands at the cusp of a new era in economic growth, it is time to ask a big question: Can a nation of one billion people build a global tech giant as new frontiers of technology arrive? The answer involves understanding global economic dynamics, innovation, ownership, management, competition, regulation, finance and intellectual property rights. Firstpost is publishing a series of stories that will seek to address these issues in a manner that helps entrepreneurs, policymakers and ordinary citizens understand what it takes to reach new highs without losing one's ground in a world where threats are as real as opportunities. Here's the seventh piece in the series.
Information and communication technologies (ICT) act as a key catalyst for economic growth and development. As per various estimates, a 10 percent increase in broadband penetration can result in a 1.4 percent increase in GDP growth in emerging markets.
Around the world, the first phase of technology-led business transformation was enabled by the proliferation of business software and productivity tools, and the skilled workforce provided by the technology services industry. Over the years, advancements in consumer technology such as internet commerce, digital and social media enabled digital driven consumption provided enterprises with a personalised distribution channel and real time feedback on the usage of their product and services.
This intersection of digital technology across producer and consumer markets brought enormous amount of structured and unstructured data into the realm of business operations and helped in the next phase of technology driven transformation, creating insight driven enterprises harnessing the power of data.
In the first two phases, the USA took a leadership position in the technology industry across various domains, and other countries too have built their own niche, such as Germany and Japan on robotics, Israel on cyber security, China on Internet technology and telecom equipment, Taiwan and South Korea on electronics and semiconductors and so on.
In the case of India, our advantages in cost effective scientific and engineering talent helped us build a global technology services industry, but our potential for cost effective R&D and product development, demonstrated very successfully in our defence and space research programs, is still under-leveraged.
As the productivity gains from the first two phases plateau, advancements in frontier technologies such as artificial intelligence (AI), IoT, blockchain, industry 4.0, among others, promise to herald the third phase of technology driven transformation in the global economy, by transforming business models, creating new sources of revenue, optimising resource usage, and maximising stakeholder value. Global technology majors and countries are in a race to create their own niche in this emerging landscape, and we are witnessing early stages of commercialisation of applications such as driver-less vehicles, conversational robots, intelligent automation, among others.
At the same time, years of rapid economic growth and development has created an alarming strain on our natural resources, and the effects of such negative externalities on global warming and climate change portends a calamitous situation, affecting emerging economies more.
It is in this context that the next phase of technology enabled transformation of businesses, industries, and the economy will be assessed, in the coming decades, by its ability to provide solutions for sustainable development.
This is where India has the potential lead. Our strengths in cost effective R&D and product development demonstrated successfully in our defence and space research programs could be effectively leveraged to build localised solutions for domestic problems, which can be exported for global markets. For example, an AI based solution for agriculture to maximise yields using advanced weather forecast models, optimising inputs mix such as seeds, fertilisers etc. will not only be relevant for India, but also for other emerging and advanced economies.
A recent report on AI by a task force set up by the Department of Industrial Promotion and Policy (DIPP) has identified ten specific areas for AI applications in India, in domains such as manufacturing, fintech, health, agriculture, technology for the differently abled, national security, environment, public utility services, retail and education. These are interesting domains where mass digitisation and advanced tools like AI and machine learning could have maximum impact. A few use cases include:
• Agriculture – crop and soil monitoring, optimising inputs mix such as seeds, fertilisers, predictive analytics for weather forecasting, etc. can help in maximising yields
• Healthcare – intelligent diagnostics, predictive models for population health, empowering primary healthcare workers in preventing disease outbreaks.
• Education – intelligent tutoring based on personalized learning modules to improve learning outcomes
• Safety – improving emergency responses, predictive models for forecasting extreme weather events
• Public transportation and mobility – predictive models for traffic congestion by analysing traffic patterns, video / image analytics for traffic violations
As a clear policy direction continues to emerge from such deliberations, India’s industry and the start-up community could start leveraging such frontier technologies for building localised solutions that are globally scalable. India has a vibrant software product ecosystem, and is home to over 300 SaaS startups across domains such as CRM, data management, HR, accounting, healthcare, among others. Indian product companies making inroads at the global level, and are expected to gain a larger share of global IT-as-a-Service market, especially among the small and medium enterprises. With the right investments and a supportive environment, India has the potential to play a key role in the global adoption of frontier technologies.
The biggest advantage we have is that, now we have a large and growing domestic market to support such ideas. In the past, India’s technology industry growth was largely driven by exports, as the domestic market was still underdeveloped and less remunerative. However, in the present day, there is a strong and growing domestic demand for mobile first digital services driven by market driven changes and favourable policy environment. After the commercial introduction of 4G/LTE technologies in 2016, mobile internet penetration has increased manifold, and now we have around 400 million mobile internet users, driving the explosive growth in the consumption of digital services. This is an important advantage that could be leveraged by the domestic technology industry ecosystem to build scalable global solutions, engineered in India.
For more than two decades, India has been at the forefront of driving technology-enabled business transformation for the world’s largest corporations and governments. As new age technologies such as digital, analytics, AI, robotics and industry 4.0 disrupt the industry, value chains and drive the next level of productivity gains, it is time for India to leverage its strengths and domestic opportunities to build scalable global enterprises.
India’s strengths and advantages in cost effective R&D and a thriving domestic market for mobile-first digital services could be effectively leveraged to build localised solutions, which will have a broader application in emerging as well as advanced economies.
(The author is Partner, Deloitte India)
Read the previous parts of the series here:
Updated Date: Jun 07, 2018 20:55 PM