Artificial intelligence (AI) has become an integral part of our lives. Whether it is getting shopping recommendations on e-commerce websites, those Netflix suggestions or even emails, AI is at play behind the scenes. It’s not just the global landscape, but also within India that winds of change have begun to blow.
This has been validated by the latest report of International Data Corporation (IDC), India Artificial Intelligence Market, 2021 that predicts India’s AI market to reach USD 7.8 billion by 2025 at a compound annual growth rate (CAGR) of 20.2%, from a market value of USD 3.1 billion in 2020. Moreover, the AI services market is set to lead the overall AI market growth in India by 2025 at a CAGR of 35.8%.
That’s not all — IDC predicts that the India AI software market will grow from USD 2,767.5 million in 2020 to USS 6,358.8 million in 2025, at a CAGR of 18.1%.
So, what are the reasons behind AI gaining immense relevance in India over the last few years? Let’s find out.
The dominance of AI in India
Until a few years ago, AI was not considered as mainstream as it is today in the country. There are multiple reasons that can be attributed for its growth — increased technology investment, more internet penetration in the last two years, and improved digital infrastructure. Today, businesses are willing to embrace digital transformation and adopt innovative technologies, such as AI, ML, cloud, and analytics.
Furthermore, both national and state governments have stepped up efforts to increase AI technology spends to deploy varied use cases, including automated monitoring systems, conversational AI solutions, fraud detection, and many more, reveals the IDC’S India Artificial Intelligence Market, 2021 report.
The COVID-19 pandemic: A catalyst
It is no secret that the pandemic has proved to be a ‘blessing in disguise’ when it comes to increased digitalization over the past two years. Previously, businesses were hesitant to explore these new-age technologies, but today the situation looks altogether different. In fact, IDC’s 2021 AI Strategies Buyer View Survey found that 80% of organisations implement or plan to invest in AI to address current business scenarios across business functions, such as customer service, human resources (HR), IT automation, security, recommendations, and many more.
Increasingly, business processes are being transformed with the help of AI and ML, and it is only obvious that increased investments will provide further impetus in the introduction of newer and cost-effective solutions.
Increased adoption across verticals
The good news is AI is being leveraged across verticals based on business requirements. Let’s take an example — the banking, financial services, and insurance (BFSI) sector largely utilises AI for enhanced operational efficiency, more innovation as well as increased customer satisfaction.
On the other hand, manufacturing organisations leverage AI for predictive maintenance, business risk reduction, revenue increase from new markets/products, better business resilience, and many more reasons, says the IDC report.
As per the IDC FutureScape: Worldwide Artificial Intelligence 2021 Predictions — India Implications, by 2023, at least 35% of I1000 companies will leverage AI tools businesswide, such as natural language processing (NLP), ML, and deep learning (DL), to enable 50% of use cases across areas such as CX, security, facilities, and procurement.
Some of the key business objectives for AI include increased business resilience and improved customer retention. Improving operational efficiency is equally important.
Challenges along the way
The statistics in the IDC report reveal that 30-49% of AI projects failed for about one-third of organisations, whereas for about 28% organisations, about 10% of their AI projects failed. Disruptive results to current business processes followed by a lack of follow-up from business units were the two reasons behind failed AI projects.
As per IDC’s 2021 AI Strategies Buyer View Survey, trust and ethics also remain a challenge, more so when it comes to implementing AI technology. The good news is that The Ministry of Electronics and Information Technology (MeitY) has created a policy framework that focuses on AI implementation. They have four committees, each of which maps technological capabilities, platforms, and data for AI; skilling and reskilling, cybersecurity and ethical issues.
What does the future hold?
The predictions reveal that there’s a lot that’s in store for the AI industry. As per the IDC FutureScape: Worldwide Artificial Intelligence 2021 Predictions — India Implications, by 2023, over 40% of consumer-focused AI decisioning systems in finance, healthcare, government, and other regulated sectors will include provisions to explain their analysis and decisions. Moreover, by 2024, 40% of knowledge workers will regularly interact with their own AI-enhanced robot assistant, which will help identify and prioritize tasks, collect information, and automate repetitive work.
The stage is already set; we can’t wait to know more about the developments!
Source: indiaai.gov.in
