AI gold rush: GenAI's forecasted $1.5T GDP injection to boost India's economy
EY’s report unveils that Generative AI could inject $1.2-1.5 trillion into India's GDP by 2030, signaling a transformative era. The report delves into industry readiness and challenges, shedding light on Gen AI's monumental impact on India's digital future.
artificial intelligence
Highlights
- The report titled ‘AIdea of India: Generative AI’ mentioned the forecast
- 75% of Indian businesses show limited readiness for harnessing GenAI benefits
- 60% of the surveyed organisations recognised the impact of GenAI on their businesses.
A report by EY (Ernst & Young Private Limited) projects that Generative AI (GenAI) could inject a staggering $1.2 - 1.5 trillion into India's GDP over the next seven years. The report, aptly titled ‘AIdea of India: Generative AI’s potential to accelerate India’s digital transformation,’ foresees a remarkable contribution of $359-438 billion in the fiscal year 2029-30 alone.
The impact on GDP by sectors
Breaking down the numbers, the report asserts that approximately 69% of GenAI's impact on India's GDP will stem from pivotal sectors like business services, financial services, education, retail, and healthcare. This signals a profound shift as organisations rapidly embrace an AI-first approach to digital transformation.
Challenges and readiness
However, despite the optimistic outlook, the study reveals that 75% of businesses in India express a low to moderate readiness level to harness GenAI's benefits. A significant portion, 52% of organisations, cite the skills gap as a primary challenge, while 42% grapple with the ambiguity surrounding use cases.
Strategic measures for GenAI innovation
The report emphasises the need for increased government involvement in GenAI development and deployment. Implementing measures like enabling access to training data, deploying GenAI systems as public goods, securing digital infrastructure, and investing in research and development can pave the way for GenAI innovation.
Data privacy concerns
Addressing concerns, the report flags data privacy as a critical issue, with 36% of organisations identifying it as the most significant risk. Other concerns include hallucination or fabricated answers (24%), biased responses (21%), and cybersecurity (16%). Impact on customer engagement A noteworthy finding is that 75% of organisations see generative AI significantly influencing customer engagement, positioning it as a key segment for GenAI's impact.
Collaboration and implementation
The report indicates that 73% of organisations prefer partnering with external tech providers for GenAI implementation. This aligns with the growing trend of businesses recognising the value of collaboration to harness the potential of AI technologies.
Global initiatives for GenAI Recognising
GenAI as an economic catalyst, governments worldwide are actively pursuing measures to promote and regulate AI. Enabling access to training data, deployment of GenAI systems as public goods, securing digital infrastructure, and fostering talent through public funding of R&D are highlighted as crucial steps.
Sector-specific influence
Experts in the report emphasise that GenAI's influence on each sector depends on factors like feasibility, adoption rates, and industry contribution to India's economic activity. Adopting a 'light touch' regulatory approach is suggested to balance innovation and risk management.
The transformative potential of Generative AI for India's economy is immense. The key lies in addressing challenges, fostering collaboration, and implementing strategic measures to ensure responsible and effective integration.
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