New research from BCG and IT industry spokesman Nasscom predicts that the artificial intelligence (AI) market in India would reach approximately $17 billion by 2027, expanding at a CAGR of 25-35%.
Titled "AI Powered Tech Services: A Roadmap for Future Ready Firms; AI & GenAI’s Role in Turbocharging the Industry," the report was unveiled on the sidelines of the Nasscom Technology & Leadership Forum 2024 and predicted that the demand for AI talent in India would rise at a 15% CAGR by 2027, paralleling the increasing investments in AI.
The survey states that in 2023, the most anticipated IT investment category would be on AI and ML. The report stated that a number of factors contributed to this surge, such as rising expenditures in artificial intelligence (AI), an expanding pool of AI expertise in India, and higher spending on enterprise technology overall.
Worldwide, investments in artificial intelligence have increased at a rate of 24% from 2019 to 2023, with an expected investment of about $83 billion. Data analytics, GenAI, and ML algorithms and platforms accounted for most of the horizontal AI applications.
The digital content, data analytics, and supply chain sectors receive over 93% of investments from Indian IT services and made-in-India product players. Technology service providers are diversifying their offerings beyond conventional IT support in response to rising demand from enterprises for AI-based services and solutions.
Among these activities are the creation of in-house GenAI and AI platforms, automation tools, data analytics solutions, and custom AI apps for niche markets like retail, healthcare, and banking and finance.
With 420,000 people employed in AI-related roles, India is reportedly the country with the second-highest installed skill base at present. In terms of skill penetration, India ranks first, with three times as many people qualified to work in artificial intelligence than any other country.
It went on to say that the country's population of AI experts has increased fourteenfold in the past seven years, putting it in the top five worldwide. In addition, occupations involving artificial intelligence and machine learning have increased by over 15% in India's tech sector over the last 12 months, with some roles, like AI engineer, experiencing a 67% year-on-year rise.
According to the survey, top companies have allocated $1 billion over the next three years to invest in reskilling their employees in AI and associated technologies, demonstrating their recognition of the value of human capital in the AI journey.
These businesses are doing more than simply embracing AI; they are revolutionizing the way they serve customers, increasing the value they receive, and establishing new benchmarks for the industry. Debjani Ghosh, President of Nasscom, stated, "To accelerate this journey, massive scale investment on AI skilling, investments in ethical and secure AI development practices and governance frameworks, and a fundamental shift towards a human-centered approach, prioritizing transparency and human oversight").
Rajiv Gupta, MD and Senior Partner at BCG, observed that Indian companies are beginning to match the rapid advancements in artificial intelligence. The tech sector is also constructing organizations that are prepared for the future, with Centers of Excellence that are constantly changing and driving the AI agenda.
Seventy percent of people who took the survey have clear plans for how to fund specific use cases. In addition, GenAI and cloud partners are the primary AI partners with which over 70% of organizations are partnered.
According to the survey, companies have assigned specific individuals to drive AI initiatives and have significant support from C-suite executives. According to the results, more than 68% of the companies surveyed had specific CEOs in charge of their AI projects. among addition, there is a commitment from top leadership to AI efforts among more than 58% of the respondents.
The majority of participants have implemented bespoke AI governance frameworks with oversight from functional stakeholders, as AI governance has become an increasingly important topic, according to the report. In order to monitor the results of pilot use cases, prioritize use cases for client production, assess the outcomes of client offerings, and deal with funding and investments, companies have formed dedicated AI steering committees that meet frequently. These committees also deal with security, intellectual property, and regulatory compliances.
In addition, a whopping 90% of the top 25 providers have already committed to massively scaling up their Gen AI skill sets. Eighty percent of businesses are actively trying to upskill their current employees and add new AI-specific jobs within the company. Some examples of such roles include chief AI officer, architect, specialist in AI/ML governance, and officer of AI ethics and compliance.
If Indian tech firms are serious about advancing their AI agenda, the research says they must pay attention to these three critical areas. To begin, in order to provide high-value, scalable products, it is necessary to establish client-centric go-to-market strategies by learning about clients' AI solution experimentation and payment intentions.
Second, closing the knowledge gap by providing all teams with a systematic way to improve their technical and business understanding. Thirdly, in order to maintain innovation and growth in the ever-evolving tech ecosystem, operational models should be rethought by adjusting delivery structures and encouraging collaboration across departments.
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