Digital Dreams, Real Challenges: Key Factors Driving India’s AI Ecosystem

Introduction In recent years, the rapid pace of developments in the domain of artificial intelligence (AI)—spanning machine learning (ML), cloud computing, neural networks, and large language models (LLMs)—has forced the world to grapple with the disruptive potential of emerging technologies. These have significant ramifications for the economy and society, with the global economy standing to gain US$15.7 trillion by 2030 through the integration of AI technologies in and for business processes, labour augmentation, and product enhancement. [1] Of this US$15.7 trillion projected value, US$6.6 trillion is likely to come from increased productivity and US$9.1 trillion from consumption-side effects. [2] The potential for such economic opportunities has been heightened with the release of generative AI tools such as ChatGPT, Midjourney, and DALL-E. Generative AI is expected to add between US$2.4 trillion and US$4.4 trillion to the global economy by 2030. [3] However, such economic optimism is often tempered by the looming threat of job displacement, security concerns, and asymmetric wealth generation between high- and low-income countries. AI-related developments are expected to affect 15 percent of the global workforce by 2030, [4] with a 23 percent structured change in the global labour market. This will result in a decline of 83 million jobs and a growth of 69 million jobs, [5] with the fastest growth seen in technology-related roles and the sharpest drop in clerical and secretarial ones. While automation technologies have primarily affected low-skilled workers in the past, the development of generative AI will impact high-skilled ‘white-collar’ jobs. [6] Economies with a higher proportion of cognitive-based, high-skilled jobs have a higher exposure to AI but are also likely to experience benefits from a greater synergy with AI platforms. [7] This will have a disruptive effect on economies, impacting 60 percent of jobs in advanced economies, 40 percent in emerging markets, and 26 percent in low-income countries. [8]