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A global leadership opportunity in the AI age beckons India

India’s journey into the data-first world holds immense promise

Nitin Seth

INDUSTRIAL REVOLUTIONS reshape global power dynamics. The first saw the rise of the UK and Europe with coal and steam power. The second, driven by electricity and mass production, elevated the US and Japan. China emerged during the third revolution with electronics and IT, while the US surged ahead. The fourth revolution we are in―the digital age, driven by the internet, AI, IoT, blockchain and Gen AI―is shifting global power dynamics yet again. While the US and China have taken the lead, India is swiftly gaining ground in this global race.

The essential nature of data and AI is democratisation, making it accessible to everyone, regardless of background or expertise. India stands at a unique advantage.

DEMOCRATISATION OF INFORMATION, KNOWLEDGE AND TECHNOLOGY

India’s phenomenal growth is evident in its 820 million active internet users and a 78 per cent smartphone penetration rate. It accounts for nearly half of the world's digital transactions. Social media platforms are widely used for content consumption and creation. E-learning platforms have democratised access to education, and government efforts like Digital India have further democratised technology access nationwide.

STRENGTH OF DIGITAL NATIVES

More than half of India's population is below the age of 30. These digital natives are adept at adopting and adapting to new digital technologies. They consume and create extensive digital content. And their growing affinity towards digital activities like e-commerce, social media influencing and digital education makes them a valuable resource.

DIGITAL PUBLIC INFRASTRUCTURE AND GLOBAL IT SERVICES HUB

India's Aadhaar stack stands out as a highly effective digital infrastructure, leveraging extensive data repositories to facilitate various services like UPI, digital identity verification, and e-governance. Additionally, India has become a global IT services hub with over 50 per cent of the global IT services workforce in 2022, up from 35 per cent in 2013.

ONE OF THE BIGGEST DATA GENERATORS OF THE WORLD

India has a natural edge as the data-first world unfolds around us, driven by a remarkable 1,00,000-1,50,000 times growth in data, the bedrock fuelling the digital and now the AI revolution. India significantly contributes as one of the leading data generators globally, accounting for a fifth of all the world’s data, owing to its large population and rapid digitalisation. In my new book Mastering the Data Paradox I have outlined a practical approach on how nations can build competitive differentiation anchored on data.

UNLEASHING THE WAVE OF ENTREPRENEURSHIP

China's global leadership is bolstered by substantial government sponsorships, while the US benefits from the presence of major tech giants, giving it a competitive edge. China invests heavily in programmes, policies and incentives to encourage innovation and technology development through entrepreneurship. Funding and subsidies like the National High-Tech Enterprise (NHTE) programme, policies like Made in China 2025 and billions of dollars invested every year in Next Generation AI Development Plan are a few notable examples.

In the US, big tech giants like Google, Microsoft, Amazon and Nvidia enable pace and scale of digital and AI innovation. They not only provide substantial funding for research and development but also play a crucial role in shaping the technology landscape and enabling an entire ecosystem, as seen in Silicon Valley.

However, the models of China and the US may not be the natural paths for India to leapfrog in data and AI leadership. For India, the way to capture the immense opportunities of the digital and AI age is to leverage its natural advantages and unleash a tsunami of entrepreneurship, creating millions of young entrepreneurs.

In the highly dynamic and ever-changing technology landscape, startups can bring speed and agility, enabling India to leapfrog and quickly benefit from the rapidly changing business and technology dynamics. It would pave the way for India to become a global innovation hub, tackling global challenges and creating unique market and industry disruptions.

India becoming an entrepreneurial powerhouse is not a pipe dream. As we saw above we have some unique advantages that we can build on, it is truly our time! India's digital infrastructure provides a strong foundation for startups to leverage and build upon, enabling startups to scale efficiently and deliver value-added services. The vast and varied population offers a diverse market for testing products and services. India's pyramid of digital natives who are tech-savvy and eager to embrace new technologies, make them ideal contributors to India's entrepreneurial ecosystem. India can capitalise on its position as one of the biggest data generators globally, allowing startups to harness data and AI to innovate at scale.

However, achieving this is not easy. It requires a significant shift in both mindset and approach.

TRANSITIONING FROM IT SERVICES TO PRODUCT COMPANIES

India has traditionally excelled in providing IT services. But as globally companies are shifting from building to consumption, India must focus on building and scaling product-based companies that provide end-to-end solutions to customer problems through innovative solutions. This requires a strong focus on innovation, continuous R&D and problem solving.

BREAKING THE EXISTING MINDSET OF AN ‘ORDER-TAKER’

We have long been the order-takers and, if we are self-critical, perhaps have ended up being 'coding coolies'. While it has helped establish ourselves as a global services hub, it has also meant that we have ended up playing only a supporting cast role, with the west enjoying greater control and benefits in the technology value chain. To climb up the digital value chain we need to shift towards independent and proactive thinking, be more aggressive as risk-takers and experiment to unleash creativity.

BUILDING CRITICAL THINKING AND PROBLEM SOLVING

As the business world becomes increasingly dynamic, developing an entrepreneurial mindset is critical to succeed in the data and AI age. Questioning the norm, asking 'why' is becoming increasingly critical. Critical thinking empowers individuals to question assumptions, analyse problems deeply, and explore alternative approaches to come up with new and innovative solutions. Shifting from the traditional technical-centric approach to education and workforce, to prioritise critical thinking and problem solving, is critical for success in the long term.

India’s independence led to political freedom, yet millions of Indians were left economically and socially disadvantaged. The digital era provides a remarkable opportunity for India to establish itself as a global leader. While India's journey into the data-first world and the AI age holds immense promise, there are significant hurdles that need to be addressed.

Seth is former chief operating officer of Flipkart.