Unlocking India’s AI potential

 

The digital transformation has changed the way the business leaders look at company’s operations. With data being a strong back-bone of every decision made in corporate board-rooms, companies are striving towards achieving AI-powered data models to achieve the coveted strategic direction. Artificial Intelligence (AI), being a strong disruptive force in digital revolution, is a combination of technologies which are aimed to mimic highest level of human intelligence.  A study conducted by McKinsey showed that highest incorporation of AI was towards increasing revenues by optimizing inventory-management, pricing, promotions, demand forecasting and customer-service analytics. As a concept, artificial intelligence is not a modern-day concept. Greek, Chinese and Egyptians contemplated on inanimate objects coming to life as intelligent beings. However, the term ‘artificial intelligence’ was officially coined in 1956 during a conference at Dartmouth College in United States. The scientist John McCarthy opined that in future, human thinking abilities can be simulated by computer algorithms which like, human beings can learn based on their own experiences. This led to a revolutionary disruption as many technology companies and academic institutions across the globe invested their resources in building strong AI-powered programs. Eventually, AI started to feature in gaming, medical and research domains. Globally, there are several strides in field of AI with countries like China and United States channeling billions of dollars to fund research to sharpen their technological prowess.

To join this bandwagon, India’s think tank ‘NITI Aayog’ drafted a National AI strategy in 2018 to focus on unlocking opportunities in economy’s key focus areas. The panel has identified healthcare, agriculture, education and smart mobility to be key economic engines to remodel using latest AI tools. Having said that, implementation of AI programs can reach far beyond these sectors. With that, I will run through some sectors to highlight some potential opportunities for AI and developments achieved so far

Healthcare:

Healthcare in India is complex especially in rural and neglected corners of the country where the basic wellness facilities are denied due to a host of issues. India’s Ayushman Bharat initiative promises a healthcare insurance for secondary and tertiary hospitalization across wider coverage. There is strong opportunity to implement technology solutions to increase the healthcare coverage, by introducing digital medical records to be accessed remotely.  Deep machine learning algorithms can help in clear diagnosis and identify future outcome of diseases, leading to further prevention. Artificial intelligence, being what it is, can learn from the millions of patient case studies and sharpen its diagnostic abilities over time. In 2018, Microsoft and Apollo Hospitals had entered into a collaboration wherein Microsoft would provide the appropriate technological models to derive insights from Apollo’s patient data. As mentioned earlier, there is a strong shortage of medical professionals in rural areas and leveraging digital solutions can help in a robust disease management.

Agriculture:

Despite our strong efforts to move away from agri-based economy towards other industries, 60% of Indian population is involved in agriculture and allied activities. With this, every year, agricultural domain faces multiple issues including land degradation, deteriorating water tables, soil infertility and pest resistance. Hence, it is imperative to relook at this segment as a potential opportunity to bring in artificial intelligence and machine learning solutions.  Furthermore, startups are recommending robotics and drone-based solutions to analyze soil types and weather in order to run in under AI-ML models to derive actionable insights for the farmers. Use of technology can enable farmers better access to new farming techniques, insights, markets, appropriate credit and insurance. In 2019-20, Indian agri-based startups raised more than USD 1 billion through a total of 133 deals. An adequate support from the government can help more startups emerge within the ecosystem.

Education:

I have to admit that education is one of my personal favourites where I would love to see ground-breaking digital solutions for enhanced learning experience. Like major segments, majority of issues faced by India’s education landscape are focussed in rural areas. With an unavailability of adequate infrastructure, teachers are majorly faced with a heterogeneous group of students having variations in age and learning abilities. To add to this, Indian education system is heavily leaning on rote rather than on application. It is common knowledge that many students drop out due to unavailability of funds, poor educational infrastructure and unwillingness to learn. E-learning solutions have been an emerging trend in India but its reach in rural corners is questionable. AI may not completely replace teachers but it can be an enabler to manage a heterogenous group. The e-learning solutions equipped with strong statistical algorithms can help customize the learning and help student learn at their own comfortable pace. Statistics coupled with AI can also help predict outcomes for student drop-out rates, helping the e-learning solutions draft an alternative learning plan for students to follow. The AI-ML technology can also be used to create an interactive gamification experience for students to learn conceptually.

Smart Mobility:

Nowadays, India’s urban population needs smart mobility solutions to enable a convenient and faster transport mechanism. Transport is spine for India’s urban economic development and India needs strong solutions for an enhanced connectivity. Autonomous vehicles are something India is not ready for immediately. However, automotive companies can invest significantly in developing suite of autonomous technologies as a potential alternative for the future. These technologies, even though not implemented on immediate basis, can prove to be of an economic advantage to the country. Such technologies can act as a stage for further international partnerships with industry and academia. AI technology can also address the impending issues of traffic congestions and road fatalities by employing algorithms to divert the traffic in areas of heavy bottlenecking. Shared mobility being the new trend today can be an initiative for startups to come up with AI platforms which aid ride sharing and travelling in faster and cheaper manner

With the threat of coronavirus pandemic looming over businesses, it is essential for corporate and government to relook, remodel and restructure its digitalization initiatives. The Government has partnered with National e-Governance Division, Ministry of Electronics & IT and Intel India to roll-out a program for youth to act as a guiding force to develop an innovative tech mindset. The Union Ministry of Communication and Information Technology set the stage for young growth companies to showcase their AI-based platforms to the world. The challenge was termed as AI Solution Challenge, aimed for increasing the out-of-box thinking catering to key growth sectors of the economy. In October 2020, Telangana government locked synergies with International Institute of Information Technology, Hyderabad (IIIT-H), the Public Health Foundation of India (PHFI) and Intel India to launch Applied AI research center to develop AI-based use cases to solve population-scale issues. These are handful of initiatives which the government has brought to table to foster growth and collaboration in field of AI.

However, despite the throttle, there are several obstacles on the journey to a holistic AI implementation across target segments. Currently, there are handful of institutes which are specialist in developing AI platform. The Government needs to identify the potential academic institutions and energize them with appropriate funding, partnerships and degrees of freedom to experiment on AI algorithms. Also, for a successful deployment of AI across sectors, we need a robust database of raw data. Currently, data collection mechanism in our country is extremely poor and the Government needs to take proper steps to enable robust aggregation of live data. That said, even if we have to assume a smooth implementation, the fear of unknown is expected to persist with AI expected to take over several employment opportunities. Eventually, this will definitely demand the employees to upgrade their skillsets and capabilities. 

Ultimately, it’s just the question of are we ready yet?

 

 

 * The opinions expressed in the article are personal and do not represent the opinions of the organization I work for * 

The Hottest Trend in the Financial Systems : Special Purpose Acquisition Company

One of the hottest trends on the financial markets is formation of a special purpose acquisition company (SPAC). Companies wanting to undergo listing may choose to divert from the traditional IPO route and associate themselves with the SPACs. But what are these SPACs and how do they function?

1)     Essentially, SPAC is a shell company, established with a sole objective to raise funds from the retail investors through an IPO, only to make an acquisition into the future. Thus, a SPAC is sponsored by institutional investors, private equity, hedge funds, CEOs and high net-worth individuals

2)     The private companies chose SPAC route for listing since the process ensures access to faster liquidity which otherwise may be denied. Besides IPO takes 1-2 years to complete. SPAC offers faster listing with process completion in approximately 5-6 months.

3)      As per data from Dealogic, the US SPAC IPOs have grown exponential from USD 13.2 billion in 2016 to USD 34.6 billion in 2020, registering a CAGR of 26.8%. Especially in the times of COVID, with a heightened need for faster liquidity, year 2020 has shown a rapid surge of 182% Y-O-Y in SPAC deals.

4)     This trend is slowly moving towards European markets as many US SPACs are focusing on acquiring potential targets in the region. This paves way for private companies with attractive valuations which are now looking to list themselves on the US stock exchanges.

5)     Furthermore, a red ocean is bubbling in the US markets with SPACs fighting hard to get to these lucrative deals. This has led to some newly formed SPACs to look beyond national frontiers into the niche markets. The Asia Pacific region is also emerging as a hot bed for SPACs with USD 2.4 billion raised in 2020 as against USD 613 million in 2019.

6)     However, there is a rising concern amongst the investor lobby that this bubble will eventually burst in the future. One of evident red flags is the fact that the SPACs need to hunt their potential targets within 24 months, failing to do so, will result in entire investment being returned to investors with interest. With deadlines approaching, SPACs may compromise over quality targets and simply acquire unfavored companies to avoid liquidation. Another measure cause of worry is that SPACs do not have a robust business plan conveying their way forward, resulting in strong ambiguity amongst the investors.

In my opinion, with too many investors fighting for a limited share of pie, it is clear that there will be a correction in the future. It is just the question of when.