Although India only accounts for a small share of the global Artificial Intelligence (AI) market, it produces 16 percent of the world’s AI workforce, according to a recent report jointly published by consultancy firm Bain & Company, Microsoft, and Internet and Mobile Association of India (IAMAI).
This places the country among the top three contributors of AI talent in the world, the report stated.
India’s AI market was worth 3 billion US dollars in 2020, approximately one percent of the global market. This has been predicted to change as the Indian AI market is expected to grow at the second-fastest rate of 20 percent among major economies over the next five years, behind only China, said the report.
The report was compiled based on the results of a comprehensive survey completed by 148 providers and 343 enterprises. The survey respondents were senior executives who are responsible for their company’s decisions related to AI and Machine Learning (ML).
When it comes to AI capability on scale implementations, Indian providers are either ahead of or on par with their global counterparts. “Indian providers state that 65 percent of their prototypes reach production scale — a significant lead over global providers’ 49 percent success rate.”
The report highlights the role of micro, small and medium enterprises (MSMEs) in the growth of the AI market in the country. “Micro, small and medium enterprises (MSMEs), focused on addressing niche industry-specific opportunities, are innovating far above their weight by leveraging their workforce and specialist contractors to incorporate AI/ML modules into their e-commerce ventures and digital business processes,” said the report.
Likewise, the pandemic has spurred an increase in demand for AI talent from conglomerates wanting to transform their operations using AI/ML technologies.
An analysis done in 2020 of LinkedIn employment trends show that there has been a significant increase in AI-related hiring in India.
Although India’s AI workforce is growing, another report published by the National Association of Software and Services Companies (NASSCOM), highlighted the growing gap between the demand and supply of AI talent in the country. While the gap between demand and supply for AI talent was around 14 percent in India in 2018, it increased to 33 percent by 2021.
The Bain-Microsoft-IAMAI report states that 80 percent of the enterprises they surveyed have at least one AI model in production, indicating the penetration of the technology in the country. However, usage of AI across functions and use cases remains low. Only 35 percent of enterprises reported having more than three AI models in production at scale.
Sectors such as communication, over-the-top (OTT) and gaming, technology, and financial services have seen broad adoption of AI. Around 40-55 percent of the companies in these sectors reported having more than three AI models in production at scale.
An increasing number of Indian enterprises prefer to ‘build’ for their own customised needs rather than ‘buy’ pre-built AI/ML models. “In the next three years, 49 percent of enterprises plan to increase the proportion of build, compared to 29 percent that plan to increase the proportion of ‘buy’,” said the report.However, 45 percent of small-scale of enterprises prefer to buy pre-built models, due to the high cost of building them in-house. But even such enterprises experiment with open source tools and frameworks.