AI Will Change Geopolitical Dynamics

PUNE: The potential impact of artificial intelligence (AI) on GDP will be US $2.5 to 2.6 trillion. AI will change geopolitical dynamics. AI is changing the nature of jobs as business models are changing. 3.5 million jobs are available in cyber security. Women rejoining the workforce after a career break can be trained to join in cyber security roles. AI is a challenge at present and the IT industry will overcome it. 

These were some of the key points that emerged out of deliberations on the second day of the Asia Economic Dialogue (AED), the annual three-day geoeconomics conference organized jointly by the Ministry of External Affairs (MEA) and Pune International Centre (PIC), from February 29, 2024.

The theme is ‘Geo-economic Challenges in an Era of Flux’. 

Other points that emerged at the conference included: 

India’s soft power was previously in yoga, ayurveda, Bollywood, etcetera, and now digital technology will be added.  IT industry in India is expected to double in size by 2030 to $5bn and is projected to become 10% of GDP. Winners of the Third Globalisation are the developed countries. 

With 46 speakers from 11 countries participating in the 12 sessions over three days at the international conference, day two witnessed insightful discussions on pressing economic matters facing Asia and the world at large. 

Sessions on ‘Generative AI: Impact on Organisations and Society’; a conversation on ‘India’s Role in Information Technology and Digital Diplomacy’; ‘The Third Globalisation’; ‘The Future Automobile and Future Fuels’; ‘Drones: Revolutionising the Future?; and ‘India-Middle East-Europe Economic Corridor’ were held on Friday.

The session on ‘Generative AI: Impact on Organisations and Society’ was chaired by Dr. Ganesh Natarajan, Executive Chairman and Founder, of 5F World. The panelists were Rajesh Nambiar, Executive Vice President, Chairman and Managing Director, Cognizant India; Dr. Rohini Srivathsa, Chief Technology Officer, Microsoft India and South Asia; Nitin Chugh, Deputy Managing Director and Head of Digital Banking and Transformation; and Jeff Walters, Managing Director and Senior Partner, The Boston Consulting Group. 

Dr. Natarajan predicted new multimodal chatbots, a whole lot of startups, multitasking for robots, text-to-video, and AI film festivals. He said AI videos are here whether for good or for bad and people like him were optimists, or “dangerous optimists, as Dr. R A Mashelkar says.

Panellist Rajesh Nambiar, Executive Vice President, Chairman, and Managing Director, of Cognizant India, said there is a role reversal so far as humans were trying to understand computers but now computers are trying to understand humans. He said the potential impact of AI on GDP will be 2.5 to 2.6 trillion. AI, he said, is an equalizer as its benefits are higher where the capabilities are lower, and can lead to higher productivity. He said that in the short run, the impact of generative AI is overhyped, but in the long run it is under-hyped. He said it can impact white-collar jobs, particularly where people use brains, such as statisticians and in equity calculations. 

Panellist Dr. Rohini Srivathsa, Chief Technology Officer, Microsoft India and South Asia, highlighted key aspects of generative AI’s impact on organizations and society. One is the changing nature of work after the pandemic, where paradigms of work and personal lives have changed, as dimensions of time and space regarding work have undergone a shift and AI has introduced a third dimension. Second, concerning previous tech innovations, AI is not new; generative AI is just one new technology and it’s not going to be the last innovation. Third, generative AI combines the functions of an intelligent agent and a reasoning agent to effectively function as a co-pilot. She said AI needs to be assessed in three orders – first is assistive; second is augmentation such as where AI can help a school teacher create interesting lesson plans; and third is autonomous.  She said AI is changing the nature of jobs as business models are changing for effective adoption of AI and creating new revenue streams. She said AI has impacts on education, healthcare, and the judiciary. 

Nitin Chugh, Deputy Managing Director and Head of Digital Banking and Transformation, said by nature generative AI is transformational and will change geopolitical dynamics. It holds the potential to cause a divide between data haves and have-nots. The West, he said, has more availability of public data, whereas India has a mix of personal and public data. The financial services and banking sector has advantages and challenges for the adoption of generative AI. However, there is a need to bring about an ethical and responsible framework for the adoption of AI. One of the most crucial aspects regarding generative AI, he said, is to make it inclusive so it becomes an equalizer and facilitator of a level playing field. Otherwise, some will disproportionately benefit from it. He said there is scope for changes in governance frameworks and these need to be designed with customer protection at the centre. 

Jeff Walters, Managing Director and Senior Partner, The Boston Consulting Group, said one characteristic of companies using AI is that leaders are using it faster. He said the function of AI is like a “co-pilot” and it can be used to reshape business such as through better customer engagement. 

A conversation on ‘India’s Role in Information Technology and Digital Diplomacy’ featured Kiran Karnik, Chairman, of Indraprastha Institute of Information Technology, and Dinanath Kholkar, Independent Advisor and Former Senior Vice President and Global Head of Partner Ecosystems and Alliances of Tata Consultancy Services (TCS). 

Dinanath Kholkar, Independent Advisor and Former Senior Vice President and Global Head of Partner Ecosystems and Alliances of Tata Consultancy Services (TCS), said there is a mismatch in demand and supply for jobs in cyber security, and at present 3.5 million jobs are available in cyber security even as there are concerns regarding cyber security with a rise in cybercrimes. He said women rejoining the workforce after a career break can be trained to join in cyber security roles. Technological opportunities, he said, will create more jobs. Kholkar said the IT industry in India is expected to double in size by 2030 to $5 billion and is projected to become 10% of GDP. 

On the success of India’s IT industry, Kiran Karnik said India’s IT sector started late but the pioneers wanted to compete globally. Young Indians took it up as a challenge and worked on innovation in business models, and the government played a crucial role in supporting and creating a conducive ecosystem through policy frameworks. He said AI is a challenge at present and in the future and the IT industry will overcome it. He observed that the industry has a key role to play in the development of the education and IT industry, especially in R&D.

Kholkar said the banking sector has seen phenomenal payback with the application of AI. Technological advancements need to be supported with favorable ecosystems and policy implementation can enable faster adoption of tech innovations, he added. Data privacy, he observed, is crucial. He said MCCIA’s cyber security initiative in collaboration with the United States Consulate is the first-ever US-India Cyber Security Initiative to strengthen IT connections between the two countries and lead Pune City to become a cybersecurity hub. He said India’s soft power was previously in yoga, ayurveda, Bollywood, etcetera, and now digital technology will get added.  

The session on the topic ‘The Third Globalisation’ was chaired by Prof. Jyoti Chandiramani, Director, Symbiosis School of Economics, Dean, Faculty of Humanities and Social Sciences, Symbiosis International University. The panelists were Anniken Huitfeldt, former Minister of Foreign Affairs, Kingdom of Norway; Rahul Bajoria, Chief Economist, Asia Pacific, Barclays Bank; Dr. Fahmida Khatun, Executive Director of Centre for Policy Dialogue, Bangladesh and Non-resident Fellow at Atlantic Council; and Prof. Lars-Hendrik Röller, Professor at the European School of Management and Technology, Berlin, and former Chief economic advisor to German Federal Chancellor Merkel, and former G7 and G20 Sherpa. 

‘The Third Globalisation’ session focused on the geo-economics paradox of the third globalization, where the winners are the developed countries and losers are the under-developed countries. 

Rahul Bajoria said globalization is a “normative” perspective and not an “idealistic” perspective. This makes developing countries like India go for FTAs and to abolish trade protectionist policies. He said the future of Indian industrialization depends on where it invests. 

Prof. Jyothi said that in the third globalization, there has been a geo-economic flux and a shift from the plurilateral regime to the multilateral regime.

Anniken Huitfeldt, former Minister of Foreign Affairs, Kingdom of Norway, said that third globalization and the SDGs are more about security. 

Dr. Fahmida Khatun said the current world is at the end of the third globalization and the beginning of the fourth. She said globalization is a means to progress, not automatic, and should be more focused on the accumulation of wealth, advancement of technology, trade, and simplified financial transactions. She said challenges to globalization including inequality, and disparities between countries are growing rapidly. She said this will hurt developing countries in the long run. She said issues faced by the underdeveloped countries are that there is the least transfer of technology to the UDCs, and there is a lack of financial outsourcing and investments.

Prof. Lars-Hendrik Röller said the government must work together in the area of carbon emission regulations.

The session on ‘The Future Automobile and Future Fuels’ was chaired by Amit Paranjape, Co-founder of ReliScore. The panelists were Ramkripa Ananthan, Head of Design of Ola Electric; C V Raman, Chief Technology Officer, Suzuki India; and Yogesh Umbarkar, Vice President, Business Development, Valtech Mobility. 

On data protection, Amit Paranjape said data that cars capture is so a geopolitical issue. At a national level, it raises concerns regarding national security and at a personal level, it raises issues about privacy. Increasingly, there are challenges regarding the hacking of cars.

Ramkripa Ananthan suggested making EVs at the price of IC vehicles. She said the weightage of battery cost is the highest in the overall cost of the car. She said the solution to reduce these costs is to promote in-house technologies, select the right technologies, and improve the efficiency of the battery to reduce costs. There is a need to increase software to reduce dependence on hardware, she said. She said long-haul vehicles require a mix of three solutions– battery swapping, and portable batteries. and behavior change. Ramkripa said there was a need for talent in future technology at designing, manufacturing, and so on; not just knowledge but application of that knowledge; and also road safety.

C V Raman said there is a connection between economic development and mobility. He said sustainable mobility, energy security, and society are the three key aspects for determining the future of automobiles and fuels in India. Sustainable mobility, he said, will require customer focus, infrastructure development, and digitization. With the expected increase in per capita incomes, passenger vehicles are expected to grow at a rate of 5-6%, he said. He said energy security at present in India is dependent on fossil fuel imports, and as fossil fuel dominant energy grid has adverse impacts on the environment. He said there is a need to reduce emissions and achieve carbon neutrality by 2070. He said the question to be addressed for the future of mobility is “How can we move a billion people?” He listed solutions such as electric mobility, alternate fuels, gas-based mobility, waste-to-fuels, ethanol blending, and enhanced electrification. He said EVs are significantly heavier than their IC counterparts. There is a need to change the material in EVs. He said a key aspect of increased uptake of EVs is developing avenues for home charging. Space for parking also plays a crucial role. He said, “60% of India doesn’t have parking space”. He said hybrid vehicles present a better solution for the future of mobility and reduce C02 emissions. He said renewable energy in the energy mix needs to increase. He said all fuels will have a space in the future of automobiles and that hybrids will be a first vehicle and EVs will be a second vehicle.

Yogesh Umbarkar said the future of cars can be understood as pre-Covid and post-Covid. Pre-Covid was focused on autonomous, connected, electric, and ‘shared’; and post-Covid has shifted to autonomous, connected, electric, and ‘personal’. India is somewhere between “least autonomous” and fully autonomous. He said that with an increase in digital connectivity and the adoption of 5G networks, ‘personalized and connected’ features are becoming prominent in vehicles. A vehicle is getting transformed into a smartphone on four wheels. Increasingly, the experience of home, office, and lifestyle is getting connected with the vehicle. These aspects are shaping business models as well.  However, these are also raising issues of data privacy and protection.

The session on ‘Drones: Revolutionising the Future?’ was chaired by Anish Michael, Lead, Centre for Future Mobility, OMI Foundation. The panelists were Mark Yong, Co-founder and CEO of Garuda Robotics; Aniruddh Gupte, Founder and CEO of Podrones Logistics; and Sunil Jha of ideaForge. 

Mark Yong: Constraints – autonomy, energy, safety; Drones have to take care of themselves once they are out of sight from the pilot’s eyes; Today everything is based on batteries hence energy storage is important; Multiple levels of safety system is required; Airspace utilization – integrated national air space – unaccrued instead of unmanned; Commercial drones can be the future. 

Aniruddha Gupte: Drones will replace some humans in the delivery business; Policy suggestion for government – encourage drone engineers; embrace technological solutions to boost the economy.

Day 3 will have sessions on ‘Reimagining and Revitalising the World Trade Organization’; ‘Critical and Emerging Technologies (CET): Securing our Future’; and ‘Expanding Regional Connectivity: Towards a More Integrated South Asia’. The Chief Guest at the Valedictory Session will be R K Singh, Minister for Power, New and Renewable Energy, GoI. It will be chaired by Dr. Vijay Kelkar, Vice President, of PIC, and Chairman of the 13th Finance Commission.