Healthcare, financial firms driving AI adoption in India

Out of the survey participants, 60% of respondents were from life sciences and health care

About 88 per cent of Indian enterprises expect to boost their artificial intelligence investments this year, versus 82 per cent a year earlier, according to the second edition of Deloitte’s “State of AI in India” survey.

“Across industries, there are big bets being placed on AI, but within that life sciences and healthcare is quite significant, perhaps driven by the experiences of the last 2-2.5 years,” Deloitte India Partner Prashanth Kaddi said, referring to the pandemic.

Out of the survey participants, 60 per cent of respondents were from life sciences and health care, 56 per cent from financial services, 45 per cent from technology, media and telecom, and 35 per cent from consumer services who planned to increase their AI investments by more than 20 per cent this year.

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While large organisations are finding it difficult to get the best out of their AI initiatives due to bigger integration and change-management challenges, the payback period tied to such investments has reduced for smaller firms.

For instance, 65 per cent of organisations with an employee count of fewer than 5,000 witnessed quicker-than-expected payback, as opposed to organisations with a headcount of more than 20,000, the survey revealed.

Adoption tends to be more in smaller organisations due to fewer decision-making levels, Kaddi pointed out.

That said, most businesses consider AI initiatives as limited-time projects rather than a cornerstone of overall business strategy, the report said, making it harder to sustain and scale up such projects after their launch.

Macroeconomic uncertainties are making organisations more careful with their investments.

“There is a view, also of cautious optimism given the global economic situation, and people want to make smart investments,” Kaddi said.

Over the past year, businesses in India appear to have shifted their focus from AI decentralisation and democratisation towards launching platforms, training modules and upskilling programmes for employees, the report said.

While companies have made changes in management, culture and processes to encourage AI adoption, they have had minimal success in allaying fears tied to AI replacing jobs. About 77 per cent of the total respondents across industries said they feared that increasing AI adoption would lead to job cuts within their firms. The only exception was the financial services sector.

"There is no either or. It is machined with humans,” Kaddi said. “There is going to be reskilling, it doesn’t necessarily mean there is going to be retrenchment.”

The demand for AI talent will continue to outpace supply and businesses will have to work closely with academia to rapidly expand the pool, the report said.

“AI is here to stay. Metaverse and the use of AI for increased personalisation, edge computing and quantum computing are some of the trends to watch out for in the next year,” he added.