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Leveraging emerging digital technologies for India’s transformation – 2017IoT, cloud, VR and AR, blockchain, robotics and AI

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Introduction to emerging technologies

Message from PwC

Message from ASSOCHAM

Emerging technologies in India: IoT, AI, robotics, VR and AR, blockchain and cloud

Focus areas of emerging technologies within sectors

Social and economic impact of emerging technologies

Threats and downsides – mitigation and change management

Policy planning priorities

Looking ahead

Bibliography

Skill development imperatives for emerging technologies

What constitutes emerging technologies?

IoT

Cloud technology

AR and VR

Blockchain

AI and robotics

Social impact

Economic impact

Creating a conducive environment for developments in emerging technologies

Enabling businesses to adopt emerging technologies

Safeguarding data, privacy and transparency

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Leveraging emerging digital technologies for India’s transformation – 2017 3

Message from PwCWe live in an age of rapid transformation—one that has witnessed disruptive innovations, rising consumer expectations and reduced shelf life of technology. This has reshaped how businesses perceive technology and forced them to reimagine even the successful business models. Organisations have been redesigning their products, services, channels and operations in order to grow their revenue through the convergence of emerging technologies such as the Internet of things (IoT), artificial intelligence (AI), robotics, cloud, blockchain, augmented reality (AR) and virtual reality (VR). Alongside large firms, start-ups too have mushroomed and contributed significantly towards the growth and adoption of emerging technologies in India. Smaller and nimbler start-up organisations are now becoming potent challengers to the existing market leaders through innovation and the adoption of newer technologies.

The large-scale initiatives of the government, aimed at economic galvanisation and inclusion, such as Make in India, Digital India and Skill India, have begun to look at and leverage the above emerging technologies to create efficiencies and increase reach across the population at lower costs.

Technology innovation in India, however, remains fragmented and inefficient. Support structures and productivity accelerators like IT and network infrastructure, funding, talent base and regulations have scope for cooperative expansion and evolution. Upskilling to the emerging technologies is one such opportunity area where academic and professional education systems could collaborate and create skilled manpower to meet the increasing demand for data scientists, analysts, statisticians, specialists in AI, ML and IoT platforms and applications, and robotics engineers.

Through this knowledge paper, we have tried to focus on how the emerging technologies—AI, robotics, IoT, the blockchain, cloud, AR and VR—can further the objective of India’s digital transformation. We have tried to examine recent developments in the space and future areas of application across different sectors, the expected social and economic impact of emerging technologies on businesses and individuals, potential threats and downsides that need to be mitigated, possible approaches towards bridging the skill gap as well as potential areas of policy planning for creating a nurturing environment for emerging technology development, adoption and innovation.

Arnab BasuPartner and Leader, Technology Consulting, PwC India

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Message from ASSOCHAMMessage from the PresidentNew technologies and smart applications have become prevalent. The ability to create, distribute and effectively use technology has become a major source of competitive advantage. Some of the main features of this transformation are the growing impact of information and communications technologies (ICT) on business, the economy and society; the rapid application of recent scientific advances in new products and processes; a high rate of innovation across countries; a shift to more knowledge-intensive industries and services; and rising skill requirements.

Today, technology represents a way for developing nations to foster economic development, improve levels of education and training, as well as address the emerging issues within society. Modern India realises the fact that science and technology are a key element for economic growth.

As businesses, big and small, face an ever-changing global market, identifying the next big idea is becoming essential to stay ahead.

ASSOCHAM, India’s apex chamber for commerce and industry, is organising the 2nd International Technology Summit as an attempt to create a forum for discussion on emerging technologies, ideas and concepts like IoT and M2M, AI and robotics, virtual reality, blockchain technology, and cloud and cloud security in various sectors like the healthcare industry, digital infrastructure, education, learning and agriculture. We sincerely hope that all the stakeholders will gain immensely from the deliberations at this international summit and achieve the objective of creating a digital India.

Sandeep Jajodia President, ASSOCHAM


Message from ASSOCHAMMessage from the ChairmanWe have come a long way in creating a digital India. It would not be an overstatement to say that our proactive approach to policies, programmes and practices towards the adoption of emerging technologies for economic transformation will provide the foundation for the success of all our flagship programmes such as smart cities, Make in India and Jan-Dhan Yojana. Together, we can be proud of our achievements so far. We have created the largest digital identity platform in Aadhaar; we are creating the world’s largest rural broadband network, the world’s largest direct benefit transfer system and the world’s largest citizen engagement platform in MyGov. Today, we have built a very robust platform from which we can leapfrog into the next wave of the journey of new technology adoption.

The area of emerging technologies offers a dual opportunity for us in India. On the one hand, there is the opportunity for India to emerge as a leader in the design and development of products and services in new and emerging technologies. On the other hand, the application of advanced technologies has the potential to create improved access for Indian companies to global markets, new employment opportunities and efficiency improvement. Technology solutions in AI, IoT, the blockchain, cyber security and related areas may require a ‘look global – adopt local’ approach for India. Policies on IoT, the cloud and analytics can provide the required push to promote adoption. Indian entrepreneurs are already working and delivering products and solutions in emerging technologies.

As we embark upon this journey of adoption of new technologies, some of the areas that may require attention include skill and capacity building, work organisation and redesign, standardisation and inter-operability, regulatory framework, environment, cyber security and public safety. A programmatic approach can help to initiate action and move forward in this direction. Industry-government collaboration will be the key to success.

The second International Technology Summit 2017 is an attempt to bring together all stakeholder groups to deliberate on policies, applications, solutions and requirements for the adoption of emerging technologies by Indian industry and the government. We sincerely believe that the deliberations will be beneficial for all stakeholder groups.

I wish the summit great success.

Dr. Lovneesh ChananaChairman National IT/ITES council, ASSOCHAM

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Message from ASSOCHAMMessage from the Secretary General Technologies have made an enormous impact on the growth and development of countries around the world. Developed and advanced countries today are in the league they are in largely because of the effective use of transformational technologies. These technologies have played a critical role in accelerating economic growth and improving the living standards of millions of people. In the past four decades, the transformational impact of technology has been remarkable. It has disrupted traditional businesses and created new business opportunities and jobs.

New technologies and smart applications have become prevalent. The ability to create, distribute and exploit knowledge has become a major source of competitive advantage, wealth creation and improvements in the quality of life. Some of the main features of this transformation are the growing impact of information and communications technologies (ICT) on the economy and on society; the rapid application of recent scientific advances in new products and processes; a high rate of innovation across countries; a shift to more knowledge-intensive industries and services; and rising skill requirements.

ASSOCHAM, India’s Apex Chamber for Commerce and Industry, has organised the 2nd International Technology Summit 2017 with the aim of creating a forum for discussion on emerging technological ideas and concepts and how India can leverage them in various sectors for India’s transformation.

I thank the PwC team along with Varun Aggarwal, Director, ASSOCHAM and team for organising this timely and meaningful summit and convey my good wishes for the success of the 2nd International Technology Summit 2017.

D. S. Rawat Secretary General, ASSOCHAM


Introduction to emerging technologiesWhat constitutes emerging technologies?While the term ‘emerging technologies’ has been in use over the last few years, its definition, in terms of the technologies that it may be considered to include, has kept changing as the application landscape for some of them either matured, did not expand to previously anticipated levels or was overtaken by other more advanced technologies.

AI – sector applications

Cloud – sector applications

Blockchain – sector applications

AR and VR – sector applications

Robotics – sector applications

IoT – sector applications

• AI – sector applications

• AI-enabled business analytics

• AI-enabled virtual agents in support centres

• AI for detecting and preventing financial fraud

• AI in driverless cars

• AI in drug discovery

• AI for simulated training and flight control systems

• Cloud deployment of IT infrastructure and applications for start ups and SMEs

• Cloud technology for large-scale government initiatives such as Aadhaar for efficiency, scale and cost benefits

• The blockchain to secure banking and financial services transactions

• Distributed ledger technology (DLT) for improving transparency and fairness of voting in elections

• The blockchain for peer-to-peer energy transactions

• Immersive 3D VR movies

• AR and VR in gaming

• AR shopping experience in retail

• Remote healthcare delivery using AR and VR engines

• Industrial robots for automating tasks

• Software robotics in insurance for claims automation

• Robots in defence – bomb disposal, detecting hazardous materials

• Robots in healthcare – performing precision surgical procedures

• Connected factories and supply chains

• IoT sensors to detect security threats such as gunshots, drones for surveillance

• IoT in connected vehicles predicting failures, enforcing safe driving habits

• IoT sensors to improve oil rig efficiency

Emerging technologies

for digital transformation

Source: PwC analysis

Not long ago, social, mobility, analytics and cloud (SMAC) were popularly grouped as emerging technologies. The technology world has evolved since then and many other technologies, such as artificial intelligence (AI), robotics and the Internet of things (IoT), have seen widespread commercial deployment.

This report explores the above technologies—AI, robotics, IoT, virtual reality (VR) and augmented reality (AR), the blockchain—and, additionally, the cloud in terms of their percolation into Indian businesses and society and their potential for achieving India’s digital transformation.


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Emerging technologies in India: IoT, AI, robotics, VR and AR, blockchain and cloud

IoT An overviewIoT is used to define a network of objects (machines/humans) including devices that collect data about them (software, sensors, etc.) as required. These devices connect the objects and exchange data over the network along with remotely controlling and monitoring the IoT devices, with no human intervention. A subset of IoT is industrial IoT (IIoT) which refers to IoT use in the industrial and manufacturing sectors.

As a digital connectivity network, IoT spans two overlapping areas—the first is smart, connected products and services (including consumer devices like smart watches) and the second is the collection of data to improve business performance. With this data, they can improve processes, predict and prevent problems, and ultimately create superior ecosystems for new products and services.

IoT-based events capturing

Enterprise management system (EMS)

Enterprise resource planning (ERP)

Customer relationship management (CRM)

Warehouse management

Distribution routing

Single reader Handheld reader Forklift reader Warehouse scanner RFID gate

Tracking of:

Production Packaging Transportation Warehousing Distribution

Step: ProductionType: Box 1234Ort: Line Pos AZeit: 08:25:23Serial number

• Raw material flow

• Production processes

• Transport logistics

• Container management

• Warehouse logistics

• Route management

Example flowA

A B C D E

2


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IoT

Vehicles, asset, person and pet monitoring and

controlling

Agriculture automation

M2M and wirelesssensor network

Embedded mobile

Everyday things

Smart homes and cities

Telemedicine and healthcare

Building management

Security and surveillance

Energy consumption

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How India is embracing IoTIoT has acquired significant market traction in India over the last few years and by 2020, at least two-thirds of Indian businesses will set up an IoT centre of excellence to drive the adoption of efficiency-centric technologies and applications1. The Government of India is also upbeat about the growth prospects of this technology, as indicated by its flagship programmes such as Digital India, Make in India, and Start-up India. Moreover, in July 2016, it launched an IoT-focused Centre of Excellence

According to a Gartner report,4 50% of IoT solutions will originate in start-ups that are less than three years old. IoT start-ups in the retail sector aim to help offline retailers target their customers better through

The global IoT market is expected to reach 1.3 trillion USD by 2020.3

1 Heidt, E. T. (2016). 2017 planning guide for the Internet of things. Gartner. Retrieved from: https://www.gartner.com/binaries//content/assets/events/keywords/catalyst/catus8/2017_planning_guide_for_the__iot.pdf (last accessed on 6 November 2017)

2 Special correspondent. (8 July 2016). Nasscom unveils first IoT-focused centre. The Hindu. Retrieved from: http://www.thehindu.com/business/Nasscom-unveils-first-IoT-focused-centre/article14476475.ece (last accessed on 6 November 2017)

3 IANS. (12 October 2017). Global IoT market to hit $1.29 trillion by 2020: IDC. BGR. Retrieved from: http://www.bgr.in/news/global-iot-market-to-hit-1-29-trillion-by-2020-idc/ (last accessed on 6 November 2017)

4 Gartner. (9 October 2014). Gartner says by 2017, 50 percent of Internet of things solutions will originate in startups that are less than three years old [Press release]. Retrieved from: https://www.gartner.com/newsroom/id/2869521 (last accessed on 6 November 2017)

in Bengaluru along with NASSCOM.2 Planned government projects such as smart cities (e.g. Amaravati in Andhra Pradesh – India’s first greenfield smart city project), smart grids and smart transportation are also expected to be major revenue-generating sources for IoT solution providers in the future.

IoT offerings that use Wi-Fi sensors to monitor customers in areas around retail outlets, record footfalls and generate more customer engagement for retailers. IoT is revolutionising the agriculture sector. For example, a

Bengaluru-based start-up has come up with IoT solutions such as solar water pumps, allowing users to control them through a mobile app, web or SMS, thus modernising the entire sector.


SecurityAlarm system monitoring, videosurveillance, facility management

AgricultureWater resources management, weather information

ManufacturingCustomised solutions in asset management,smart sensors, data collection

RetailATM machines, cash replacement, paperavailability, card payment, account balances

HealthcareRemote patient monitoring with smartphones,smart body sensors

Homes and buildingsSmart homes, building alarms, security, fire intrusion, solar energy

EducationM-education, attendance tracking

UtilitiesSmart meters for energy and fuelconsumption for homes, smart grids

TransportationFleet management services,cargo management, GPS assettracking, fuel consumption

Consumer electronicsRemote monitoring and controlling interoperabilitybetween devices, TVs, e-readers


IoT solutions across sectors

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Cloud technology

An overview

Cloud computing is a model that allows companies and individuals to access a pool of computing resources such as applications, storage, servers and network bandwidth, over an network (as opposed to a local server or client machine). This makes it possible to quickly provision resources based on demand without the associated encumbrances of maintenance and management.

Cloud computing can be broadly categorised as:

• Infrastructure as a Service (IaaS),

• Platform as a Service (PaaS), and

• Software as a Service (SaaS)

Cloud computing

PaaS

Web services

Cloud backup

Hybrid cloud

SaaSAjax

Private cloud

IaaS

Apex

Multi-tenancy

Public cloud



How India is embracing cloud technologyAccording to a TechSci Research report,5 the market for cloud computing services in India is projected to grow at a compound annual growth rate (CAGR) of over 22% during 2015–2020.

In India, the adoption of cloud computing has gained momentum over the last few years. In a 2017 report,6 Gartner pointed out that cloud growth in India is expected to continue to be driven by IaaS—projected to grow at 49.2% in 2017, followed by 33% growth in SaaS and 32.1% in PaaS. This expansion will be driven in part by government support towards the adoption of emerging technologies and the potential of cloud computing to address the challenges faced by company leaders.

Further, the projected increase in IaaS could be an indicator of the potential plans of firms to migrate applications from on-premise infrastructure to the cloud and future deployment of applications on cloud. The development of cloud-native and cloud-ready platforms—that is, PaaS—is helping organisations approach development and deployment in a much more cost-effective manner, with SaaS allowing them to pay as per use. But to achieve

The public cloud services market in India is projected to grow by

The Government of India has initiated a cloud computing service ‘GI Cloud’ named MeghRaj’, which will help in the rapid development and implementation of eGov applications, ensuring optimal utilisation of the infrastructure. This will help in speeding up the delivery of electronic services while simultaneously optimising the government’s information and communication technology (ICT) spend.8

in 2017 to 1.81 billion USD.7

38%

5 TechSci Research. (2015). India cloud computing market to exhibit over 22% CAGR By 2020 [Press release]. Retrieved from: https://www.techsciresearch.com/news/339-india-cloud-computing-market-to-exhibit-over-22-cagr-by-2020.html (last accessed on 6 November 2017)

6 Gartner. (2017). Gartner says public cloud services in India forecast to reach $1.8 billion in 2017 [Press release]. Retrieved from: https://www.gartner.com/newsroom/id/3592917 (last accessed on 6 November 2017)


8 National Informatics Centre, Ministry of Electronics and Information Technology. (n.d.). About MeghRaj. Retrieved from: https://cloud.gov.in/about.php (last accessed on 6 November 2017)

a certain scale of SaaS and PaaS, companies might require their own specialised infrastructure to operate more effectively than if they were run on an IaaS solution.

The manufacturing sector in India, for example, has used the cloud for customer relationship management (CRM) and supply chain applications for improved connectivity and integration with external stakeholders.

Global tech companies are taking a keen interest in the quickly expanding Indian market as they have been reaping handsome dividends from their investments in the past. For example, a Silicon Valley giant will open its first ‘cloud region’ in Mumbai, India, by the end of this year, competing against other global technology companies in the cloud computing services space.

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AR and VRAn overview

How India is embracing VR and AR

AR utilises a real-time view of the physical world around us and enhances it by depicting digital information. On the other hand, VR creates a simulated world via supplemental devices that render and display information rather than just reflecting the real world. Data visualisation, marketing and branding, and training and development are some of the possible fields where AR and VR are gaining popularity.

According to a 2016 TechSci Research report,10 the AR and VR market in India is projected to achieve a CAGR of 55.3% during the period 2016–2021. Applications of AR/VR for headgear and mounted display are on the rise, particularly in sectors like retail, auto, defence, gaming and entertainment, which are at the forefront of AR/VR adoption in India.

In terms of adoption, retailers are using AR in various ways—online shopping; virtual retail stores through AR apps; AR advertisements with web content, product videos and coupons; and 3D product previews at stores.

In healthcare, nurses will be able to locate veins with the aid of AR. Pharmaceutical and medical instrument companies will find AR very useful for R&D as it will help them to visualise a design, drug or instrument.

Further, surgeons will be able to learn complicated surgeries via VR, which will aid them in increasing their efficacy. VR can also be used to treat post-traumatic stress disorder (PTSD). Finally, AR and VR can aid in extending essential healthcare services to remote areas.

In the gaming sector, AR and VR start-ups have an opportunity to change the way people consume content. For example, a Hyderabad-based start-up gaming firm launched India’s first AR mobile game.11

Other examples include a real estate firm in India that offers retina headgear to view properties virtually in 3D, and e-commerce companies that have developed virtual trial rooms using AR to offer a better customer experience.12

9 Nikitin, K., Clough, T., & Pukha, Y. (2016). The essential eight technologies. PwC. Retrieved from http://www.pwc.ru/ru/new-site-content/2016-global-tech-megatrends-eng.pdf (last accessed on 6 November 2017)

10 TechSci Research. (2016). India augmented reality and virtual reality market set to grow at CAGR 55% till 2021 [Press release]. (2016). Retrieved from: https://www.techsciresearch.com/news/1398-india-augmented-reality-and-virtual-reality-market-set-to-grow-at-cagr-55-till-2021.html (last accessed on 6 November 2017)

11 Balagoni, A. (2016). India’s empower labs aspires to be the next Niantic Labs, developer of the latest sensation Pokémon Go. YourStory. Retrieved from: https://yourstory.com/2016/07/empower-labs-pokemon-go/ (last accessed on 6 November 2017)

12 Mehta, I. (2015). Inside the virtual shopping mall: How Indian companies are using VR today. Gadgets 360 (NDTV). Retrieved from: http://gadgets.ndtv.com/internet/features/inside-the-virtual-shopping-mall-how-indian-companies-are-using-vr-today-687429 (last accessed on 6 November 2017)

13 Jayadevan, P. K. (2015). Voonik acqui-hires Trialkart to provide shoppers a virtual dressing room experience. ETtech. Retrieved from https://tech.economictimes.indiatimes.com/news/startups/voonik-acqui-hires-trialkart-to-provide-shoppers-a-virtual-dressing-room-experience/48676930 (last accessed on 6 November 2017)

14 Mannan, L. (2017). VizExperts gives boost to ‘Make in India in Defence’ dream, grows revenue by 60pc in one year. YourStory. Retrieved from: https://yourstory.com/2017/07/vizexperts-startup-defence-war-tactics-tech-solutions/ (last accessed on 6 November 2017)

Department of Defence Production. (2017). Defence public sector undertakings. Retrieved from: http://ddpmod.gov.in/defence-public-sector-undertakings (last accessed on 6 November 2017)

A PwC report on the ‘the Essential Eight technologies’9 states that VR can be termed as computer-generated simulation of a three-dimensional image or a complete environment, within a defined and contained space (unlike AR), that viewers can interact with in realistic ways. VR is intended to be an immersive experience and typically requires equipment, most commonly a helmet/headset.

A tech-driven start-up helps defence forces to plan their operations real-time based on the 3D model built using VR technology. The technology helps defence forces by improving situational awareness, apart from which it has found applications in space research, law enforcement and police forces, as well as in the field of education.13

In the public sector (defence), the Government of India is investing in R&D on using VR for optimising warship design at Mazagaon Dock Limited (MDL).14

AR allows the addition of information or visuals to the physical world via a graphics and/or audio overlay to improve the user experience for a task or a product. This ‘augmentation’ of the real world is achieved via supplemental devices that render and display the said information.


BlockchainAn overview

How India is embracing the blockchain

The blockchain is a new technology that combines a number of mathematical, cryptographic and economic principles to maintain a database involving multiple participants without the need for any third-party validator or reconciliation. The blockchain is a single, shared, immutable, write-only distributed ledger (which uses software algorithms to record and confirm transactions reliably and anonymously) of transactions that is updated when multiple, decentralised

With cryptocurrency usage expanding rapidly, India could potentially become a hub for blockchain technology. However, there might be further considerations that need to be taken into account in adopting the blockchain in India. Some of the scepticism around distributed ledger technology (DLT) and the blockchain may arise from safety loopholes, the need for wide participation from banking institutions and regulatory bodies, limited understanding of the DLT and blockchain, regulatory clarity, etc.

Globally, the financial services industry is a first mover when it comes to the blockchain, and several banks and financial institutions in India are actively evaluating and looking to deploy certain workloads on the blockchain. As per RBI’s recommendation, banks have been encouraged to explore and develop applications for digital currencies and distributed ledgers.16 A large Indian commercial bank successfully implemented a smart contract-based vendor financing solution for one of its large clients in early 2017.

of Indian financial institutions believe that improving the payments/fund transfer infrastructure is the key use case for the blockchain.15

institutions believe that keeping a secure record of a person’s identity, a tamper-proof history of transactions and allowing users to choose who has access to their personal data is the key use case for DLT.17

actors achieve a consensus on the validity of a participant’s new entries. The record of events is shared between many parties and information once entered cannot be altered, as the downstream chain reinforces upstream transactions.

A blockchain is a continuously growing list of records, called blocks, which are linked and secured using hashing, a cryptographic one-way function that is designed to be irreversible.

As there is no set method for selecting which random number to use when hashing, the only real approach to break the chain would be through brute force.

41%Over

Over 47% of Indian financial

15 Belgavi, V., Gandhi, M., Kshirsagar, H., & Others. (2017). FinTech Trends Report – India 2017. PwC and Startupbootcamp. Retrieved from: https://www.pwc.in/assets/pdfs/publications/2017/FinTech-india-report-2017.pdf (last accessed on 6 November 2017)

16 Higgins, S. (2016). RBI calls on Indian banks to explore blockchain. CoinDesk.

Retrieved from: https://www.coindesk.com/rbi-calls-indian-banks-explore-blockchain/ (last accessed on 6 November 2017)

17 Belgavi, V., Gandhi, M., Kshirsagar, H., & Others. (2017). FinTech Trends Report – India 2017. PwC and Startupbootcamp. Retrieved from: https://www.pwc.in/assets/pdfs/publications/2017/FinTech-india-report-2017.pdf (last accessed on 6 November 2017)

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However, the impact of the blockchain is not limited to financial services. It can also come in handy in the public sector (managing public records and elections), healthcare (keeping records anonymous but easily available), retail (handling large ticket purchases such as auto leasing and real estate) and more.

The technology is in an exploratory phase but fast gaining traction as several Indian blockchain companies have sprouted recently and alongside large banking institutions in India, they are aggressively looking at blockchain technology. Over the past two years, start-ups have begun throwing their weight behind blockchain technology. A one-year-old start-up has created a ‘bankchain’

The state government of Andhra Pradesh has partnered with an international start-up and is investing heavily in blockchain technology. It has initiated the pilot project to store, track and monitor land registries in order to prevent illegal practices like bribery in land registrations.18

In 2016, more than 32 blockchain firms were founded in India.20

for banks to explore, build, and implement blockchain solutions in areas such as anti-money laundering, cross-border payments, asset registry and syndication of loans. Similarly, a two-year-old start-up is using the blockchain with AI to enable banks to authenticate and identify a person in a few hours. Simultaneously, many IT players are starting to build applications to help banks use the blockchain.19

18 Browne, R. (10 October 2017). An Indian state wants to use blockchain to fight land ownership fraud. CNBC (Fintech). Retrieved from: https://www.cnbc.com/2017/10/10/this-indian-state-wants-to-use-blockchain-to-fight-land-ownership-fraud.html (last accessed on 6 November 2017)

19 Vishwanathan, V. (2016). Banks are looking to raise their game using technology. LiveMint. Retrieved from: http://www.livemint.com/Industry/eHw5Kw8SAHmBKDnhIzjmbK/Banks-are-looking-to-raise-their-game-using-technology.html (last accessed on 6 November 2017)

20 Belgavi, V., Gandhi, M., & Kshirsagar, H. (2017). Redrawing the lines FinTech’s growing influence on financial services. PwC. Retrieved from: https://www.pwc.in/assets/pdfs/consulting/financial-services/FinTech/redrawing-the-lines-FinTechs-growing-influence-on-financial-services.pdf (last accessed on 6 November 2017)

Banking• Funds transfer can be sped up, allowing instant transactions.

• The banking industry can make use of the blockchain to improve efficiency and reduce costs in securitisation, regulatory compliance and digital wallet services (full service and payment banks).

Entertainment – betting, music• Decentralised betting in online casinos and

sports betting can be taken to the blockchain.

• Musicians can get paid directly by their fans without paying record companies or other platforms a large part of their payouts.

Financial services• The blockchain can be used

to improve services such as trade settlements.

• FinTech companies can use the blockchain to offer remittances and international payments at reduced costs and at greater speeds.

Real estate• The lack of transparency and

problems of bureaucracy, fraud and incorrect public records can be solved using smart contracts.

• Also, tracking, verifying and transfer details can be securely managed for new buyers.

Private transport/ridesharing• The blockchain can be used for peer-

to-peer ridesharing apps, allowing car owners and users to manage terms and conditions without the intervention of third parties.

Insurance• Smart contracts and the

identities of insurers can be managed using the blockchain.

• Contracts dependent on real-time data will rely on the blockchain—for example, crop insurance or telematics for vehicle insurance.

• Also, there is strong potential for the reinsurance market.

Energy• Currently, retail energy

producers contribute to the energy grid and receive incentives.

• The energy market is strictly centralised and is controlled by distribution companies (DISCOMs).

• The blockchain can facilitate peer-to-peer energy transactions.

Healthcare• Hospitals can securely store

health data and share it on request to authorised doctors or medical professionals.

Areas of application –

the blockchain


AI and roboticsAn overview of AI and machine learning (ML)

How India is embracing AI and ML

AI refers to the ability of a computer or a computer-enabled robotic system to process information and produce outcomes in a manner similar to the thought process of humans in learning, decision making and solving problems.

‘Artificial Intelligence is the science and engineering of making intelligent machines, especially intelligent computer programs.’ - John McCarthy, father of AI

Artificial intelligence is an overarching concept that encompasses multiple

There is potential for companies to set up AI-focused innovation centres in India with government encouragement through initiatives such as Digital India and Make in India, which have created a favourable regulatory environment.

Over 36% of large financial institutions are already investing in these technologies, and almost 70% report that they are planning to in the near future.21

AI start-ups in India are venturing into multiple industries, such as e-commerce, healthcare, education, and financial services, and retail and logistics.22

Start-ups are clearly playing a major role in innovating faster than corporates as they do not carry the baggage of IT. This has led to several curious partnerships—a large multinational database company has invested in a niche AI start-up which created a bot that improves the ordering experience. A US-based

computer software company acquired a small Hyderabad-based company that specialises in helping e-commerce players store, process, and visualise data, and use that data to improve conversion rates. Then there are other start-ups that would interest corporates—a bot that functions as a virtual communications assistant that improves customer engagement, converts a customer into a client and provides insights, and a bot that converts all potential queries into leads with its AI engine.

(often overlapping) disciplines that draw upon knowledge and techniques from mathematics, statistics, computer sciences and domain-specific expertise to create models, software programs and tools such as ML, deep learning, predictive analytics, natural language processing and generation, speech analytics, computer vision, robotics, and expert systems. These programs and tools can undertake complex tasks with outcomes that are comparable to, if not better than, traditional manual approaches.

21 Belgavi, V., Gandhi, M., Kshirsagar, H., & others. (2017). FinTech Trends Report – India 2017. PwC and Startupbootcamp. Retrieved from: https://www.pwc.in/assets/pdfs/publications/2017/FinTech-india-report-2017.pdf (last accessed on 6 November 2017)

22 Dalal, M. (2017). 10 standout start-ups taking an AI leap in India. LiveMint. Retrieved from: http://www.livemint.com/Leisure/u7M3e5ymwmGf6QRLaXBoAJ/10-standout-startups-taking-an-AI-leap-in-India.html (last accessed on 6 November 2017)

Artificialintelligencesystem

Learns fromexperience

Uses the learning to reason

Recognises images

Solves complexproblems

Understands languageand its nuances

Createsperspectives


PwC 18

An overview of roboticsAccording to a PwC report,23 robots could either be electro-mechanical machines (hardware/physical robotics) or virtual agents (software robotics) that automate, augment or assist human activities, autonomously or according to set instructions—often a computer program. The basic premise for using robots usually

23 Nikitin, K., Clough, T., & Pukha, Y. (2016). The Essential Eight Technologies. PwC. Retrieved from: http://www.pwc.ru/ru/new-site-content/2016-global-tech-megatrends-eng.pdf (last accessed on 6 November 2017)


revolves around automating repetitive, menial activities that could be performed without requiring human judgement or in cases where the work environment could jeopardise human safety. However, along with AI, robotics is foraying into areas that require sharing of cognitive loads and decision-making authority.

Assisted intelligenceHumans and machines learn from each other and redefine the breadth and depth of what they do together. Under these circumstances, the human and the machine share the decision rights.

Augmented intelligenceEnhancing human ability to do the same tasks faster or better. Humans still make some of the key decisions, but AI executes the tasks on their behalf. The decision rights are solely with humans.

Autonomous intelligenceAdaptive/continuous systems that take over decision making in some cases. But they will do so only after the human decision maker starts trusting the machine or becomes a liability for fast transactions.In this type of intelligence, the decision rights are with the machine and hence it is fundamentally different from assisted intelligence.

The AI continuum


How India is embracing roboticsAccording to the IDC report ‘Worldwide Robotics 2017 Predictions’, 24 35% of the top enterprises in utilities, health, logistics and resources will explore the use of robots to automate operations by 2019 and 30% of the top organisations will either have a chief robotics officer role or have a robotic-specific task within their business.

The government’s Make in India campaign enables foreign companies to invest in India. Many Indian subsidiaries of multinational companies are also using and implementing robotics. Indian companies too are investing in this space to compete with dominant foreign players. The usage of robots and automation at these companies

aims to enable widespread adoption of flexible automation in industry for tedious and mentally fatiguing or hazardous tasks that human labour is ill-suited to perform; and a Mumbai-based start-up aims to introduce state-of-the-art social and service robots that can communicate with human beings and their surroundings.

they are making significant investments in robotics technology, and nearly one-third expect to do so in three years.26

24 IDC. (n.d.) IDC FutureScape: Worldwide robotics 2017 predictions. (n.d.). Retrieved from: https://www.idc.com/research/viewtoc.jsp?containerId=US41118517 (last accessed on 6 November 2017)

25 Philip, L. (2015). Man vs machine: Robots are replacing workers in auto plants in India. Economic Times (Auto). Retrieved from: https://auto.economictimes.indiatimes.com/news/industry/man-vs-machine-robots-are-replacing-workers-in-auto-plants-in-india/49991064 (last accessed on 6 November 2017)

26 Curran, C., Garrett, D., & Puthiyamadam, T. (2017). A decade of digital - Keeping pace with the transformation. PwC. Retrieved from: https://www.pwc.com/us/en/advisory-services/digital-iq/assets/pwc-digital-iq-report.pdf (last accessed on 6 November 2017)

has helped reduce avoidable wastage, resulting in cost savings of 10–20%.25 For example, one of India’s biggest auto manufacturers has invested in around 100 robots at one of its plants. A manufacturing subsidiary of one of the largest business groups in India announced the launch of an India-made robot, developed for micro, small and medium enterprises which require cost-effective robotic solutions for their manufacturing operations.

The Indian market has also seen robotics start-ups coming up across several segments—a start-up providing warehouse automation solutions to India’s e-commerce and logistics companies has built a mobile intelligent ground vehicle for material handling; a Bengaluru-based start-up

15%of business leaders say

PwC 20

Focus areas of emerging technologies within sectorsFinancial servicesAI, ML, the blockchain and IoT have a wide range of use cases in FinTech. In India, however, widespread adoption of these technologies has not yet come to fruition. In the recent past though, large financial services firms and FinTech players have collaborated on proof-of-concept initiatives around the following:

• Use of the blockchain for cross-border remittances, trade finance and vendor financing; and

• Use of AI and ML to automate and streamline workflows in big financial institutions; and

• Use of chatbots to facilitate conversational analytics and more efficient customer service, and to improve personalised financial planning, fraud detection and prevention of money laundering.

AI, ML and robotics have the potential to revolutionise the customer experience, especially at the ‘last mile’, by providing greater levels of personalised service and greatly improving the back-office efficiencies at financial institutions.

The technologies have been used for experimentation and the implementation of a variety of use cases like intelligent recommendation engines for targeted marketing of financial products and automation of underwriting using microeconomic indicators obtained by surfing the web.

An Indian robot manufactured in China, ‘Mitra’, is able to recognise the nationalities of and guide customers in a bank. It has been deployed at the Bengaluru branch of a prominent Indian bank.

Governmental efforts towards promoting the digitisation of financial systems and reducing cash transactions in the economy have benefited the payments industry the most.

56%

56%

56%

40%

40%

24%

12%

8%

4%

Leveraging existing data & analytics

Improve customer retention

Expand products and services

Increase customer base

Differentiate

Reduce costs

Decrease IT costs

Respond to competition faster

Other

FinTech opportunities in India - areas where emerging technologies can catalyze improvements

Source: PwC analysis (FinTech Trends Report – India 2017)

27 PTI. (21 September 2017). Indian robot made in China steals the show at IT event. IBEF. Retrieved from: https://www.ibef.org/news/indian-robot-made-in-china-steals-the-show-at-it-event (last accessed on 6 November 2017)

While the DLT architecture holds promise for a variety of use cases across sectors, currently, advances in DLT are mostly experimental, with few proof-of-concept initiatives underway.

3

PwC 20


‘Among the notable implementations of DLT in the banking sector in India, a large Indian commercial bank successfully implemented a smart contract-based vendor financing solution for one of its large clients in early 2017.’28

Going forward, we expect to see three main applications of DLT that will develop in the Indian market:

Payments/fund transfer infrastructure: Blockchain technology speeds up payments, allowing for nearly instantaneous transactions. DLT can revolutionise cross-border transactions by reducing the number of intermediaries in the process, thereby reducing the cost.

However, a PwC report29 found that a major issue hindering the development of the blockchain in India is that it requires a good amount of cooperation between participating parties for its successful implementation. FinTech start-ups and banks will have to collaborate in order to move DLT out of its nascent stage and into the mainstream. Countries like Australia, China, Canada and Japan have formed regional consortia of banks. India might see such a consortium in the future.

Another possible regulatory challenge could be related to how transactions are reported to the Reserve Bank of India (RBI). In a consortium-based arrangement, governance would likely remain with the consortium rather than individual banks and it would be the same in terms of who should report to the regulator. Further, there might be a debate as to whether the regulating body might have access to transaction-level information, and if so, whether only in a read-only capacity.30

Overall, the expected benefits of emerging technologies in the financial services sector include greater reach of and access to services for a larger segment of the population, furthering the government’s vision of financial inclusion, providing quicker access to information needed for financial planning to individuals and entities, and development of customised products.

Blockchain in financial services - % participants who see the below options as use cases

Source: PwC analysis (FinTech Trends Report – India 2017)



30 Das, S. (2017). An in-depth analysis of how blockchain is unfolding in India. CIO&Leader. Retrieved from: http://www.cioandleader.com/article/2017/03/23/depth-analysis-how-blockchain-unfolding-india (last accessed on 6 November 2017)

Smart contracts: Smart contracts automate the exchange and finalisation of complex agreements such as mortgages, derivatives, insurance policies and letters of credit, where all parties validate the outcome instantaneously.

Digital identity: DLT can be used to keep a secure record of a person’s identity and a tamper-proof history of transactions, and can allow users to choose who has access to their personal data.

50%

47%

41%

34%

25%

22%

22%

19%

19%

12%

Funds Transfer

Digital Identities

Payments Infrastructure

Trade Settlements

Securitisation

Regulatory Compliance

Syndication

Trade Finance

Insurance

Others

PwC 22

InsuranceInsurers are looking to offer solutions targeted towards improving customer retention and the complete customer life cycle with greater engagement. AI, robotic process automation (RPA) and IoT are gaining a foothold within the insurance sector, powered by customer data captured using different sensors. For example, data from wearable devices monitoring health can be used to understand customer behaviour and utilise it in various ways.

A Bengaluru-based firm specialises in providing RPA solutions (among other technologies), having provided their solutions for areas within insurance like claims registration, credit note refunds, policy cancellations, no claims discount verification, policy issuance, etc.31

The benefits of emerging technologies in insurance range from more efficient

Enhancing efficiencies through automated and augmented underwriting

Using robo-claims adjusters to reduce claims processing times and cost

Underwriting transformation AI, robotics and IoT in underwriting

• Early stage: Automating large classes of standardised underwriting in auto, home and commercial (small and medium businesses), life and group insurance policies using:

- IoT sensor data

- Unstructured text (e.g. physician notes)

- Call centre voice data

- Image data using deep learning

• Intermediate stage: Modelling new business and underwriting process using soft robotics and simulation modelling to understand risk drivers and expand classes of automated and augmented underwriting

• Advanced stage: Augmenting large commercial underwriting and life/disability underwriting using AI systems; personalised (behaviour based, circumstantial) underwriting for company/individuals

• Deep QA systems: Using deep question answering techniques to help underwriters look for appropriate risk attributes

• Soft robotics: Use of process mining techniques to automate and improve efficiencies

• ML: Using decision tree analysis, Bayesian networks and deep learning to develop predictive models on risk assessment

• Sensors/IoT: Using home IoT and IIoT data to build operational intelligence on risk drivers that feed into ML techniques

• Simulation modelling: Building deep causal models of risk in the commercial and life product lines using system dynamics models

Claims transformation AI and robotic automation in claims

• Early stage:

- Build predictive models for forecasting high-value payouts, reserving, settlement, litigation and fraudulent claims using historical data.

- Analyse claims process flows to identify bottlenecks and streamline flow, leading to higher company and customer satisfaction.

• Intermediate stage:

- Build robo-claims adjuster by leveraging predictive models and building deep learning models that can analyse images to estimate repair costs.

- Use sensors and IoT to proactively monitor and prevent events, thereby reducing losses.

• Advanced stage:

- Build a claims insights platform that can accurately model and update the frequency and severity of losses of different economic and insurance cycles.

- Apply claims insights to product design, distribution and marketing to improve overall lifetime profitability of customers.

• Soft robotics: Use process mining techniques to identify bottlenecks and improve efficiencies and conformance with standard claims processes.

• Graph analysis: Use graph or social networks to identify patterns of fraud in claims.

• ML: Determine repair costs and use deep learning techniques to automatically categorise the severity of damage to vehicles.

• Sensors/IoT: Mitigate risk and reduce losses by using home IoT and IIoT data to build operational intelligence on frequency and severity of accidents.

• Simulation modelling: Build deep causal claims models using system dynamics and agent-based techniques and link them to products and distribution.

Source: PwC top issues annual report ‘AI in Insurance: Hype or reality?’

Source: PwC top issues annual report ‘AI in Insurance: Hype or reality?’

31 Sarkar, D. (2017). Robotic process automation in insurance industry. Nalashaa. Retrieved from: http://www.nalashaa.com/robotic-process-automation-insurance-industry/ (last accessed on 6 November 2017)

processes and workflows to improved claims forecasting and personalised

policy pricing while also freeing up employees for high-value roles.


For the manufacturing sector, the Industry 4.0 journey for organisations is heavily dependent on IoT integration, cloud platforms for data storage and processing, advanced analytics and ML techniques to derive insights as well as VR and AR devices used for jobs requiring precision. Applications using predictive analytics, ML and IoT that may be used in manufacturing include:

• Robust demand forecasting based on critical demand drivers; improved decision making through structured scenario analysis

• Inventory optimisation using statistical modelling techniques to perform inventory stock level vs lost sales scenario analysis

• Predictive maintenance models using data related to machine performance and downtime history

• Optimisation of manufacturing processes by enhanced monitoring and auto-correction of processes; identifying inefficient machines and processes and adjusting parameters to improve yields

Product manufacturing

• Reduction in cost-of-poor-quality by quantifying implicit and explicit costs associated with poor quality of work in progress (WIP) and finished goods—for example, warranty payouts, cost of raw material scraps, quality inspection costs

A potential start-up in the incubation cell of one of the most prominent engineering institutes in India has come up with a cloud-based software product that identifies friction points and provides real-time actionable insights to the management. The solution has seen multiple live deployments in a few large refineries and steel plants in India.32

The expected benefits from emerging technologies for manufacturers and consumers are flexible, responsive and customised manufacturing and fewer delays and defects in the delivery of finished goods.

32 Ramakrishnan, N. (2017). Helping process industries with machine learning, AI. Hindu BusinessLine. Retrieved from: http://www.thehindubusinessline.com/specials/emerging-entrepreneurs/helping-process-industries-with-machine-learning-ai/article9909790.ece (last accessed on 6 November 2017)

PwC 24

Defence and security and disaster managementThe application of AI in the field of defence and security includes protection of infrastructure such as airports, power plants and economic sectors that are vulnerable to attacks, detecting anomalous behaviour in individuals, and using distributed sensors and pattern recognition to predict infrastructure disruptions through natural/man-made causes.

Along with AI applications in defence, robots can be used to perform jobs which would otherwise be unsafe for humans—such as recovering explosives, detecting mines, space exploration, deep water probes, scouting for hostile territories and capturing video feed, to name a few. VR can be used for training security forces in simulated environments without actual threats.

The expected benefits of emerging technologies in the defence sector include proactive monitoring of threats and potential disruptions of critical infrastructure, and reduced damages to human life.

The electrically powered remotely operated vehicle (ROV) Daksh can locate, handle and dismantle hazardous objects like explosive devices. Although it is not fully automated, developments in AI are currently under way to achieve this.

In the US, the Hummingbird drone (DARPA) is a small unmanned machine used for capturing and sending video imagery.33

Logistics and transportationA key area of AI, IoT and the blockchain is logistical operations. Using geolocation of vehicles and information such as traffic and weather conditions, smart scheduling can overcome jams and allow for real-time route adjustments.

AI for automotive includes potential use cases such as semi-autonomous driver assistance, autonomous fleets for ride sharing, and engine monitoring and predictive maintenance.

AR devices can enable vision-based driver assistance that helps transport products more efficiently while incurring minimal losses. This could make transportation less susceptible to disruptions caused by weather, traffic and unnatural events.

A start-up firm headquartered in Singapore has disrupted logistics and supply chain processes by designing and manufacturing robotic systems for automation at warehouses, distribution centres and fulfilment centres.34

IoT devices such as vehicle tracking systems can bring about enhanced security of assets—namely vehicles and cargo.

33 Kumar, C. (2017). Army to get self-reliant, autonomous robots soon. Economic Times (Defence). Retrieved from: https://economictimes.indiatimes.com/news/defence/army-to-get-self-reliant-autonomous-robots-soon/articleshow/57466543.cms (last accessed on 6 November 2017)

34 Now robots are coming after India’s low-cost labour. (2017). Bloomberg Quint. Retrieved from: https://www.bloombergquint.com/technology/2017/10/04/now-robots-are-coming-after-indias-low-cost-labour (last accessed on 6 November 2017)

Overall, the emerging technologies are expected to bring about greater flexibility, customisation and choice in how goods and people move from one place to another while improving speed and convenience.


Travel and tourism

Agriculture

In the travel and tourism industry, VR systems can be used to more efficiently train airline pilots and staff using simulated environments. The blockchain can reduce cost and improve the efficiency of transactions such as booking tickets for airlines, railways and accommodation, so that travel and transportation operators can pass on the savings to consumers. IoT infrastructure such as radio-frequency identification (RFID) tagging and image sensors at transportation hubs can improve terminal operations by allowing for seamless check-ins, man-power assignment for handling peak load traffics at ‘hot spots’, and facility surveillance for added security and threat mitigation.

Farming can greatly benefit from intelligent solutions driven by IoT and AI techniques that enable smarter production, processing, storage, and distribution and consumption mechanisms. Site-specific and timely data about crops facilitates the application of appropriate inputs on fertilisers and chemicals, crop health and disease, spreads, monitoring health of farm animals, and autonomous farm machines such as harvesters, thus improving the yield per square unit of land.

One of the largest technology firms is working with the Government of Karnataka to develop a multivariant agro-commodity price forecasting model using AI/ML algorithms based on inputs like sowing area, production, and yield and weather data sets on its platform for farmers to make informed marketing decisions.36

35 Shekhar, D. (2017). Start-ups use AR to help people get a glimpse of Bengaluru’s history. Economic Times (Technology). Retrieved from: https://economictimes.indiatimes.com/magazines/panache/start-ups-use-ar-to-help-people-get-a-glimpse-of-bengalurus-history/articleshow/61006243.cms (last accessed on 6 November 2017)

36 Kulkarni, V., & Ganesh, V. (2017). Farmers look to harvest the fruits of AI. Hindu BusinessLine. Retrieved from: http://www.thehindubusinessline.com/economy/farmers-look-to-harvest-the-fruits-of-ai/article9928335.ece (last accessed on 6 November 2017)

An AR platform is launching a heritage trail that will help people access images, timelines, video and audio to provide tourists a view of Bengaluru’s history. The mobile application scans structures, uses image and object recognition, and real-time matching to display the information.35

PwC 26

The operator and parent company of one of India’s largest retail chains has launched a consumer and digital lab that will focus on new innovative technologies such as AI, IoT, robotics and the blockchain for solutions in the consumer space. The objective behind this is to enhance retail experiences in areas like payments, unique customer identification, personalised exchanges and supply chain automation.37

Globally, an example of AI integration in the education sector is an AI development company that has created smart content services for secondary education that helps disseminate textbook content as ‘smart’ study guides containing summaries and flashcards.38

The expected benefits from emerging technologies for the retail sector include on-demand tailoring and customisations and greater availability of desired products, time

AI-enabled robotic teaching assistants connected over the cloud will help standardise teaching curriculums and knowledge imparted to students. This could also help solve the problem of shortage of teachers in remote locations.

The benefits of emerging technologies for the education sector include personalised coaching, improved relevance of course coverage by continually updating academic literature to encompass the latest developments, and improved liaison of academic institutes with industry professionals for imparting ‘job-focused’ skill sets.

Education

Consumer goods and retailAI-powered products and services such as digital assistants, customer service bots, and recommendation engines for e-commerce and entertainment portals are just a few examples of emerging technologies making inroads into the lives of consumers. Additional uses for AI applications include personalised design and production, deep learning for predicting customer demand and orders, and efficient inventory and delivery management.

In the retail store setting, shopper-friendly robots can help assist shoppers by directing them towards the appropriate product stocked in a particular section of the store.

Some AR applications allow people to simply point their smartphone camera at products for the application to retrieve information on product specifications and provide options to purchase the same.

saved through intelligent product recommendations, and less time spent exploring shelves, catalogues and websites for the required products.

37 Das, S. (2017). An in-depth analysis of how blockchain is unfolding in India. CIO&Leader. Retrieved from: http://www.cioandleader.com/article/2017/03/23/depth-analysis-how-blockchain-unfolding-india (last accessed on 6 November 2017)

38 Faggella, D. (2017). Examples of artificial intelligence in education. TechEmergence Retrieved from: https://www.techemergence.com/examples-of-artificial-intelligence-in-education/ (last accessed on 6 November 2017)


In the healthcare sector, AI-enabled robots can assist surgeons in conducting precise surgical procedures. AI platforms have already established their credibility as expert systems for advising medical practitioners on the diagnosis of diseases like cancer and recommending treatments. Other use cases for AI include early identification of potential pandemics and tracking disease incidence to contain spread, and image processing and diagnostics for radiology and pathology.

Cloud technologies can be of great value when it comes to the storage and access of patient data such as electronic medical records, electronic health records and medical imagery.

VR can be used for training medical students by simulating conditions which are otherwise difficult to recreate in laboratory environments. At the same time, AR can be used to better diagnostic and pathological disbursements.

Healthcare and medicine

A prominent technology giant has been involved in helping Indian healthcare providers adopt the cloud, analytics and ML. Large Indian hospital chains have used IaaS to bring in agility—for example, making patient data available to all employees across the chain and to third-party hospitals.39

The transformative benefits from the above include more accurate diagnoses, personalised treatment in the short term, and more advanced

39 Sangani, P. (2016). Microsoft helping Indian healthcare providers adapt cloud, analytics. Economic Times (Healthcare). Retrieved from: https://economictimes.indiatimes.com/industry/healthcare/biotech/microsoft-helping-indian-healthcare-providers-adapt-cloud-analytics/articleshow/51786270.cms (last accessed on 6 November 2017)

cases like robotic implants over the longer term, thus leading to overall improvements in the wellness and life span of citizens.

PwC 28

GovernmentFor public sector entities such as large energy, power and utility companies, emerging technologies such as AI and ML hold high potential in the areas of smart metering—real-time information on energy usage which reduces wastage and loss, efficient grid operation and storage and predictive infrastructure maintenance, thus benefiting companies and consumers through cost-effective supply and usage of energy and leading to more secure supplies and fewer outages.40

Customers can tailor their energy requirements through the use of smart meters and thus reduce costs. The data generated in the process could be used for customised tariffs and more efficient supply.

AI, ML and IoT form a crucial component of the government’s vision of smart cities and smart industrial zones vision. Cities provide a wealth of information that can be captured through various sources—mass transportation tickets, cameras and sensors on roads, pavements, airports, malls, tax information, police filings etc.—thus creating endless possibilities for improving the quality of services for citizens..

The 2015 Draft Policy on IoT (revised) published by the Department of Electronics & Information Technology (DeitY), Ministry of Communication and Information Technology, Government of India, emphasised the development of IoT in India to support the government’s plan of developing 100 smart cities under the Digital India programme.

Some of the key aspects of smart cities highlighted were smart parking, intelligent transport systems, smart urban lighting, waste management, smart city maintenance, telecare, citizen safety, smart grid, smart energy and water management.41

Deep learning algorithms can assimilate the volumes of data captured using IoT devices and generate actionable insights. They make it possible to figure out patterns of footfall in public spaces over a timeline, peak loads of vehicles and parking lots, and to identify increased incidence of crime at locations, among various other applications.42 One of the most prominent outcomes would be monitoring real-time resource usage for public facilities—power, heat, water, fuel, etc.,—and autonomously adjusting inputs based on usage patterns, thus leading to significant savings.

40 Rao, A., & Verweij, G. (2017). Sizing the prize - what’s the real value of AI for your business and how can you capitalise? PwC. Retrieved from: http://www.pwc.com/gx/en/issues/analytics/assets/pwc-ai-analysis-sizing-the-prize-report.pdf (last accessed on 6 November 2017)

41 Department of Electronics & Information Technology (DeitY) Ministry of Communication and Information Technology. (2015). Draft Policy on Internet of Things. Retrieved from: https://www.mygov.in/sites/default/files/master_image/Revised-Draft-IoT-Policy-2.pdf (last accessed on 6 November 2017)

42 Walker, J. (2017). Smart city artificial intelligence applications and trends. TechEmergence. Retrieved from: https://www.techemergence.com/smart-city-artificial-intelligence-applications-trends/ (last accessed on 6 November 2017)


Social and economic impact of emerging technologies

4

Social impact‘Leave no one behind’ has been the cornerstone of India’s sustainable and inclusive growth. The Government of India has strongly committed itself to the 2030 Agenda for Sustainable Development that was established at

Connecting beyond boundaries

New ways of working and collaborating

Cloud technology will result in more small- and medium-sized businesses going global. The cloud will help these businesses enjoy the benefits

Access to data anytime and anywhere, which was earlier a privilege, is slowly becoming an expectation from consumers. In the education sector, the cloud is allowing students to access knowledge from anywhere, participate in online group activities as well as utilise cloud storage to streamline assignments and their submissions, thus avoiding paper usage, which helps in reducing the carbon footprint. In addition, the presence of AI-enabled robotic teaching assistants could help teachers reduce their workload, thus allowing them to give students personal attention. Eventually, this technology could also be used in schools in remote locations which are facing a shortage of teachers.

A professor in a leading US tech university built an AI teaching assistant in order to reduce the amount of work to be done by him and his teaching assistants.43

AR and VR are also helping to change the world of simulations, be it for medical operation procedures or training security personnel. Users are able to get a high level of visualisation by building information models and then loading them onto VR systems. However, this also brings in concerns with regard to the privacy of data as this technology could reveal more than what an individual signs up for. The huge swathes of data generated for VR would require proper security and yet be transparent enough for the population to rest assured that their data is safe.

43 Maderer , J. (2017). Jill Watson, Round Three - Georgia Tech course prepares for third semester with virtual teaching assistants. Georgia Tech News Centre. Retrieved from: http://www.news.gatech.edu/2017/01/09/jill-watson-round-three (last accessed on 6 November 2017)

the UN General Assembly Summit in September 2015. Towards this agenda, the Indian Government has started utilising emerging technologies as the foundation for large projects

that are expected to be beneficial to the masses. Aadhaar, an example of social inclusion, was developed using emerging technologies, including the cloud.

of scale, efficiency and low cost, which in turn will help them provide their services to all communities and sections of society.

PwC 30

Cultural impact

Reaching the masses

Emerging technologies are also at the forefront when it comes to educating the population on social issues. Ram Devineni, a documentary filmmaker, and Dan Goldman, an illustrator, have created India’s first AR-enabled interactive comic book titled Priya’s Shakti.44 The comic book is about a rape survivor turned superhero who champions women’s rights. They have used augmented reality to help readers empathise with victims of acid attacks and promote awareness on social media by developing an app that allows users to animate certain panels of the comic by selecting various filters. AR also helps in geolocation and geospatial mapping by providing augmented information on facilities such as emergency response infrastructure.

Combining AR and VR can create virtual classrooms, wherein students can virtually go to places, see and learn things without actually having to move out of the comfort of their classrooms. The teacher too can use this as an aid to explain complex concepts.

Other areas where AR can help improve public safety and security could be law enforcement, wherein police officials could use AR devices and applications (smart glasses, head displays, in-vehicle displays, etc.) to preemptively access location-specific data and identify potential threats and criminal activity.45

Inclusion has been another area where emerging technologies are making inroads. The days of farmers being victims of information asymmetry will soon be gone. With the advent of IoT and the cloud, advisory services are available to farmers on their mobile devices. Smart farming helps farmers with the preparing the soil, selecting the right kind of seeds, and nurturing and harvesting them with continuous updates on the condition of the soil, weather, and fluctuations in the prices of agricultural inputs and commodities. This helps promote the government’s intention of empowering the masses.

The blockchain, another emerging technology, is helping with financial inclusion in the country. This technology supports transactions that include multiple assets, eliminates third-party involvement, helps secure transactions through DLT and helps reduce a bank’s infrastructure costs and the settlement time involved in inclusion. It is also expected to bring in speed and transparency into a system, thus helping the government in its vision of transparency and good governance in India.

Connected data from social IoT devices could bridge the information gap and empower the masses.

44 Dodson, C. (28 October 2016). Acid attacks and augmented reality: How Priya’s Mirror is using tech to change India. Fast Company. Retrieved from https://www.fastcompany.com/3064317/acid-attacks-and-augmented-reality-how-priyas-mirror-is-using-tech-to (last accessed on 6 November 2017)

45 Curtin, G. (2017). 6 ways augmented reality can help governments see more clearly. World Economic Forum (WEF). Retrieved from: https://www.weforum.org/agenda/2017/02/augmented-reality-smart-government/ (last accessed on 6 November 2017)


Economic impactIndia has become a region of interest across the world due to its large population (rank 3 in market size according to the Global Competitive Index of the World Economic Forum46) and its impressive economic growth over the years. However, the same report also ranks India 107 (of 137 countries) on technological readiness, which is an efficiency enhancer. This shows a huge improvement opportunity for India with respect to emerging technologies which will help in transforming the nation’s overall working efficiency and information dissemination.

India’s public cloud services market is projected to grow by 38% in 2017 to reach 1.81 billion USD, driven by IaaS.47 The cloud IaaS model can help SMEs with access to latest infrastructure, thus reducing their in-house infrastructure costs. PaaS supports developers with different development platforms and, in turn, helps companies save on heavy capital expenditure. SaaS adoption helps companies steer clear of the hassles that come with the maintenance of IT applications, thus resulting in cost savings.

India’s public cloud services market is projected to grow by 38% in 2017 to reach 1.81 billion USD. By 2021, the cloud IaaS market will exceed 2.1 billion USD in end user spending.48

The Smart Cities Mission of India envisions developing an area within 100 cities in the country as model areas, with funding from the Union Government and consortia of state government and municipalities.51

According to a report by NASSCOM, the IoT market in India is poised to reach 15 billion USD by 2020, accounting for nearly 5% of the total global market.49 Further, India has also seen numerous start-ups offering solutions in the IoT space which have garnered good investments. The IoT start-up space in India has seen approximately 60 million USD in cumulative investments since 2014, with great interest being shown in consumer wearable devices and connected homes.50 Along with the Government of India’s push towards smart cities, IoT can also be a strong pillar in India’s future economic and information growth.

India is ranked among the top 3 countries implementing automation as a part of their core business according to a survey conducted by Chartered Institute of Management Accountants (CIMA), a UK-based professional body with a presence across select European, African and Asian countries.52 India has also seen approximately 170 start-ups in the AI space which are attracting the interest of investors. This is further propelled by the government’s flagship initiatives of Make in India and Start-up India. This shows great potential for AI/ML skilling in India. Large IT services companies are already coming up with their AI platforms, while smaller niche AI start-ups are tracking specific problems, thus creating a holistic ecosystem for AI to thrive in India.

India is also looking at potential cost savings that can be achieved by utilising blockchain technology. In a recent white paper, the Institute for Development and Research in Banking Technology, the research arm of the Reserve Bank of India, noted that: ‘Blockchain technology (BCT) has the potential to address certain limitations of the current processes by modernising, streamlining and simplifying the traditional siloed design of the financial industry infrastructure with a shared fabric of common information. The advantages brought by BCT can be broadly classified into cost savings, efficiency and transparency.’53

46 World Economic Forum. (2017). The Global Competitiveness Report 2017–2018. Retrieved from https://www.weforum.org/reports/the-global-competitiveness-report-2017-2018 (last accessed on 6 November 2017)

47 IANS. (2 February 2017). Public Cloud market to hit $1.8 bn in India in 2017: Gartner. Business Standard. Retrieved from http://www.business-standard.com/article/news-ians/public-cloud-market-to-hit-1-8-bn-in-india-in-2017-gartner-117020200318_1.html (last accessed on 6 November 2017)


49 NASSCOM. (n.d.). IoT in India - The next big wave. Retrieved from http://www.nasscom.in/knowledge-center/publications/iot-india-next-big-wave (last accessed on 6 November 2017)

50 NASSCOM. (n.d.). IoT in India - The next big wave. Retrieved from http://www.nasscom.in/knowledge-center/publications/iot-india-next-big-wave (last accessed on 6 November 2017)

51 Smart Cities Mission. (n.d.). Official site of Smart Cities Mission, Ministry of Housing and Urban Affairs, GoI. Retrieved from: http://smartcities.gov.in/content/innerpage/fund-release.php (last accessed on 6 November 2017)

52 Singh, P. (2017). India is winning the global AI race. Here’s how. Analytics India Magazine. Retrieved from: https://analyticsindiamag.com/india-stand-global-race/ (last accessed on 6 November 2017)

53 Institute for Development and Research in Banking Technology. (2017). Applications of blockchain technology to banking and financial sector in India. Retrieved from https://monetago.com/wp-content/uploads/2017/01/BCT.pdf (last accessed on 6 November 2017)

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Threats and downsides – mitigation and change management

Security, privacy and theft

With India rapidly investing in and capitalising on emerging technologies, there has been a rise in the number of

As AI and ML feed on data, companies may end up collecting large volumes of user data, often without users’ consent. Also, IoT devices generate huge volumes of sensitive information which can be acquired by illegal parties and sold indiscriminately for profit. This information can be used to draw deeply personal inferences about individuals. Further, information flow among connected devices can be disrupted or the equipment can be physical tampered/interfered with.

Similarly, a major concern with the blockchain relates to the storage of data, which could be vulnerable to data privacy breaches. If the data were somehow tampered with, one would only be able to tell by comparing the hashed on-chain version with the off-chain version. However, this could be partially mitigated by keeping data confined within a subset of nodes.

Since IoT security and privacy is a nascent discipline, most businesses lack the expertise and resources to design, deploy and operate a programme on their own.

46% of respondents said they will invest in security for IoT over the next 12 months.55

Nonetheless, many organisations are starting to take action on both the security and privacy fronts. PwC’s Global State of Information Security Survey® 201854 revealed that 35% of the respondents have an IoT security strategy in place, and an additional 28% are in the process of implementing one. Further, they plan to fund initiatives such as the development of new data governance policies, device and system interconnectivity and vulnerability, employee training, and uniform cyber security standards and policies.

Changing employment paradigmsAI and robotics have accelerated large-scale automation of many job roles. However, they have also simultaneously created many job positions in the fields of data science,

technological challenges. Before we begin using these technologies, it is imperative for us to first understand

how they work and then create guidelines on their usage.

With the ever-increasing number of devices in an IoT ecosystem, the probability of encountering a cyber incident is scaling up. IoT security programmes are rare within organisations, owing largely to the lack of standards or frameworks for implementation, thereby making it a key area for R&D and investment by organisations.

ML, engineering and IT for developing and maintaining software and applications using AI techniques. Therefore, the technology sector has a role to play in helping society become

more aware and accepting of the socioeconomic shifts in job roles in the future as machines start performing certain tasks that were previously carried out by humans.

54 PwC. (2017). Uncovering the potential of the Internet of things. Retrieved from http://www.pwc.com/gx/en/issues/cyber-security/information-security-survey/assets/gsiss-report-internet-of-things.pdf (last accessed on 6 November 2017) (The results discussed in the report are based on responses of more than 10,000

55 CEOs, CFOs, CIOs, CISOs, CSOs, VPs and directors of IT and security practices from more than 133 countries.)

Krishnan, S., Burg, D., & Joyce, S. (2017). Uncovering the potential of the Internet of Things. PwC. Retrieved from: http://www.pwc.com/gx/en/issues/cyber-security/information-security-survey/assets/gsiss-report-internet-of-things.pdf (last accessed on 6 November 2017)

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of top CEOs/management have concerns regarding the availability of key skills

– PwC’s 20th CEO survey

Cultural change – overdependence on technologies

Managing change at the workplace

87%

The advent of emerging technologies such as AI-powered services, chatbots and recommendation engines could have long-term ramifications. These technologies could make people reluctant to physically engage in activities and instead rely on more convenient yet less experientially rich avenues to fulfil their daily requirements.

According to PwC’s 20th CEO Survey,56 56% of CEOs in India are exploring the benefits of humans and machines working together. However, the availability of key skills (innovation, problem-solving methodologies, creativity, leadership and adaptability) in the country is the key concern for organisations’ growth prospects. Hence, companies should invest in building distinctive capabilities that give them a competitive edge. Further, there is a gap between aspiration and execution in India. This year, 64% of CEOs stated that it is difficult for their organisations to recruit people with problem-solving skills. Similarly, 74% find it challenging to recruit talent that is innovative and creative, and 66%

56 Mehra, A., & Som, N. (2017). 20th CEO survey - Being fit for growth. PwC. Retrieved from: http://www.pwc.in/assets/pdfs/publications/ceo-survey/20th-ceo-survey-being-fit-for-growth.pdf (last accessed on 6 November 2017)

The emerging technologies could, however, create new opportunities for teenagers and the elderly to contribute to a greater extent towards economic activities and wealth creation, and, in the process, sustain themselves and reduce the economic burden on the mainstream workforce.

said that it is difficult to recruit talent that is adaptable. These data points reinstate the fact that the availability of a skilled workforce—not just in the area of technical skills required to do the job but also in terms of necessary behavioural and leadership traits—continues to be a pressing issue in India. The following chapter looks at the steps that organisations and/or governments should take to develop the skill sets of their workforces so that they are able to appropriately use emerging technologies.

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Skill development imperatives for emerging technologies

The emergence of new technologies is resulting in the reclassification and rebalancing of work. Skilled employees responsible for performing tasks that can’t be completely automated are becoming more vital, thus encouraging employers to look for individuals who are creative, innovative and imaginative.

This resonated in the results of our 20th CEO survey, which states that while business leaders are keen to maximise the benefits of automation, a majority (52%) of them are also planning to expand their workforce in the coming 12 months.

The breakneck pace of innovations in emerging technologies has posed a huge challenge for academics and businesses, leading to the need for trained personnel to effectively create, maintain and permeate AI, IoT and cloud solutions and embed them in robots and AR and VR devices. This translates into two things:

• An urgent need for skilled professionals who understand the sector and its data and those who are able to analyse it effectively;

• The need for individuals with deep technology skills, which form the backbone of innovations in AI and IoT.

Emerging technology requirements – managing the change

By reassigning employees doing routine, methodical tasks, machines actually amplify the comparative advantage of those workers with problem solving, leadership, emotional intelligence (EQ), empathy and creativity skills.57

According to PwC’s 20th CEO Survey, 52% CEOs are already exploring the benefits of humans and machines working together and 39% are considering the impact of AI on their future skills needs.58

‘Innovate UK’— an initiative of the Government of the UK— has set up not-for-profit ‘Catapult’ centres which help connect research and academic communities with businesses.59

While data science and programming competencies are invaluable skills for new-age tech (AI, VR and IoT), specific skill sets on algorithms—the base of these technologies—are emerging as game changers. The fundamentals of AI, IoT and the cloud are based on data and how effectively one can create and leverage the continuous flow of data.

57 Stubbings, C., Williams, J., & Brown, J. (2017). Workforce of the future - The competing forces shaping 2030. PwC. Retrieved from: https://www.pwc.com/gx/en/services/people-organisation/workforce-of-the-future/workforce-of-the-future-the-competing-forces-shaping-2030-pwc.pdf (last accessed on 6 November 2017)

58 PwC. (2017). You can’t have a machine age without humans. Retrieved from: https://www.pwc.in/press-releases/2017/you-cant-have-a-machine-age-without-humans-pwc-report.html (last accessed on 6 November 2017)

59 Innovate UK. (2017). How catapult centres can help your business. (2017). Retrieved from: https://www.gov.uk/government/collections/innovate-uk-how-catapult-centres-can-help-your-business (last accessed on 6 November 2017)

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The expected skill sets and workforce rearrangement in the near future can be classified into two categories, namely:

• Technology, algorithmic and programmatic know-how: This is required to conceptualise, design and implement systems and applications that make use of either one or more emerging technologies to transform business processes and workflows.

• Strategic and operational decision making: This would be required to put into action insights gained from applications using emerging technologies for enhancing performance, reducing costs, gaining competitive advantages and furthering social causes.

Is there a demand for skilled personnel with the growth of emerging technologies?The demand for skills in emerging technologies such as AI, IoT and data science has grown substantially over the last 3–5 years. These skills are no longer confined only to the technology sector but are also of importance in banking, retail, healthcare and other sectors.60

Leaders of AI, ML and IoT start-ups and established firms have indicated61 time and again that they are facing a dearth of applicants for their advertised positions. India has around 170 start-ups focused purely on AI. Entrepreneurs, however, are stuck due to the shortage of expertise and the lack of talent in robotics, ML, advanced analytics and IoT.

While India is home to a large number of engineers graduating from colleges every year (with a big proportion of them specialising in IT), their skill sets—a result of their curriculum—are centred more on traditional software and applications as opposed to R&D in the field of new-age technology.

India—an arguably late entrant into the emerging technology space—will be required to expedite the skilling of its talent base to match the current level of demand.

Moreover, while recruiting data analysts and data scientists, companies often look for candidates with PhDs. In order to engage the right candidate, there is a need for better collaboration between academia and businesses.

The demand for IoT talent rocketed by 304% between 2014 and 2017 – Talent Supply Index (TSI) of Belong, a Bengaluru-based hiring platform62

Co-founders of a prominent AI firm in India indicated that nearly 40% of their working time is spent searching for the right talent.63

Only 4% of AI professionals in India have actually worked on cutting-edge technologies like deep learning and neural networks, which are the key ingredients for building advanced AI-related solutions. – Belong, a recruitment start-up64

60 Narayanan, C. (2017). The skills shortage. The Hindu Business Line. Retrieved from: http://www.thehindubusinessline.com/opinion/columns/chitra-narayanan/the-skills-shortage/article9799112.ece (last accessed on 6 November 2017)

61 Punit, I. S. (2017). Indian engineers need to stop being so afraid of the term “artificial intelligence”. Quartz India. Retrieved from: https://qz.com/911261/indian-engineers-need-to-stop-being-so-afraid-of-the-words-artificial-intelligence/ (last accessed on 6 November 2017)

62 IANS. (21 June 2017). Acute talent shortage in AI, IoT industry, shows survey. Economic Times (Technology). Retrieved from: https://tech.economictimes.indiatimes.com/news/technology/acute-talent-shortage-in-ai-iot-industry-shows-survey/59254799 (last accessed on 6 November 2017)

63 Punit, I. S. (2017). Indian engineers need to stop being so afraid of the term “artificial intelligence. Quartz India. Retrieved from: https://qz.com/911261/indian-engineers-need-to-stop-being-so-afraid-of-the-words-artificial-intelligence/ (last accessed on 6 November 2017)

64 IANS. (21 June 2017). Acute talent shortage in AI, IoT industry, shows survey. Economic Times (Technology). Retrieved from: https://tech.economictimes.indiatimes.com/news/technology/acute-talent-shortage-in-ai-iot-industry-shows-survey/59254799 (last accessed on 6 November 2017)

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Are the emerging technologies difficult to pick up?

Are individuals willing to develop skills?

74% of employees are ready to learn new skills or completely retrain in order to remain employable in the future. They believe that it’s their own responsibility to update their skills rather than relying on any employer.66

‘The secret for a bright future seems to me to lie in flexibility and in the ability to reinvent yourself. If you believe that the future lies in STEM skills and that interests you, train for that. But be prepared to rethink if the world doesn’t need so many programmers. If you are a great accountant who has prospered by building strong client relationships, think how you can apply that capability, without necessarily having to be an accountant. Think about yourself as a bundle of skills and capabilities, not a defined role or profession.’

– Jon Williams, Joint Global Leader, People and Organisation, PwC Australia68

When it comes to new-age technologies such as AI, robotics, IoT, the cloud, blockchain, AR and VR, it is safe to say that they only have a minimal hangover of legacy technologies such as language, platform or system. Hence, one may, if he/she chooses, pick up these new-age technologies with proper study while skimming through traditional programming or software applications. However, it might help to have certain basic knowledge of programming to speed up the learning process.

It might prove to be cost-effective and rewarding for organisations to strategically partner with

Considering the pace at which technology is undergoing change, it may be difficult to predict the skills that will be needed even five years from now. Hence, employees and businesses need to be ready to adapt. Inevitably, most of the responsibility will be on an individual, requiring him/her not only to adapt to organisational change but also be willing to acquire new and upcoming skills and capabilities throughout his/her lifetime. This will help him/her in learning new tasks and even retraining

himself/herself at the middle of his her career.

Based on a PwC 2017 survey of close to 10,000 members, 65% of the general population based in China,

A large multinational chip and processor making company set up IoT centres in academic institutions in India to empower them with the latest skills and encourage research in these fields in the institutions.65

academic institutions, wherein experts in the fields of AI, IoT, the cloud and the blockchain may be brought in to train employees who are new to these technologies and conduct trainings in a step-by-step approach, diffusing knowledge in a way that helps employees quickly understand, retain and apply as much knowledge as would be required to perform the job at hand.

While it would be different from a deep academically rooted approach to skill development in emerging technologies, companies might do well to establish such a balance between skill-related investments and tangible outputs.

65 PTI. (9 October 2015). Intel to set up 100 Internet of Things centres in India. Gadgets Now. Retrieved from: https://www.gadgetsnow.com/tech-news/Intel-to-set-up-100-Internet-of-Things-centres-in-India/articleshow/49285627.cms (last accessed on 6 November 2017)


67 PwC. (2017). Workforce of the future - The competing forces shaping 2030. Retrieved from https://www.pwc.com/gx/en/services/people-organisation/workforce-of-the-future/workforce-of-the-future-the-competing-forces-shaping-2030-pwc.pdf (last accessed on 6 November 2017) (PwC survey of 10,029 members of the general population based in China, Germany, India, the UK and the US – base all those who are not retired: 8,459)


Germany, India, the UK and the US think that technology will improve their job prospects in the future.67


The government’s push towards upskillingThe Government of India, through its Make in India and Digital India initiatives, has indicated the importance of deep expertise in emerging technologies as the building block for tomorrow’s workforce. This could be achieved seamlessly by incorporating the said skill sets into the existing programmes that have been initiated as part of the Skill India initiative.

The Government of India has already introduced schemes which aim to enhance the employable skills of a large number of wage earners in the next few years. The Indian Institute of Skills Development (IISD) has been

‘Skill India’ is already on the path to helping India’s population skill itself by:

• Easing the routes to training and retraining• Encouraging and incentivising adaptability • Inculcating skills such as leadership,

creativity and innovation

established for the same purpose. State governments are providing subsidised training, special coaching programmes and career talks to jobseekers. These form the bedrock

for the government to extend these initiatives across different segments of the workforce, including emerging technologies-based reskilling.

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Business organisationsAs the use of emerging technologies increases within companies, it would help if employees know about the complete scenario rather than only their function.

A unique way for tech companies to increase the number of jobs available to people could be by using emerging technologies such as cognition and natural language processing and generation to break down interconnected systems and tasks and, as a result, sieve out creative and innovative tech jobs for humans.

Innovation will play a significant role for businesses in the future. Fostering a culture of innovation driven by rewards and recognition has become vital for organisations to identify solutions to their challenges and use technology to address them.71

Timely skill development of employees through training will ensure a smooth transition into new roles within a digitally transformed organisation.

Educational institutionsConsidering the changes in the technology landscape and in companies, academic institutions need to play a role in skill development by creating an interface for students to connect with industry professionals. Academic institutions can also encourage and inspire students to work in the industry sector on different real-life challenges pertaining to current technologies and practices. These initiatives will help organisations to evaluate their prospective employees and students to get more hands-on industry experience.

The Beijing-Dublin International College awards a BE in IoT. The programme combines the study of electronic engineering and computer science, with an emphasis on Internet technologies, wireless communications, sensor devices and cloud computing.69

The Institute for Artificial Intelligence helped found the undergraduate major in Cognitive Science and has coordinated that major since 1999 at the University of Georgia.70

The government can also encourage educational institutions by incentivising the inclusion of emerging technologies in their curriculum and supporting development of the aforementioned infrastructure.

69 BE IoT Engineering. (n.d.). Course information on Beijing-Dublin International College. Retrieved from: http://www.ucd.ie/bdic/study/beiotengineering/ (last accessed on 6 November 2017)

70 Institute for Artificial Intelligence, University of Georgia. (n.d.). AB in cognitive science. Course information. Retrieved from: http://www.ai.uga.edu/content/ab-cognitive-science (last accessed on 6 November 2017)

71 Basu, A., Chakrabarti, D., & Chakrabarti, A. (2017). Success stories and the road ahead Technology-enabled manufacturing. PwC. Retrieved from: https://www.pwc.in/assets/pdfs/publications/2017/success-stories-and-the-road-ahead-technology-enabled-manufacturing.pdf (last accessed on 6 November 2017)

Another activity that academic institutions could undertake is upgrading their curriculum, workshops and laboratories with the current industry requirements. Advanced technology infrastructure and equipment have been installed in a few premier institutions. This should be replicated across other institutions as well.

This would equip the new generation of graduates with knowledge and capabilities required in the emerging technology age.


Policy planning prioritiesCreating a conducive environment for developments in emerging technologiesOne of the key areas for policy planning around emerging technologies is to create an ecosystem that is supportive of research, innovation and commercialisation of applications. Start-ups specialising in AI, ML and IoT have contributed significantly to innovation in these fields over the last few years.

Digital technologies are sure to create many opportunities for start-ups and SMEs, as they have done in recent years, allowing them to set up new revenue streams around these new technologies. These start-ups and SMEs can become suppliers of sensors and comprehensive solutions that combine the capabilities of emerging technologies to create stand-alone or integrated applications that could then be adopted by businesses and consumers.

Other than generating new revenue streams, they can take advantage of new technologies to produce quality products at cheaper costs. As high initial investments in technologies pose a big challenge, policies could be created to assist these start-ups and SMEs by incentivising funding from financial institutions, domestic private investors and foreign direct investment (FDI).

Start-ups and SMEs can bring down their capital investment by using technology on a shared basis. Established companies can bring affordable technology solutions to start-ups and help them upgrade and adopt new technologies in a short span of time. In turn, these start-ups could act as the technology research arm of one or more established firms and supply developed applications at lower costs to these larger firms than they would to other players. This would help in the formulation of ‘symbiotic clusters’ of emerging technology innovations. The same could hold true for groups of technology start-ups sharing infrastructure and technology resources.

A more direct approach by central and state governments could be fiscal and non-fiscal incentives. Non-fiscal incentives may include full or partial exemptions from acts related to

The Department of Industrial Policy and Promotion (DIPP) is formulating an industrial policy for encouraging Indian branded products with higher value addition. The thematic focus groups under the policy touch upon technology and innovation, skills and employability, infrastructure and investment, among others.

A task force on AI has been constituted to provide inputs in the development of the policy.72

wages, inspections, shift operations, etc. Fiscal incentives may include partial reimbursements of lease rentals, bandwidth and connectivity, coverage of fixed power costs to the entity, full or partial reimbursements of set-up and operational costs such as stamp duty, transfer duty, registration fees, patent filing costs, quality certifications, skill upgradation and training costs, subsidisation of capital investments, property taxes, insurance premiums, and maintenance charges.73

Further, policy initiatives could include hosting of industry events to recognise and award breakthrough innovations in AI, ML, robotics, IoT, the cloud, and VR and AR. This will garner participation from established firms, SMEs, start-ups, institutional teams and amateur developers, thus building awareness and enthusiasm towards different technologies in the process.

72 IBEF. (2017). DIPP to release new industrial policy by October, will review FDI regime. Retrieved from: https://www.ibef.org/news/dipp-to-release-new-industrial-policy-by-october-will-review-fdi-regime (last accessed on 6 November 2017)

73 Government of Andhra Pradesh. (2016). ITE&C DEPT - IT Promotion – Andhra Pradesh Internet of Things (IoT) Policy 2016-2020 - Orders - Issued. Retrieved from: http://www.aponline.gov.in/apportal/Downloads/2016ITC_MS3.pdf (last accessed on 6 November 2017)

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Enabling businesses to adopt emerging technologiesPolicy initiatives should explicitly touch upon building an incubatory environment for emerging technology-based research and knowledge sharing, thereby bringing together players in the private and public sector and academia to facilitate the free flow of good practices and novel innovations.

Some of the initiatives to bolster such an environment could be collecting quality training data (e.g. from public portals) and making it available for research and educational purposes.

For example, the Telangana government offers policies on IoT that aims to create a conducive ecosystem for everything connected with this technology.

‘The IoT policy (for the state of Telangana) brings out the state’s intent to position itself as a global leader in the IoT space by setting up a comprehensive ecosystem. The policy also elucidates the different ways the government intends to use these technologies through its multiple departments and agencies.’

– K T Rama Rao, Minister for IT and EC74

The Ministry of Electronics and Information Technology, Government of India, has been funding projects by educational institutions in the areas of ubiquitous computing and wireless sensor networks for real-time landslide monitoring and perception engineering (e.g. artificial sensing, perceptual robotics).The ministry has also been operating a Technology Incubation and Development of Entrepreneurs (TIDE) scheme for facilitating technology innovation over the last decade.75

Further, emerging technology centres of excellence (CoEs) can be set up, where multiple technology firms, start-ups and technology enthusiasts may freely share knowledge and innovation. These CoEs could partner with universities and be tasked with growing awareness about emerging technologies and sowing interest in academic institutions as well as have adequate representation on boards of universities, providing inputs on syllabi and internship opportunities for students.

Policymaking must clearly define standards and benchmarks that can be effectively used to gauge progress in emerging technology innovation and commercialisation in a host of application domains. Relevant yardsticks of progress would help reduce the level of risk and uncertainty associated with investments in this space.

74 PTI. (11 October 2017). Telangana unveils IoT & e-waste management policies. BGR. Retrieved from: http://www.bgr.in/news/telangana-unveils-iot-e-waste-management-policies/ (last accessed on 6 November 2017)

75 Ministry of Electronics & Information Technology (MeitY). (n.d.) Technology Incubation and Development of Entrepreneurs (TIDE). Retrieved from: http://meity.gov.in/content/technology-incubation-and-development-entrepreneurs (last accessed on 6 November 2017)


Safeguarding data, privacy and transparencyEmerging technologies such as AI, ML, robotics, IoT, the blockchain, Cloud, and AR and VR are largely dependent on volumes of data, as a result of which devices and applications making use of these technologies are designed to continuously capture and relay user information.

It becomes imperative in such a scenario to have a strong policy outlining how and when companies can capture, process and share individual data with third parties.

In a healthcare setting, for example, governing policies could lead to privacy breaches caused by patient conditions being collected and shared by hospitals with other companies or agents without a patient’s consent.

Similarly, policymakers could put in place mandates that require cloud service providers to guarantee service levels and physical locations of data centres used for their customers (public and private) and provide adequate compensatory cover in case of data loss or corruption.

For AI and robotic applications and platforms, especially those that function autonomously, such as self-driving cars and predictive profiling, establishing robust legal and ethical boundaries outlined through policymaking could direct developers and leaders of AI firms so that their products are responsible, transparent and meet the checklist of acceptable conditions before they are launched in the market.

Policy priorities for responsible and explainable AI

Individuals Enterprises Government Society

• Privacy and confidentiality

• Personalisation

• Explanations

• Trust and transparency

• Responsible and explainable AI

• AI governance

• Automation and universal basic income

• Education and skills

• Regulation – monopolies, consumer protection

• Bias and discrimination

• Diversity and transparency

• Beneficial AI


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Looking aheadProgresses in emerging technologies should follow the needs of businesses and individuals rather than the other way round. In order to ensure that innovation is directed towards effective pursuits and does not clash with human interest, collaborative efforts and ongoing dialogue between the three pillars of emerging technology research—academia, public sector and private sector should be encouraged.

While academia and the private sector conduct research on various applications with diverse usage in mind, the public sector, with its various initiatives (Digital India, Make in India, Skill India, etc.), can identify areas where specific emerging technologies can be utilised to increase reach, effectiveness and efficiency, thus giving direction to existing innovation within the country.

Regular cooperation will be required between the academia, public and private sectors in order to identify and get a comprehensive view of problems faced by the population and find intelligent and innovative ways to increase the efficiency and effectiveness of services delivered to society.

Organisations should not treat emerging technologies as a kind of checklist to delegate routine checks and balances in the form of impact analyses. Instead, leaders must take consider using these technologies to strategically protect their organisations against others using the technologies to their advantage. If that sounds like an arms race, that’s because it is: Technology could be leveraged to gain competitive advantage, provided that it forms part of regular discussion and decision making within the senior management.

PwC’s ‘Tech breakthroughs megatrend: How to prepare for its impact’ report76 has identified three key questions that business leaders must effectively answer to track, evaluate and plan development for these emerging technologies and make them an integral component of their overall corporate strategy:

1. Do we have a sustainable innovation strategy and process?

2. Have we quantified the impact of new technologies? If not, how can we do that—and how soon?

3. Do we have an emerging technologies roadmap? If so, are we keeping it up to date?

Answers to these fundamental questions will give businesses the meta-actions—moves that enable the executive team as a whole to properly and effectively harness the best new technologies.

76 Ladda, S., Basu, A., and others. (2016). Tech breakthroughs megatrend: How to prepare for its impact. PwC. Retrieved from: https://www.pwc.in/assets/pdfs/publications/tech-breakthroughs-megatrend/tech-breakthroughs-megatrend-how-to-prepare-for-its-impact.pdf (last accessed on 6 November 2017)


Blueprint for digital success

Map out a technology roadmap.

Create initial pilot projects.

Define the capabilities that

you need.

Become a virtuoso in data and analytics.

Transform into a digital enterprise.

Actively plan an ecosystem

approach.

1 2 3 4 5 6

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Organisations should take gradual steps to digital transformation by focusing on demonstrating success through a handful of pilot projects, which might help in addressing the reluctance or resistance from stakeholders towards the adoption of emerging technologies.

An example of such a pilot initiative might be the installation of sensors in critical manufacturing equipment and the use of data analytics for predictive maintenance solutions. Similarly, an initiative involving horizontal integration with supply chain partners could be tracking devices on shipments sent to or received from particular suppliers. This would allow firms to test whether the whole ecosystem comprising internal and external stakeholders, technology and processes will function smoothly in the updated system.

Such pilot projects, which can be undertaken in collaboration with start-ups or academia, could help firms garner stakeholder buy-in and support by demonstrating successful implementation and tangible benefits. These projects will also help firms understand, with minimum impact, the areas of improvement that they need to work on.

Innovation—both incremental and revolutionary—is crucial for firms striving to win the emerging technology race. Strengths like firm size and market share, which used to be at the core of competitive dominance, can no longer be depended upon solely as new-age competitors can capitalise on technologies to disrupt traditional business models. Therefore, it is important that business leaders stay at the forefront of innovation and are agile enough to adapt their business models to changing needs.

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BibliographyInstitute for Artificial Intelligence, University of Georgia. (n.d.). AB in cognitive science. Course information. Retrieved from: http://www.ai.uga.edu/content/ab-cognitive-science

Government of Andhra Pradesh. (2016). ITE&C DEPT - IT Promotion – Andhra Pradesh Internet of Things (IoT) Policy 2016-2020 - Orders - Issued. Retrieved from: http://www.aponline.gov.in/apportal/Downloads/2016ITC_MS3.pdf

IANS. (21 June 2017). Acute talent shortage in AI, IoT industry, shows survey. Economic Times (Technology). Retrieved from: https://tech.economictimes.indiatimes.com/news/technology/acute-talent-shortage-in-ai-iot-industry-shows-survey/59254799

Balagoni, A. (2016). India’s empower labs aspires to be the next Niantic Labs, developer of the latest sensation Pokémon Go. YourStory. Retrieved from: https://yourstory.com/2016/07/empower-labs-pokemon-go/

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About ASSOCHAMThe knowledge architect of corporate India Evolution of value creatorASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. Having in its fold more than 400 Chambers and Trade Associations, and serving more than 4,50,000 members from all over India. It has witnessed upswings as well as upheavals of Indian Economy, and contributed significantly by playing a catalytic role in shaping up the Trade, Commerce and Industrial environment of the country.

Today, ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the technology driven cyber age of ‘Knowledge Based Economy’.

ASSOCHAM is seen as a forceful, proactive, forward looking institution equipping itself to meet the aspirations of corporate India in the new world of business. ASSOCHAM is working towards creating a conducive environment of India business to compete globally.

ASSOCHAM derives its strength from its Promoter Chambers and other Industry/Regional Chambers/Associations spread all over the country.

VisionEmpower Indian enterprise by inculcating knowledge that will be the catalyst of growth in the barrier-less technology driven global market and help them upscale, align and emerge as formidable player in respective business segments.

MissionAs a representative organ of Corporate India, ASSOCHAM articulates the genuine, legitimate needs and interests of its members. Its mission is to impact the policy and legislative environment so as to foster balanced economic, industrial and social development. We believe education, IT, BT, Health, Corporate Social responsibility and environment to be the critical success factors.

Members – our strengthASSOCHAM represents the interests of more than 4,50,000 direct and indirect members across the country. Through its heterogeneous membership, ASSOCHAM combines the entrepreneurial spirit and business acumen of owners with management skills and expertise of professionals to set itself apart as a Chamber with a difference.

Currently, ASSOCHAM has more than 100 National Councils covering the entire gamut of economic activities in India. It has been especially acknowledged as a significant voice of Indian industry in the field of Corporate Social Responsibility, Environment & Safety, HR & Labour Affairs, Corporate Governance, Information Technology, Biotechnology, Telecom, Banking & Finance, Company Law, Corporate Finance, Economic and International Affairs, Mergers & Acquisitions, Tourism, Civil Aviation, Infrastructure, Energy & Power, Education, Legal Reforms, Real Estate and Rural Development, Competency Building & Skill Development to mention a few.

Insight into ‘new business models’ASSOCHAM has been a significant contributory factor in the emergence of new-age Indian Corporates, characterized by a new mind-set and global ambition for dominating the international business. The Chamber has addressed itself to the key areas like India as Investment Destination, Achieving International Competitiveness, Promoting International Trade, Corporate Strategies for Enhancing Stakeholders Value, Government Policies in sustaining India’s Development, Infrastructure Development for enhancing India’s Competitiveness, Building Indian MNCs, Role of Financial Sector the Catalyst for India’s Transformation.

ASSOCHAM derives its strengths from the following Promoter Chambers: Bombay Chamber of Commerce & Industry, Mumbai; Cochin Chambers of Commerce & Industry, Cochin: Indian Merchant’s Chamber, Mumbai; The Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of Commerce and Industry, New Delhi and has over 4 Lakh Direct/Indirect members.

Together, we can make a significant difference to the burden that our nation carries and bring in a bright, new tomorrow for our nation.

D. S. RawatSecretary [email protected]

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) Corporate Office:5, Sardar Patel Marg, Chanakyapuri, New Delhi - 110 021Tel: 011-46550555 (Hunting Line) • Fax: 011-23017008, 23017009Website: www.assocham.org

About the authors

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About PwC

This knowledge paper has been co-authored by Saunak Ghoshal, Indranil Mitra, Prasun Nandy, Udayan Bhattacharya, Deboprio Dutta and Shruti Kakar. Saunak Ghoshal is a Partner in the firm and leads the Application Technology group. Indranil Mitra and Prasun Nandy are Directors and focus on the AI field for the Data and Analytics practice. Udayan Bhattacharya is an Associate Director and works on AI, machine learning and cognitive automation along with Deboprio Dutta and Shruti Kakar, who are Senior Consultants in the practice.

Arnab BasuPartner and Leader, Technology [email protected]

Indranil Mitra, PhDDirector, Data and [email protected]

Deboprio DuttaSenior Consultant, Data and [email protected]

Pawan Kumar S.Partner and Leader, Technology [email protected]

Prasun NandyDirector, Data and [email protected]

Shruti KakarSenior Consultant, Data and [email protected]

Saunak GhoshalPartner and Leader, Application [email protected]

Udayan BhattacharyaAssociate Director, Data and [email protected]

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