Artificial Intelligence (AI) is on fire nowadays! Every company wants to reap the benefits of this marvelous technology. However, its main effect is seen in the regions of Asian countries, with many companies adopting this technology to accentuate their productivity.
Companies operating in the Asian region have become the prime users of AI and witnessing this development, the International Monetary Fund (IMF) has stated that this technology has the potential to improve productivity in Asian economies.
Approximately 50% of jobs in these economies are exposed to AI. However, the number in the developing economies is 25%. Notably, around 40% of jobs in Singapore are highly complementary to AI. On the other hand, the picture is different for Laos, where the figure stands at just 3%.
In Southeast Asia, AI adoption is projected to boost the region's gross domestic product (GDP) by 13% to 18% by 2030, equating to nearly US$1 trillion.
This happened due to the increasing digital economy and the young generation contributing to it.
AI's integration into various industries is reshaping labor markets across Asia. In India, the technology outsourcing sector, which employs 5.4 million people and contributes 8% to the economy, faces significant transformation as AI reduces global demand for human labor. Major outsourcing companies are adopting AI to remain competitive, potentially impacting low-end operations like call centers.
The IMF warns that AI could exacerbate inequality within countries. Workers in service, sales, and clerical support roles will get a harder hit due to AI advancements.
Policymakers are encouraged to implement effective social safety nets, reskilling programs, and regulations to promote ethical AI use to mitigate these effects.
Recognizing AI's transformative potential, several Asian governments are proactively developing policies and investing in AI infrastructure. Malaysia plans to introduce a national cloud policy and AI regulations to encourage ethical AI use, coinciding with significant investments from global tech companies like Google's $2 billion data center, which is expected to contribute over $3 billion to the economy by 2030.
Undoubtedly, India is on the list of key players in the global AI landscape. With a robust IT industry worth $250 billion and a workforce of nearly 5 million programmers, India's AI services are projected to be worth $17 billion by 2027. The government's investment of $1.25 billion in the IndiaAI Mission aims to foster AI development across various sectors.
Nandan Nilekani, co-founder of Infosys and architect of India's digital infrastructure, states that "Interacting with AI through one's voice could 'dramatically improve access to services.' But these systems won't help much if they don't work in India's many distinct languages and dialects or lack an understanding of cultural context".
He provided his insights on the potential of AI to boost productivity and the need for retraining programs: "Clearly, [AI] will lead to productivity improvement and automation, including in the area of customer service."
As a matter of fact, he has built a powerful initiative called Adbhut India which aims to use AI to address country-specific needs, focusing on creating essential public infrastructure and datasets.
Conversely, some experts caution about the potential risks associated with rapid AI adoption. The IMF notes that while AI can enhance productivity, it may also widen inequality if not managed properly. Policymakers are urged to implement reskilling programs and strengthen social safety nets to support workers transitioning to new roles in an AI-driven economy.