Prime Minister Narendra Modi&rsquo;s &lsquo;Digital India&rsquo; call provided a timely push to business transactions by encouraging corporates to switch over to online work. They could use computerization for speedy delivery and facilitate an outreach to customers that was not so easy to achieve earlier.&nbsp; 
An ultimate advance of Information Technology symbolized by Artificial Intelligence (AI) is now sweeping the business world in a manner that makes it necessary to administer a word of caution to all concerned against presuming that AI is the quick-time panacea for all their problems&mdash;big and small.
The important point here is that India on its way to becoming the third largest economy in the world in the foreseeable future, was benefitting a great deal from the strategic initiative of speeding up with &ldquo;digitization&rdquo;. This policy flowed right from the top and gave this country a significant competitive advantage in today&rsquo;s globalized world enabling it to move ahead of others in the &ldquo;knowledge economy&rdquo;.
India was a leading power and a storehouse of talent so far as IT was concerned and it will not be presumptuous to conclude that it will guide the world in the area of AI applications, too. These applications will expedite growth, improve efficiency and also take care of the issues of security that &lsquo;digitization&rsquo; would create for all stakeholders. There cannot be a one-fit for all, however a progressive understanding of the specific needs of an organization, will go a long way in giving that particular business a competitive advantage.
Artificial Intelligence will never replace human jobs completely. It can free human hands of routine tasks that do not bank on creativity, strategic thinking and leadership qualities. A company that makes its employees do their jobs better or &ldquo;more swiftly&rdquo; than earlier, is adding to their &ldquo;efficiency&rdquo; by improving the output per unit of &ldquo;time&rdquo;&mdash;time being a recognized &ldquo;resource&rdquo; now. This does not necessarily entail laying down any part of the workforce&mdash;the new requirement is to make the existing manpower more productive.
This is not all that easy to achieve since it calls for deep planning for &ldquo;customizing&rdquo; the AI applications to the employees&rsquo; tasks and duties. AI is adopted for creating business value and this has to be done in an innovative and ethical way to win customers&rsquo; confidence.
Human intelligence and imagination are needed while planning for an AI application&mdash;it can be said, therefore, that AI is a &ldquo;product&rdquo; not a &ldquo;substitute&rdquo; for the human mind. AI aims at enhancing operational efficiency and has to be built into the concerned &ldquo;processes&rdquo;. Its validation takes time and cannot be fixed in a moment.
AI applications also get linked to a possible organizational resetting, training regimen and investment of time because they worked for long-term advantage&mdash;often altering the decision-making protocols.
It is advisable to start with AI applications for small management projects and make them a part of the evolution of the larger organizational growth. It has to be understood that AI lays the path of steady progress and cannot be &ldquo;ordered&rdquo; to produce instant results except in the area of &lsquo;data analytics&rsquo; where algorithms can be devised to read the &ldquo;patterns&rdquo; for further deductions and &ldquo;machine learning&rdquo; introduced to help a certain degree of &ldquo;automation&rdquo;.
AI is important but there is something unnatural about the way every business is feeling pressurized to embrace it like a blind spot for success in terms of achieving an immediate enhancement of &ldquo;productivity&rdquo; and &ldquo;return on investment&rdquo;. When the Information Technology revolution appeared on the scene in 1991, the world transformed from the Industrial Age to the Information Age and a new level of globalization set in because of instant communications that could be made across geographical frontiers and the advent of a level of competitiveness that had not been encountered earlier.
Businesses got new opportunities for reaching out to customers and prospects of diversification, mergers and acquisitions multiplied. With the advent of Artificial Intelligence (AI), it became possible to analyze a large amount of data that was humanly impossible to examine earlier. Also, &ldquo;machine learning&rdquo; could be used for improving &ldquo;processes&rdquo; and making transactions cost-effective in terms of time utilization, which would boost &ldquo;productivity&rdquo; and consequently enhance &ldquo;profitability&rdquo;.
There is literally a transformation of the Age of Information into the Age of Intelligence because AI does add to the ability of business houses to have a peep into the future and read the &lsquo;risks and opportunities&rsquo; ahead of others. Analysis of what was available in the public domain always helped to produce &ldquo;intelligence&rdquo; that could provide this insight. Analysis is the instrument that allowed for the advantage of human imagination and far-sight to be built into AI applications.
Digitization in general and AI in particular has produced a new socio-economic atmosphere that gave intensive for launching start-ups and innovating &ldquo;products&rdquo; and &ldquo;services&rdquo;. On the other hand, in the strategic sphere, it has allowed &ldquo;proxy wars&rdquo; to replace open military attacks- social media emerging as a particularly powerful instrument of combat. Misinformation, &ldquo;deepfakes&rdquo; and indoctrination are used for narrative building against a regime.
They were affecting people&rsquo;s lives by exposing them to newer kinds of cyber fraud and also creating a new risk profile for businesses. Just as Information Technology fundamentally altered the lifestyle of people, AI is likely to impact the cultural outlook of society&mdash;creating new normals for businesses, interpersonal interactions and even social values to an extent.
The Information Age had mandated that being well-informed was the key to success in any field and Artificial Intelligence has further added to the importance of being aware of what was happening within the society and also in the world outside.
Business-customer relations, people&rsquo;s approach to the ruling elite and life in the universities are all impacted by AI offerings. &ldquo;Writing assistants&rdquo; are helping the &ldquo;cost-effective&rdquo; management of organizations. What has gained in importance is the discipline of accepting and acting only on reliable information. One should not run into the erroneous belief that whatever appeared on the internet is trustworthy. There are both promises and perils associated with AI and this is a sobering thought for all well-informed people.
It is interesting to recall that the awardees of the Nobel Prize in Physics this year are two pioneers of Information Technology&mdash;John Hopfield of Princeton University and Geoffrey Hinton of the University of Toronto. Hinton warned that AI&mdash;which he compared with &ldquo;another Industrial Revolution&rdquo; &mdash;could produce unforeseen consequences creating a situation where &ldquo;things could get out of control&rdquo;. Hopfield was even more forthright in declaring at a university Conclave that &ldquo;AI could create an apocalypse&rdquo;.
Hinton praised GPT4&mdash;an AI offering&mdash;saying that &ldquo;if I want to know the answer to anything I would just ask it&rdquo;, but added with a twist that &ldquo;I do not totally trust it because it can hallucinate&rdquo;.
AI is subject to the fundamental principle of &ldquo;garbage in garbage out&rdquo; that did not apply to human intelligence because the latter could invoke &ldquo;logic&rdquo;, &ldquo;power of recall&rdquo; and &ldquo;imagination&rdquo; which were not available to the former while absorbing information.
AI applications are situation-specific, anchored on processes and meant to produce a long-term gain for the organization. They are used after deep consideration and planning and have a strategic perspective&mdash;there is nothing tactical about them.
In the times ahead, successful CEOs would be the ones who were well-versed in AI and the personnel working for them would be individuals who had been up-skilled about AI applications&mdash;even though they might not be &ldquo;technologists&rdquo; themselves. The new-age businesses would be different from the traditional-looking ones in as much as they would be far more competent and aggressive about exploring the &ldquo;opportunities&rdquo; and averting the &ldquo;risks&rdquo;.
(The writer is a former Director Intelligence Bureau. Views are personal.)
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Artificial Intelligence aims at enhancing operational efficiency

Digitization, advent of AI have given India an edge and helped it grow as ‘knowledge economy’

The Third Eye| A New Strategy for the Biz World

Digitization, advent of AI have given India an edge and helped it grow as ‘knowledge economy’

January 5, 2025 | 17:24 IST