In India, the electronic components market is driven by domestic demand that influences local manufacturing of electronic products. This report explores the 'electronics manufacturing' event in the Indian market specific to Artificial Intelligence.
THE INDIAN ELECTRONIC MARKET
Indian electronics and hardware, as stated in a study by ASSOCHAM, Ernst & Young (E&Y), is expected to show growth of US$ 130 billion by 2018 at almost 16 percent CAGR .
The various impact factors supporting this growth include government initiatives such as Smart Cities, Digital India, e-governance programs, broader broadband connectivity, in combination with government-driven policies and incentives.
Furthermore, local demand has seen a rapid increase with the extensive invasion of cutting-edge technology devices as well as technology-driven transformation (e.g. 4G/LTE networks). Additionally, global manufacturers intend to invest in India under the Make in India Initiative to enjoy the benefits of reduced labor costs compared to manufacturing costs in China. This impulse is manifesting itself with equivalent robustness in the Indian electronic component manufacturing industry.
The market mix of passive, active, electromechanical and associated components stood at US$13.5 billion total market revenue in 2015 . Regardless, the 30 percent market demand for electromechanical components, and 27 percent for passive components, lately significant growth, has been evidenced in the demand for active components.
Influenced by consumer preferences, the large segment of the production base and market for cathode ray picture tubes and CDs/DVDs and related products has experienced rapid decline, thus marking a change in the composition of the industry. As per ELCINA Reports the Indian electronic component manufacturing industry has failed to keep up with the exponentially growing demands of the next generation of electronics.
The general view is, however, unclear, as it is proven that imports are the origin of 70 percent of electronic components.
The Indian demand market for electronic components is mainly driven by consumer durables and telecommunications, closely followed by the automotive, office automation and information technology industries. The last few decades have witnessed an exciting growth phase with the launch of revolutionary and innovative products, resulting in pertinent trends including 'Convergence of technologies, miniaturization and Artificial Intelligence (AI)'. As mentioned by Gursharan Singh Bhatia – Country Head, India, South Africa and SAARC beyond IoT, automotive and industrial convergence with electronics is an emerging trend.
THE CHANGING SCENE
Today, rapid AI innovation has enveloped entire industries, with special focus on the interest, engagement, and capability of electronics. The dramatic advances evidenced in machine learning technology have taken AI from the recesses of research to the frontiers of everyday applications. Google Home, Alexa, Apple's HomeKit are new-age personal assistants with voice technology and online chatbots are some of the app's promises.
INDIA AND AI
Specifically for the Indian market, AI is estimated to drive the annual growth rate by 1.3 percentage points by the year 2035. On a global level, Google's acquisition of DeepMind reflects on the changing dynamics and emphasizes the great impact potential. In IBM's recent C-suite study, 41% of electronics industry executive respondents shared their recognition of AI's impact on their competitive position .
Specifically, electronics executives expect R&D, Manufacturing and Security to deliver maximum revolutionary changes. Particularly, AI's ability to model based on hypotheses and reach the optimal solution after testing diverse combinations could be the future for heavy organizational investments in electronics.
Similarly, PwC's Indian market research asked user groups and industries about the most impactful AI-powered solutions. Here, the IT/ITES sector emerged as the highest revenue sector, with 63% of participants sharing the importance of machine learning in terms of the most popular AI-powered solution. This was closely followed by the technology industry, banking, financial services and insurance (BFSI) (44% of respondents expressing robotics), manufacturing, and education and teaching.
Focusing on AI assistants, the survey revealed that 61% of respondents are currently using these devices, with 70% respondents stating that many more tasks can be assigned to AI assistants, such as email writing. Furthermore, a high percentage i.e. 72% of respondents recognized the facilitation of 1-1 personalization with AI. Also, 49% were willing to pay more for AI-enabled services.
Another PwC survey revealed the data-driven culture and forward-looking analysis increasingly evident in the Indian industry landscape. Data-driven future through extensive use of advanced analytics and machine learning technologies is an imperative feature of industries. In particular, AI is beneficial in massive data management functions. Various easy-to-use frameworks like scikit-learn (Python), Tensorflow, developers are increasingly optimizing available AI solutions.
In this Global Data and Analytics Survey (2016), PwC interviewed over 100 Indian executives out of 2,100 global executives. The research focused on identifying the use of analytics, data-driven quality and its contribution to the decision-making process. Indian organizations demonstrated a large majority (83%) believe in the futuristic opportunities regarding data-driven insights and intelligence . Up to 98% of respondents reflected on the use of descriptive and predictive analytical approaches in business processes. It was also found that in the Indian market the percentage of investment in advanced analytical capabilities is not associated with the size of the company's revenue. In fact, start-ups (e.g. app-based services, e-commerce) have demonstrated extensive use of predictive and prescriptive analytics.
Electronics is expected to be impacted by the AI revolution through the subsequent opportunity for product and service innovations and must simultaneously prepare for potential disruption through its operational digital reinvention. AI will allow us to escape the commoditization of hardware and, conversely, software-defined functionality will provide product differentiation. Creative use of sensor data will enable new services. Industries would be exposed to new service models through AI assistants.
A new report from professional networking site LinkedIn.com reveals that India is among the top three countries in terms of AI skills. Similarly, Boston Consulting Group (BCG) conducted a study to highlight that after the US (25%) and China (23%), India (19%) ranks third when it comes to aspirational implementation of AI in production. Rapid growth in India is driven by the fact that India is the fastest growing economy, plus the advantages of having the second largest population in the world. In fact, NITI Aayog was mandated by the Honorable Finance Minister in recognition of the power of AI to transform economies. The National AI Program was established to facilitate research and technological development. The paper titled “National Strategy for Artificial Intelligence” released by NITI Aayog (June 2018) claimed the significant role of AI in the Indian context “with a unique brand of #AIforAll”. The focus here was on agriculture, health, smart cities, education and infrastructure, as well as transport and smart mobility.
FINAL
Clearly, 2018 marked the democratization of AI with consumer applications involving visual and speech recognition. In 2019, 40% of digital transformation projects are expected to demonstrate broad incorporation and integration of AI. And in the next two years, 90% of users are expected to use bots .
It is expected that combined with technologies such as quantum computing, futuristically, the term AI will become synonymous with people's imagination when it comes to Artificial Intelligence.
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