In 2023, India and China emerged as leading developing nations in private investments in Artificial Intelligence (AI). A United Nations report brought into light India’s position, ranking tenth globally. The 2025 Technology and Innovation Report from the UN Conference on Trade and Development (UNCTAD) indicated that India improved its readiness for frontier technologies, ranking 36th out of 170 countries. This report puts stress on the importance of AI in economic growth and technological advancement.
AI Investment Landscape
The United States leads global AI investment, contributing $67 billion. China follows with $7.8 billion, while India ranks tenth with $1.4 billion. These investments are crucial for developing AI capabilities. The report estimates that the AI market could reach $4.8 trillion by 2033, denoting its potential impact on various sectors.
Readiness for Frontier Technologies
India’s readiness index score improved from 48th in 2022 to 36th in 2024. The index evaluates ICT deployment, skills, R&D, industrial capacity, and access to finance. India’s strengths include a high ranking in R&D and industrial capacity but lower scores in ICT and skills. This indicates areas needing improvement.
Impact of AI on Employment
AI is projected to affect 40% of jobs globally. While it offers productivity gains, it also raises concerns about job displacement. The report emphasises that AI can create new industries and enhance employment opportunities. Reskilling and upskilling the workforce are vital to navigating these changes.
Global AI Development Dynamics
Countries like Brazil, China, and India are outperforming in technology readiness. The report suggests that while higher GDP per capita often correlates with better preparedness for frontier technologies, some developing countries excel beyond expectations. This marks the need for tailored policies to enhance national capabilities.
Cloud Infrastructure and Developer Talent
China and the United States dominate cloud infrastructure services. However, India and Brazil are notable developing countries with capabilities. India boasts around 13 million developers, positioning it favourably in AI development. The government’s collaboration with the private sector and academia has encourageed a robust AI ecosystem.
Policy Initiatives in India
The Government of India has implemented initiatives like the India AI Mission to strengthen its AI innovation ecosystem. This includes increasing AI education and reducing barriers to entry in AI programmes, particularly in smaller cities. Such policies are essential for nurturing talent and encouraging growth in the AI sector.
Sectoral Specialisation
Different countries exhibit specialisation in various technological fields. For instance, Germany excels in wind energy, while India focuses on nanotechnology. This specialisation is crucial for enhancing competitive advantages in global markets and driving economic development.
Industrialisation and Economic Growth
The report illustrates how industrialisation in developing countries like Brazil, China, and India can stimulate economic growth and reduce poverty. Manufacturing plays a very important role in creating jobs and boosting related sectors, demonstrating its importance in national development strategies.
Questions for UPSC:
- Estimate the impact of Artificial Intelligence on global job markets and economic structures.
- Critically discuss the significance of government policies in enhancing technological readiness in developing countries.
- Analyse the relationship between GDP per capita and a country’s preparedness for frontier technologies.
- Examine the role of industrialisation in economic development and poverty reduction in developing nations.
Answer Hints:
1. Estimate the impact of Artificial Intelligence on global job markets and economic structures.
- AI is projected to affect 40% of jobs worldwide, leading to potential job displacement.
- Productivity gains from AI can drive economic growth but may favour capital over labour.
- AI can create new industries, enhancing employment opportunities if accompanied by reskilling.
- Concerns about widening inequality due to automation need to be addressed through policy.
- Investment in workforce adaptation is essential to mitigate negative impacts on job markets.
2. Critically discuss the significance of government policies in enhancing technological readiness in developing countries.
- Government policies can encourage collaboration between the private sector and academia to build expertise.
- Initiatives like the India AI Mission aim to reduce barriers and promote AI education.
- Effective policies can enhance R&D capabilities and access to finance for tech development.
- Tailored strategies are necessary to address specific national challenges and leverage strengths.
- Investment in human capital through education and skills development is crucial for readiness.
3. Analyse the relationship between GDP per capita and a country’s preparedness for frontier technologies.
- Higher GDP per capita often correlates with better technological readiness and infrastructure.
- Some developing countries outperform expectations despite lower GDP, indicating other factors at play.
- Investment in education and innovation can lead to advancements regardless of GDP.
- The UNCTAD index shows that countries can achieve high readiness scores through targeted policies.
- Economic structure and government support are key in determining technological preparedness.
4. Examine the role of industrialisation in economic development and poverty reduction in developing nations.
- Industrialisation stimulates economic growth by creating jobs and boosting related sectors.
- Countries like Brazil, China, and India showcase how industry can reduce poverty levels.
- Manufacturing drives innovation and investment, contributing to overall economic resilience.
- Policy frameworks supporting industrial growth can enhance competitiveness in global markets.
- Investment in infrastructure and skills is essential for sustaining industrialisation benefits.
