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GenAI's potential to reshape industries, unlocking in economic value, revealed in new study

GenAI is also poised to bring about substantial changes in general and administrative costs (G&A), which include functions like finance, accounting, legal, and HR. The report predicts a 40 per cent increase in productivity in these areas over the next three years.

Saumya Nigam Edited By: Saumya Nigam @snigam04 New Delhi Published on: September 21, 2023 19:57 IST
artificial intelligence, tech news,
Image Source : FILE GenAI's potential to reshape industries, unlocking in economic value, revealed in new study

Generative AI (GenAI) is poised to create an annual economic value ranging from $2.6 trillion to $4.4 trillion, with approximately 75 per cent expected to concentrate in critical sectors like software engineering, customer operations, product and R&D, and sales and marketing. These core service lines are integral to many technology service providers in India, according to a new report released on Thursday by Nasscom in collaboration with McKinsey & Company.

The report suggests that emerging GenAI use cases will substantially enhance productivity and foster growth for technology service providers by transforming their service offerings over the next five years. It anticipates that more than 100 generative AI use cases could potentially drive an additional 15 to 20 per cent growth over this period. Moreover, GenAI is predicted to enhance delivery productivity by 30 per cent within the next two to three years.

The generative AI space has witnessed significant progress in the past 6-8 months, with numerous releases involving models, datasets, and applications.

Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at Nasscom, explained, “The generative AI space will continue to evolve with the trajectory of technology service providers being reshaped and new capabilities emerging. Providers are re-evaluating their approaches based on new insights and many are intensifying their investments in areas like technology, talent, risk management, and even mergers and acquisitions with generative AI startups.”

GenAI is also poised to bring about substantial changes in general and administrative costs (G&A), which include functions like finance, accounting, legal, and HR. The report predicts a 40 per cent increase in productivity in these areas over the next three years.

However, the impact of generative AI on technology service providers will be determined by factors such as their existing service line and vertical mix, as well as the speed of adoption and various drivers. While GenAI offers substantial opportunities, it also presents challenges. “It holds the promise of a step change in productivity and unlocking multiple new revenue pools for providers. Early movers are positioned to emerge as frontrunners in this dynamic industry,” stated Ankur Puri, Partner at McKinsey & Company.

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This report underlines the transformative potential of GenAI in various domains and its capacity to drive economic growth and efficiency across sectors, highlighting India's role in this emerging landscape.

Inputs from IANS

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