ET Q&A: India must commit to AI, next frontier of wealth creation, says Vijay Govindarajan

“If I were to advise the Prime Minister I would say make India a digital India,” said Vijay Govindarajan, Coxe Distinguished Professor at Dartmouth College’s Tuck School of Business. “India must make a deep commitment to artificial intelligence. That is going to be the next frontier of wealth creation,” said the best-selling author and one of the world’s leading experts on strategy and innovation.

In an interview to Rica Bhattacharya, Govindarajan, author of “Three Box Solution” and “The Three-Box Solution Playbook” speaks about the innovation opportunities and challenges that lie ahead for India. Edited excerpts:

What can Indian companies do to drive innovation?

India needs to look at breakthrough and transformational innovation. For me there are three Indias — the top, middle and bottom of the economic pyramid. India has been focused only on the top of the pyramid and perhaps the upper end of the middle economic pyramid. A very large portion of the Indian population are non-consumers of about every product and services. We need “ultra” low cost business models for the middle of the economic pyramid and when you go to the bottom you have to think of ‘ultra ultra’ low cost models.

So where does the innovation opportunity for India lies?

The opportunity for India in the next decade is going to be in leveraging digital capabilities. India has tremendous opportunity to make huge commitment to digital infrastructure because we have got top notch engineers.

The government should make a huge commitment at the national level. We have to create equivalent companies to Amazon and Netflix and Google in India.

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What should India do to become a $5 trillion economy by 2025?

It is a bold statement that Modi is making asking India to rise up to the challenge of becoming a significant global player. It does not matter if we achieve the $5 trillion target or not. We need to think about how do we push the growth rate. For that we have to bring digital business concepts in order to make education, healthcare, transportation, etc affordable and available to every section.

So what would be your word of advice to the government?

If I were to advise the Prime Minister I would say make India a digital India. India must make a deep commitment to artificial intelligence.

That is going to be the next frontier of wealth creation. The biggest advantage that India has is access to data because India has 1.2 billion people, four times the size of the US, and hence four times more data. America and China are at loggerheads now. It is a great opportunity for India to step up and build a relationship with the US and benefit from that. If we focus on a digital India we can become a $5 trillion economy.

What are the challenges for innovation in India where majority of the companies are family businesses?
The biggest challenge for Indian companies is avoiding the traps of past success. Family ownership has a lot of advantage. They are large, resourceful, and sometimes led by real visionaries.

But they are so large and successful that their problem is giving up some of the things that had got them success in the past but will not (do so) in future.

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