Policy makers around the world are continuously studying how AI is beneficial for unorganized sectors and the impacts of new AI-enabled technologies
Explore how AI is beneficial
In the dynamic landscape of business, the unorganized sector plays a crucial role, encompassing a vast array of industries and services that operate outside the realm of formal regulations and structures. This sector often faces numerous challenges stemming from limited resources, infrastructure constraints, and market uncertainties but they can learn how AI is beneficial for them. However, the integration of Artificial Intelligence (AI) technology presents a transformative opportunity for the unorganized sector to overcome these hurdles and unlock significant benefits.
Policymakers around the world are grappling with the transformative impacts of new AI-enabled technologies on the world of work. Much extant policy discussion around AI and the Future of Work takes as its starting point the structural conditions of labour markets in the Global North. Such markets are typically characterized by a shrinking workforce (due to ageing populations), and concerns about how AI-enabled automated processes are replacing permanent contract jobs, leading to casualization and the erosion of labour market protections. This is particularly evident in the platform economy where digital platforms like Uber and Deliveroo algorithmically mediate piece work in logistics and service sectors, largely outside the scope of labour laws.
Challenges Faced by the Unorganized Sector
The unorganized sector grapples with various challenges that hinder its growth and sustainability. Firstly, the lack of infrastructure, including access to reliable power sources and communication networks, inhibits operational efficiency and scalability. Secondly, limited access to financial resources, technology, and skilled labour further exacerbates the sector's struggles. Moreover, market volatility adds another layer of complexity, making it challenging for businesses to anticipate and respond to changing consumer demands and economic fluctuations.
Digital platforms have been able to effectively tap the under-/unemployed urban workforces, without challenging or remaking the structural conditions of traditional informal work. That is, Indian platform workers, like in pre-algorithmic work arrangements, continue to lack formal labour protections, have low earnings, and have poor job security. In this encounter between informality and AI technologies, the algorithmic is in many ways cementing labour precarity for informal workers.
Benefits of AI for the Unorganized Sector
Despite these challenges, AI offers a myriad of benefits to the unorganized sector. Firstly, AI-powered solutions enhance operational efficiency and productivity by automating repetitive tasks and streamlining processes. This not only reduces manual labour but also enables businesses to allocate resources more effectively. Secondly, AI-driven insights facilitate cost reduction by optimizing resource utilization, minimizing wastage, and identifying areas for improvement. Additionally, AI enables more informed decision-making by analyzing vast amounts of data in real-time, thereby empowering businesses to adapt swiftly to market dynamics and customer preferences. Furthermore, AI-powered market analysis and forecasting provide valuable insights into emerging trends, enabling businesses to stay ahead of the competition and capitalize on new opportunities.
Case Studies and Examples
The transformative impact of AI can be witnessed across various sectors within the unorganized economy. In agriculture, AI-driven technologies such as precision farming and predictive analytics help farmers optimize crop yields, reduce input costs, and mitigate risks associated with weather fluctuations. Similarly, in the retail sector, AI-powered inventory management systems and personalized recommendation engines enhance customer experiences and drive sales growth. Moreover, in transportation, AI-enabled route optimization and predictive maintenance systems improve operational efficiency and reduce downtime, ultimately leading to cost savings and enhanced service reliability.
On the other hand, the majority of world countries like India present starkly different baseline conditions, necessitating focused inquiry. In contrast to countries in the Global North, the Indian labour market has for decades been characterized by a labour surplus comprised largely of a young workforce the majority of whom are engaged in informal work, and the withdrawal of the state from social provisioning. These conditions have engendered fertile ground for the proliferation of the AI-enabled platform model of work organization in Indian cities.
Future Prospects and Adoption
Looking ahead, the integration of AI into daily operations holds immense potential for the unorganized sector. As AI technologies become more accessible and affordable, businesses of all sizes can leverage these tools to drive innovation and growth. Moreover, the widespread adoption of AI has the potential to create new job opportunities, particularly in the fields of data analysis, software development, and AI implementation. However, it is essential to address ethical considerations surrounding AI, such as data privacy, algorithmic bias, and the impact on employment dynamics, to ensure equitable and responsible deployment of these technologies.
To date, AI and Work policy discussions in India and beyond have inadequately grappled with how to regulate AI-enabled technologies in contexts characterized by informality. This project seeks to address this policy gap, by conducting a review of the Indian government’s policy and strategy documents relating to AI and the Future of Work, to answer the question, of how can AI and Work policy in India be (re)configured to address the persistent informality that characterizes urban labour markets?
An Article By National Strategy For Artificial Intelligence
"Artificial Intelligence (AI) is poised to disrupt our world. With intelligent machines enabling high-level cognitive processes like thinking, perceiving, learning, problem-solving, and decision-making, coupled with advances in data collection and aggregation, analytics, and computer processing power, AI presents opportunities to complement and supplement human intelligence and enrich the way people live and work. India, being the fastest-growing economy with the second largest population in the world, has a significant stake in the AI revolution. Recognizing AI’s potential to transform economies and the need for India to strategize its approach, Hon’blethe Finance Minister, in his budget speech for 2018 – 2019, mandated NITI Aayog to establish the National Program on AI, to guide the research and development of new and emerging technologies. In pursuance of the above, NITI Aayog has adopted a three-pronged approach – undertaking exploratory proof-of-concept AI projects in various areas, crafting a national strategy for building a vibrant AI ecosystem in India, and collaborating with various experts and stakeholders. Since the start of this year, NITI Aayog has partnered with several leading AI technology players to implement AI projects in critical areas such as agriculture and health. Learnings from these projects, under various stages of implementation, as well as our engagement with some of the leading institutions and experts, have given a better perspective to our task of crafting the national strategy for AI, which is the focus of this discussion paper. This strategy document is premised on the proposition that India, given its strengths and characteristics, has the potential to position itself among leaders on the global AI map – with a unique brand of #AIforAll. The approach in this paper focuses on how India can leverage transformative technologies to ensure social and inclusive growth in line with the development philosophy of the government. In addition, India should strive to replicate these solutions in other similarly placed developing countries. #AIforAll will aim at enhancing and empowering human capabilities to address the challenges of access, affordability, shortage, and inconsistency of skilled expertise; effective implementation of AI initiatives to evolve scalable solutions for emerging economies; and endeavors to tackle some of the global challenges from AI’s perspective, be it application, research, development, technology, or responsible AI. #AIforAll will focus on harnessing collaborations and partnerships and aspires to ensure prosperity for all. Thus, #AIforAll means technology leadership in AI for achieving the greater good. While evolving the national strategy for AI, the underlying thrust was to identify applications with maximum social impact, a willingness to learn from the best of the world when it comes to the recent technology advancements in AI, and leveraging approaches that democratize access to and further development of AI. From an applications perspective, the approach is to identify sectors that may have the potential of greatest externalities while adopting AI solutions, and hence require the government to play a leading role in developing the implementation roadmap for AI. For example, the agriculture sector in India, which forms the bedrock of India’s economy, needs multi-layered technology infusion and coordination amongst several stakeholders. Efforts from the private sector may neither be financially optimal nor efficient on a standalone basis, and hence sustained government intervention to tackle the existing challenges and constraints is needed. Hence, India’s approach to implementation of AI has to be guided by optimization of social goods, rather than maximization of topline growth."
Conclusion
In conclusion, AI presents a game-changing opportunity for the unorganized sector to overcome its inherent challenges and thrive in today's digital age. The world is still learning about how AI is beneficial for businesses. harnessing the power of AI-driven technologies, businesses can improve efficiency, reduce costs, and make more informed decisions, ultimately driving sustainable growth and development. However, it is imperative to approach AI adoption thoughtfully, considering both the opportunities and challenges it presents, to ensure inclusive and equitable outcomes for all stakeholders.
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