1. Economic Development in Information and AI Era
Experiences and Expectations
Dr.C.Muthuraja, M.A., M.Phil., PhD
Head, Post Graduate and Research Department of Economics
The American College, Madurai - 625 002, TAMIL NADU
(cmuthuraja@gmail.com) - (M-09486373765)
(Presented at Refresher Course (ONLINE MODE) in Economics on the theme of "Economics and Social Development in
Information and A-I Era" from 13-26 September 2023 organised by UGC – HRDC, Madurai Kamaraj University, Madurai,
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2. OUTLINE
 Introduction
 World Economic Forum
 AI – Basics and Benefits
 AI – Benefits
 AI – Economic Benefits
 AI – Cautions and Concerns
 AI- Efficiency and Equity
 AI and Economic Growth
 AI and Information Economics
 AI on Society - Exciting and Challenging
 Towards AI Ready India
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3. Introduction
 AI - powerful tool that can help our society
 UN calls “decent work,” which includes job security
and equal pay for equal work
 Income-generating employment opportunities for all
help support sustainable economic growth.
 AI has played a major role in the digitalization of
Society
 Enabled us to collect, process, and analyze large
amounts of data at a faster rate than ever before
 Creation of new technologies, improved business
processes and greater efficiency in many industries
 AI can help improve access to education, healthcare,
and clean water, and can also aid in the fight against
climate change, poverty, and hunger
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4. Economic Process and Progress
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5. World Economic Forum
While AI would likely take away
85 million jobs globally by 2025
It would also generate 97 million
new jobs in fields ranging from big
data and machine learning to
information security and digital
marketing
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6. AI Illustrations
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7. AI – Basics and Benefits
 AI algorithms are data-driven and learn how data
behaves over time
 Makes them very suitable in forecasting these
economic indicators
 Accurate predictions of these indicators are of
prime importance
 it can help Policymakers even predict the next
financial crisis
 AI Enhances Labour and Capital
 AI enhances the quality of labour as well as the
quality of capital
 Total Factor Productivity (TFP) - determine the
development dynamics of the Economy
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8. India and Industrial Revolutions
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9. Knowledge Economy
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10. AI – Benefits
 Automation is one of the most common benefits of AI
 Great impact on transportation, communications, service
industries, and consumer products
 With automation, businesses can enjoy increased
productivity and higher production rates in the sectors
 Modernize many technological and social processes
making them more effective
 Increasing labour productivity and expanding human
capabilities
 Restructuring management processes and putting forward
new requirements
 Improve both data quality and analysis by applying
techniques such as data cleansing, data integration, data
mining, machine learning, natural language processing,
and computer vision
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11. Information Economics
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12. AI – Economic Benefits
 In financial economics in making decisions of
trading in financial securities like stocks and
bonds based on prediction of their prices
 Making decisions of entering interest rate
derivative contracts with speculative or hedging
motives based on prediction of benchmark interest
 Boost worker productivity by 14% in certain
cases, as demonstrated by a study involving
customer support agents
 Employees using generative AI are likely to
replace those who do not upskill, leading to
overall improved productivity
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13. General Purpose Technology (GPT)
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14. AI – Contributions Sectors Economy
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15. Emerging Technologies and Indian Economy
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16. AI – Cautions and Concerns
 Likely to displace middle-class, white-collar jobs
compared to earlier technological advancements that
shifted workers from lower-paid farm jobs to higher-paid
factory floor jobs
 Lead to increased job disruption in these sectors
 AI raises ethical issues, including data privacy, algorithm
bias, and potential misuse of AI technologies
 AI lacks human qualities like creativity and empathy,
limiting its ability to understand emotions or produce
original ideas
 Costly implementation, potential human job loss, and lack
of emotion and creativity
 AI is developed and used in an ethical and responsible
manner, to avoid any unintended negative consequences
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17. AI- Efficiency and Equity
 AI - ability to automate many tasks that were previously
done by humans, leading to increased efficiency and
productivity in various industries
 Healthcare sector - AI is being used to develop new
methods of treatment, analyse medical data, and improve
diagnostic accuracy
 Boost our workplaces, which will benefit people by
enabling them to do more work
 AI replaces tedious or dangerous tasks, the human
workforce is liberated to focus on tasks for which they are
more equipped, such as those requiring creativity and
empathy
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18.  The estimate suggests that a unit increase in AI
intensity will increase the TFP growth by 0.05%
 The growth co-efficient suggests that on average a
unit increase in AI intensity, measured as the ratio of
AI to total sales, can return USD 67.25 billion or 2.5%
of GDP to the Indian economy in the immediate term
 The IT-BPM (Information technology and Business
Process Management) sector of India has a share of
9.3% of the country's GDP, making it one of the
biggest sectors to contribute to India's economic
growth
 The IT sector captures 56% of the global outsourcing
market
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AI and Economic Growth

19. Information Economics and AI
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20. AI and Information Economics
 Information has a very important role to play in the market
for better customer services
 As information can be substituted for man, material and
land for reason it can bring down the cost of production of
goods
 IT revolution opened up new possibilities of economic and
social transformation
 The IT and IT enabled business process outsourcing (ITES-
BPO) services continue to be on a robust growth path
 Indian software industry has emerged as one of the fastest
growing sectors in the economy
 In addition to e-commerce and financial services,
digitalization has significantly impacted manufacturing
 Helped increase manufacturing efficiency and productivity
 Enabling to compete more effectively in global markets
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21. Information Economics
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22. Information Economics and AI Era
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23. AI on Society - Exciting and Challenging
 AI has the potential to transform the way we work,
communicate, and interact with technology
 It raises concerns about the displacement of jobs,
bias and discrimination, and the potential for
misuse or abuse
 At all levels of education, AI will likely be
transformative
 Students will receive educational content and
trainings tailored to their specific needs
 AI will determine optimal educational strategies
based on students' individual learning styles
 By 2028, the education system could be barely
recognizable
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24. Expectations….Economy India
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25. Expectations….G20 and Economy India
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26. Towards AI Ready India
• AI professionals in India is rapidly increasing
• Job roles like AI Research Scientist, Machine Learning
Engineer, Data Scientist, NLP Expert, and Computer
Vision Engineer are in high demand
• Must have the right skills and expertise in the domain
Role of
 INTERNATIONAL INSTITUTIONS - UNION/STATE/LOCAL GOVENMENTS -
CORPORATE INDIA - NON-GOVERNMENT ORGANISATIONS -
VOLUNTARISM - YOUTH IDEAS & POWER (DEMOGRAPHIC DIVIDEND)
APPEAL
TOWARDS SUSTAINABLE AI INDIA
PLEASE : EACH ONE IDEA ONE
IF NOT
EACH ONE MEET ONE AND IDEA ONE
(QUESTIONS PLEASE)
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