Any talk of AI now feels so cliched. This one caught my attention and I thought it needs a commentary. This one is from IMF – International Monetary Fund. It is the ranking of governments on preparedness of governments with regard to AI.

IMF AIPI (AI Preparedness Index)

This ranking is from IMF. India’s ranking is very low. When India wants to be counted among top 5 or top 10 on every major metric, it comes as rude shock. Ideally Indians need not be concerned with this. It is just somebody else’s opinion. To be fair, IMF also has put this disclaimer in its ranking.

However, there is a deeper problem. When IMF publishes ranks, Indian govt takes note and gets into hyper active mode. It gives officials immediate target to improve the rating. The panic mode sets in. The govt officials start rushing to improve the ranking. The concept behind the ranking methodology will drive the direction of entire country. It will have far reaching consequences. Hence it is needed to review the foundation and methodology.

IMF Ranking Methodology

IMF AIPI index has the following parameters: digital infrastructure, human capital, technological innovation, and legal frameworks. The following table is from IMF’s own site.

If you think about these parameters, these are about AI adoption readiness. This also can be seen as AI impact indicator. If the segment already is digital, then both adoption readiness and impact would be high. If segment is not digital, both the readiness and risk (impact) also would be low. Hence, it does not make too much sense.

Problem with IMF Indicators : Example of Meat Industry

Let us take example of meat business. It is $3.4 Billion in 2020. The meat production and slaughterhouses have not been modernized and never been connected to IoT. If powerful lobbies continue to control this industry, the sector will not be modernized. The “inefficiencies” will remain due to lack of standardization and hence the jobs due to ‘inefficiencies’ will remain unaffected by AI. That means- there is nothing to panic.

But as per the indicators above, where will it rate this industry’s AI readiness? The ranking method will give extremely low rating to the preparedness of meat industry. So, animal husbandry and food department will get very low rating due to meat industry, though AI won’t be killing the jobs in meat industry. In fact, any attempt to get better rating, will result in job losses eventually due to AI.

Fallacy of Indices and Ranking

‘Study’ , index and ranking are often misleading than of practical help.

Looking back during the rise of big tech days- all kinds of indices of USA have been ranked high for at least 30 years. But in last 20 years, American society severely got affected with flight of jobs, death of local businesses etc. In hindsight, something was not right about ranking in general.

Now let us focus on AI. The biggest issue is that AI means different things to different segments. Also the nature of impact could be very diverse. Secondly, government is not one entity. It is organization of organizations that are meant to serve many kinds of multi-level organizations.

Coming to India, the preparedness of government and its various departments are very different than the preparedness of private sector employers. Among the private employers, prominent ones are tech services and non-tech services. This could again be different than the products and manufacturing sector. The society as a whole, is yet again different animal. Pinning everything down to one number won’t represent anything meaningful. Hence even if we look at govt’s preparedness, the SWOT would be very different for each department.

Interests, challenges, opportunities are very different for jobseekers, existing jobs under risk of AI impact, industries, society and government are very different. The IMF index does not have the right approach, at least for India. Moving in its directions will not help India.

Competence Needed for AI Impact Assessment

Impact assessment of AI needs solid understanding of AI and imagination of what it can do. At the same time, it also needs good AI / ML implementation experience. It also needs the mindset to go beyond AI and see the domain as-is. Hands-on experience will give very good footing on realistic view and also realistic timeline of when the risk or opportunities would materialize. Panic and rhetorical response may not be the best way.

Given the strength of India, it can come up with pragmatic framework to assess AI readiness.

Initial Steps Towards AI Readiness Index

Initially all the relevant domains need to be identified. These would roughly follow all the govt departments and the portfolios underneath them. HRD ministry, railways, defense… you name it. It would be require a specific focus.

AI readiness index should start with listing the major distinct domains and industries. Further to this, there shall be domain-wise SWOT (Strengths Weakness Opportunities & Threats). Further to that specific actions could be drawn. Thereafter, plans for the actions could be defined. This large canvas of SWOTS and plans can give much better view of AI readiness.

With proper weightage for each, a robust and realistic AI readiness index could be achieved. We at Manomaya AI Systems would be glad to be part of such initiatives.