How governments can attract innovative manufacturing industries and promote 4IR technologies like AI

India played a critical role in supporting the third industrial revolution. During this period of globalization, the development of the IT industry helped manufacturing go digital. Indian companies like Tata Consulting Services, Infosys and Wipro were instrumental in driving progress during this era of global IT industry development.

Today, even more rapid technological development and increased industrial adoption has created a fourth industrial revolution (4IR) underpinned by the development of new sectors like artificial intelligence (AI). By establishing strong, effective knowledge exchange between governments and industry once again, India has the opportunity to support technological progress and the growing adoption of new-age 4IR technologies into industrial manufacturing processes.

Although the rapid development and adoption of AI by people around the world has been welcomed by industry, some elements have been carefully analysed and sometimes even criticised by governments and regulators.

This is why the government of Karnataka in India is taking a leadership role in helping to develop AI governance as part of the Global Centre for Artificial Intelligence, in partnership with the World Economic Forum. We want to enable more inclusive AI development, enhanced technology governance and responsible digital transformation in the public and private sectors.

The third industrial revolution resulted in inequitable growth in many countries and regions. This time around, Karnataka wants to encourage AI and manufacturing companies to look beyond its state capital Bangalore, where a cluster of innovation and industrial development already thrives. Development of new economic clusters elsewhere in the state will create micro hubs for employment, prevent migration into already crowded cities and ensure equitable economic wealth distribution across geographies.

This will help the micro, small and medium enterprise (MSME) sector, which is important to both India's and Karnataka's economies. Encouraging the growth and sustenance of this sector is a priority. For example, the state government has plans to release a progressive industrial policy that aims to enhance employability opportunities for over 2 million people in Karnataka, including the state’s blue-collar workforce.

This policy could also get more women into the workforce. Not only will this benefit these women, it would also be critical to increasing overall household income and could be a key step in boosting the annual growth rate of Karnataka’s manufacturing sector.

Training to meet the demand of technology jobs is another priority area for the state. Karnataka's government-owned Industrial Training Institutes have become a national benchmark for the short-term training of candidates in emerging technological blue-collar skills and their placement into core industrial jobs. This is an example of a successful partnership in which industry has supported the government in curriculum creation and the government has reciprocated by nurturing the skilled manpower that industry needs to thrive in a fast-changing global skills environment.

Karnataka has also taken a leadership position in pro-environmental governance policy by developing a nationally-approved state action plan on climate change. With net zero and carbon neutrality a key priority for industries and part of companies’ ESG reporting, this green industrial policy fosters sustainability linked incentives for business champions.

In Karnataka, 63% of installed capacity is already renewable energy. This new policy also promotes green industrial corridors for highly polluting industries such as cement and steel, and recommends audits and certifications to meet global sustainability standards. Additionally, it offers water conservation incentives to support industrial development in drought-prone areas while still protecting the necessary ground water levels to sustain dense human habitation.

Karnataka will also soon announce its 1t.org pledge, outlining its nature and climate action goals.

State prosperity is closely linked to innovation. Karnataka has become a hub for manufacturing one of the most sought-after global consumer products, Apple iPhones. And now, a thriving startup community of manufacturing companies such as Next Big Innovation Labs are creating products like patented 3D bioprinters and other hardware and software solutions in Karnataka.

Bangalore is home to 34% of India’s 1600+ Global Capacity Centres (GCCs), which act as hubs for intellectual property creation and highly skilled jobs. Customized government incentive policies assist companies to move from lab (R&D) to market (manufacturing), while helping them save on capital through various subsidies and production-linked incentives.

This kind of multi-stakeholder approach, which prioritises people, planet and prosperity, should be at the forefront of innovators’ minds. It should also be central to government policy. This will help us to build a more equitable and sustainable 4IR growth story.

Governments must enable this through taxpayer-funded incentives, and industry should then deliver enhanced economic well-being for taxpayers. This will help us to achieve inclusive growth while reducing the environmental impact of 4IR on planet earth.