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Why AI will be the Catalyst for a new era of productivity growth

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Image by Lin Tong from Pixabay

The dawn of the artificial intelligence (AI) era is often compared to transformative technological advancements such as the steam engine, electricity, and the personal computer. These innovations reshaped industries and daily life, and AI is poised to make an equally revolutionary impact, particularly on global productivity. While the effects of AI are still unfolding, experts believe that its ability to significantly boost productivity could happen in record time—just seven years, compared to decades for earlier technological revolutions.

This optimism comes at a critical juncture in the global economy. Post-pandemic, many countries are grappling with stagnating growth, rising inflation, and mounting debt, alongside the fundamental issue of declining productivity. In fact, several international agencies have noted that the productivity decline following the global economic downturn is unprecedented in recent history. Yet, AI is emerging as a way of hope, offering the potential not only to reverse this trend but to propel productivity to unprecedented heights.

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The Economic Impact of AI: A Long-Awaited Leap

The global economy has struggled with low productivity growth for over a decade. For example, U.S. labour productivity growth averaged just 1.68% from 1998 to 2007, a period during which significant technological innovations like the internet and personal computers began to take root. But since 2010, productivity growth has fallen further, dipping to 0.38% between 2010 and 2019.

Some forecasts suggest that generative AI alone could add between $2.6 trillion and $4.4 trillion to the global economy

In this environment, AI is seen as the key to unlocking a new wave of economic efficiency. According to recent reports from the International Monetary Fund (IMF), AI technologies are expected to drive a substantial increase in global productivity. Some forecasts suggest that generative AI alone could add between $2.6 trillion and $4.4 trillion to the global economy.

To understand the potential of AI in the context of productivity growth, it’s useful to compare it to previous technological breakthroughs. The steam engine, for example, took about 60 years to fully transform productivity in manufacturing. Personal computers accelerated productivity growth over 15 years. By contrast, AI is expected to have a profound impact on productivity within just seven years.

Generative AI and Its Promising Future

Generative AI is a form of artificial intelligence that creates new content—whether it’s text, images, or even software code—based on patterns learned from large datasets. The speed with which generative AI is advancing is extraordinary. ChatGPT, released in November 2022, was quickly followed by a more advanced version, GPT-4, and other breakthroughs have appeared throughout 2023. This technology is expanding rapidly, with the capability to process tens of thousands of words in a minute, creating a powerful tool for automating complex tasks.

The applications of generative AI are vast and varied. In the business world, AI systems are already transforming industries like customer operations, marketing, software engineering, and research and development. The banking sector, for example, is projected to see an annual revenue increase of $200 billion to $340 billion through the adoption of AI. The retail and consumer goods sectors could see similar gains, potentially adding up to $600 billion annually.

AI’s potential to automate routine tasks could also free up significant amounts of time for human workers. Studies indicate that generative AI could automate between 60% and 70% of the tasks currently performed by employees, dramatically increasing efficiency. For knowledge-based workers, particularly in high-wage and high-skill sectors, AI is poised to amplify productivity by reducing time spent on routine tasks, such as data analysis, customer service, and administrative work.

Transforming Labour Markets: A Double-Edged Sword

However, the rapid rise of AI is not without its challenges, particularly when it comes to labor markets. Many fear that the widespread adoption of AI could lead to massive job displacement, especially in developed countries where white-collar jobs are more susceptible to automation. According to the IMF, while 30% of U.S. jobs may be at risk of automation by AI, only 13% of jobs in India are likely to be affected, reflecting the differing technological capabilities and labor market structures across the globe.

At the same time, AI’s integration into the economy is expected to create new job opportunities, especially in fields that require advanced technical skills, such as AI development, data science, and cybersecurity. This pattern mirrors historical trends: when previous technological revolutions disrupted the labor market, they also created entirely new industries and job categories. A recent study by MIT found that 60% of the jobs in America today did not exist in 1940, highlighting the constant evolution of the labor market in response to technological innovation.

AI’s Role in Healthcare: Beyond Productivity

AI’s potential extends far beyond traditional sectors like manufacturing or finance. The healthcare industry stands to benefit greatly from AI’s ability to analyze vast amounts of medical data quickly and accurately. For example, AI systems can assist doctors by analyzing scan reports, identifying patterns, and recommending treatment protocols. AI can also reduce the burden of administrative tasks, such as summarizing doctors’ notes and processing insurance claims, thereby improving productivity in healthcare settings while also reducing costs.

Generative AI is now widely recognized as a general-purpose technology (GPT), similar to electricity or the personal computer

Such advancements could lead to significant improvements in healthcare delivery, making it more efficient and cost-effective. This would not only improve outcomes for patients but also contribute to economic growth by lowering healthcare costs for both consumers and governments.

The Path Forward

Generative AI is now widely recognized as a general-purpose technology (GPT), similar to electricity or the personal computer. These technologies have historically contributed to broad-based productivity growth across multiple sectors. The key to AI’s success as a GPT lies in its ability to integrate seamlessly with existing technologies and applications across various industries, driving continuous innovation and productivity gains.

The widespread adoption of AI in industries like logistics, manufacturing, education, and even creative arts has the potential to revolutionize how businesses operate and how workers contribute. As businesses continue to integrate AI into their processes, the resulting efficiencies will likely lead to increased competition, lower prices, and higher wages for workers in industries that embrace these changes.

AI’s transformative potential for global productivity cannot be overstated. Just as the steam engine and personal computers reshaped industries and economies, AI is positioned to trigger an unprecedented leap in productivity across nearly every sector. While challenges related to job displacement and economic inequality remain, the promise of a future in which AI drives substantial economic growth is undeniably exciting.

As AI continues to evolve, it is crucial for businesses, policymakers, and workers to embrace this change, adapting to new technologies and fostering an environment that allows AI to reach its full potential. The future of productivity is unfolding before us, and AI will be at the centre of this revolution.

Society

How a South Indian Startup Is Reimagining Agriculture From the Sky

From flood-ravaged fields in Kerala to precision farming systems powered by drones, Fuselage Innovations is rethinking agriculture through data, efficiency, and real-time intelligence.

Rishika Nair

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How Drone Technology In Agriculture Is Helping a South Indian Startup Reimagine farming
Image credits: Fuselage Innovations

Drone technology in agriculture is rapidly changing how farmers monitor crops, manage resources and improve productivity. A South Indian startup is now using aerial innovation and precision farming tools to reshape agriculture from the sky

In 2018, catastrophic floods swept across South Indian state of Kerala, submerging farmland and leaving behind more than visible damage. When the waters receded, they revealed a deeper crisis—soil chemistry had changed, salinity had increased, and farming systems that had sustained communities for generations no longer behaved the same way.

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For many farmers, the land had become unfamiliar.

For Devan Chandrasekharan, an aeronautical engineer with roots in farming, this moment marked a turning point.

“That moment made it clear that agriculture needed more than incremental change,” he says. “It needed a different way of understanding what’s happening in the field.”

Today, as co-founder of Fuselage Innovations, a Kerala-headquartered agritech company with operations expanding across southern India and early international pilots, Devan is part of a new wave of innovators rethinking agriculture through technology.

Drone technology in agriculture being used above farmland for crop monitoring and precision spraying in modern farming.
Image credits: Fuselage Innovations

Drone Technology in Agriculture: From Fields to Flight Paths

Modern agriculture is increasingly shaped by data. But while satellite systems offer scale, they often lack immediacy. Cloud cover, delays, and low resolution limit their usefulness in time-sensitive decisions.

“In farming, timing is everything,” Devan notes. “If you cannot act at the right moment, even the best data loses its value.”

Fuselage Innovations addresses this gap using drones equipped with multispectral sensors, capable of capturing real-time, high-resolution data directly from the field. These systems detect early signs of stress—nutrient deficiencies, pest risks, or water imbalances—long before they become visible.

Farming as a Predictive System

The company’s approach goes beyond aerial imaging. It is built around a stage-wise model that tracks crop growth from early development to harvest, linking each phase to targeted interventions.

This transforms farming from a reactive process into a predictive one.

“Instead of responding to visible damage, we can identify stress signals early and intervene precisely,” Devan says. “That changes the entire economics of farming.”

The results are significant. Field applications have shown yield increases of up to 35 percent, alongside a reduction of nearly 50 percent in pesticide and fertiliser use. Precision spraying has also cut input volumes dramatically—from 150–200 litres per acre to just 10–15 litres—reducing both costs and environmental impact.

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Scaling Beyond Boundaries

While the company’s early work was rooted in Kerala, its reach has expanded into Tamil Nadu and other parts of India, with pilot projects now extending to international markets such as Canada.

“Farming challenges may vary across regions, but the need for efficiency, sustainability, and better decision-making is universal,” Devan says.

Yet adoption remains a challenge. Farming is inherently risk-sensitive, and new technologies are often met with caution. To address this, the company initially offered its services free of cost, allowing farmers to see results before committing.

“Trust is the biggest barrier,” Devan says. “Farmers need to see the impact on their own fields before they adopt something new.”

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Devika Chandrasekharan, Devan Chandrasekharan

The Future from Above

As climate pressures intensify and resource constraints deepen, agriculture is entering a new phase—one where data and precision will define productivity.

“Technology alone cannot solve agriculture,” Devan emphasises. “But when it is aligned with the realities of farmers and ecosystems, it can become a powerful tool for transformation.”

What began in the aftermath of a flood has now evolved into a model for the future—where farming is not just guided by tradition, but informed by intelligence.

Because the future of agriculture may not lie only in the soil—but in how we see it from above.

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The Coal Paradox: More Coal Plants, Less Coal Power

A new Global Energy Monitor report shows global coal capacity rising in 2025 even as coal-fired electricity generation declines amid rapid renewable energy growth.

Rishika Nair

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Image credit: Dapur Melodi /Pexels

The world is building more coal plants, but using less coal than before. That contradiction lies at the centre of a new report by Global Energy Monitor (GEM), an international organisation that tracks energy infrastructure and the global shift toward cleaner power.

According to GEM, whose databases and research are widely used by institutions including the IPCC, IEA, UNEP and the World Bank, countries are continuing to expand coal power infrastructure even as coal’s role in electricity generation weakens globally.

The latest edition of GEM’s Boom and Bust 2026 report found that global coal power capacity grew by 3.5% in 2025, while coal-fired electricity generation declined by 0.6%. The report describes the trend as a major structural shift in the global energy system, where coal remains politically important in several countries even as renewable energy increasingly replaces it in practice.

China and India Drive Coal Growth

The contradiction is most visible in China and India, the world’s two largest coal consumers. Both countries commissioned large amounts of new coal capacity in 2025, even as coal generation declined because of record additions in solar and wind power.

China expanded coal capacity by 6% in 2025, while coal-fired generation fell by 1.2%. India recorded a similar pattern, with coal capacity increasing by 3.8% even as coal generation dropped by 2.9%.

The report suggests that coal’s decline is becoming increasingly durable despite global energy uncertainties, including geopolitical tensions affecting fuel supply routes such as the Strait of Hormuz. Renewable energy expansion has continued rapidly enough to reduce coal’s role in meeting new electricity demand.

Christine Shearer, Project Manager of GEM’s Global Coal Plant Tracker, described the trend as a defining paradox of the global energy transition.

“In 2025, the world built more coal and used it less,” she said. She added that 95% of all coal plant construction is now concentrated in China and India, even as both countries expand renewable energy fast enough to displace coal generation.

China’s Coal Pipeline Continues to Surge

China remained the dominant force in global coal expansion during 2025. The country recorded a record 161.7 GW of new and revived coal projects, while more than 500 GW of coal-fired capacity is currently under development.

The report warned that if these projects move ahead, China could remain locked into years of additional coal use throughout its 15th Five-Year Plan period from 2026 to 2030, despite official commitments to reduce coal consumption during the same timeframe.

India Expands Coal While Renewables Accelerate

India is also continuing major coal expansion plans. The country recorded 27.9 GW of new and revived coal proposals in 2025. Overall, India now has more than 107 GW of coal capacity in pre-construction planning and another 23.5 GW already under construction.

The Indian government has announced plans to add 100 GW of new coal capacity over the next seven years, even as renewable energy growth continues at record pace. In 2025, non-fossil fuel sources crossed the milestone of accounting for more than half of India’s installed electricity capacity.

Coal Development Shrinks Outside Asia

Outside China and India, coal development is shrinking rapidly. Only 32 countries were proposing or building new coal plants in 2025, down from 38 countries the previous year and less than half the 75 countries pursuing coal expansion in 2014.

Coal construction activity outside China and India accounted for just 5% of global coal construction capacity in 2025, marking a record low and highlighting how geographically concentrated coal development has become.

Several regions also made notable progress away from coal. Latin America achieved “No New Coal” status in 2025, while South Korea committed to a complete coal phaseout.

Türkiye, which is preparing to host COP31, now has only one active coal plant proposal remaining, compared with more than 70 proposed projects in 2015.

Delayed Coal Retirements Raise Concerns

The report also found that retirement plans for existing coal plants are slowing in several regions. Nearly 70% of coal-fired units scheduled for retirement globally in 2025 failed to retire as planned.

In the European Union, many delays were linked to energy security concerns that emerged during the 2022–23 energy crisis. In the United States, several ageing coal plants remained operational because of direct government interventions aimed at maintaining grid reliability.

Indonesia continued expanding its coal fleet, which grew by 7% in 2025, largely driven by captive coal plants supporting nickel and aluminium processing industries.

South Asia and Southeast Asia Show Mixed Trends

Elsewhere in South Asia, Pakistan rapidly expanded distributed solar energy, helping stabilise its electricity system against volatile fossil fuel markets. Bangladesh, meanwhile, continues to face fuel supply and technical challenges linked to its fossil-fuel-based power sector.

Across Southeast Asia outside Indonesia, coal commissioning declined for the third consecutive year. However, disruptions in regional gas supplies during 2026 led some countries to rely more heavily on existing coal infrastructure as a temporary backup source.

In Africa, new coal proposals remain limited and are mainly concentrated in Zimbabwe and Zambia.

Renewable Energy Reshapes the Global Energy Transition

The report concludes that coal is no longer expanding as a universally accepted solution for rising electricity demand. Instead, coal development is increasingly concentrated in a small number of countries, even as renewable energy demonstrates its ability to meet growing demand more efficiently and sustainably.

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India Built the Pipes. Now It Needs Better Water Data

JalSoochak is helping strengthen rural water delivery in India by turning paper-based records into real-time data for faster monitoring and response.

Rishika Nair

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Digital monitoring system used to improve rural water delivery under India’s Jal Jeevan Mission.
Jalsoochak is a platform designed to make frontline water delivery measurable, verifiable, and useful, all the way up the system. Image credit: By Special Arrangement

>> Rural water delivery in India has expanded rapidly under the Jal Jeevan Mission. But ensuring that water actually reaches homes every day now depends on better data, real-time monitoring, and systems like JalSoochak.

India built the pipes. Now comes the harder part.

Under the Jal Jeevan Mission (JJM), more than 1.5 crore rural households have been connected to piped water supply — a number that would have been unthinkable a decade ago. But connection is not the same as service. The pipe in the ground tells you nothing about whether water came out of the tap this morning, in what quantity, or whether the source feeding it is under stress.

That gap — between infrastructure built and service delivered — is where India’s rural water systems are now being tested. And it is a gap that turns, fundamentally, on data.

Why Rural Water Delivery Depends on Better Data

Pump operators and Jal Mitras are the ones who know. They manage supply cycles, monitor pumps, and record water delivery across thousands of villages every day. But in most states, those records live in paper registers. They cannot be verified, compared across districts, or acted on quickly. By the time a problem surfaces through the usual channels, it has often been festering for weeks. Engineers and administrators are left reconciling inconsistent figures instead of responding to the thing that actually went wrong.

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Arghyam, a Bengaluru-based philanthropic organisation founded by Rohini Nilekani, has been working on this problem. In partnership with Assam’s Public Health Engineering Department (PHED), it developed JalSoochak (Water indicator) — a platform designed to make frontline water delivery measurable, verifiable, and useful, all the way up the system.

How JalSoochak Is Transforming Rural Water Delivery

“Since the expansion of rural water infrastructure, understanding what is actually happening on the ground at scale has remained difficult. JalSoochak addresses this by enabling frontline workers to capture a simple image as evidence of water supply, while also giving Jal Mitras a verifiable record of their service delivery and attendance,” said Kailash Karthik, Secretary, Public Health Engineering Department, Government of Assam and Mission Director, Jal Jeevan Mission Assam.

The tool itself is straightforward. A frontline worker photographs a meter reading on their mobile phone. The image is processed using AI, the user verifies the reading, and it is logged as a daily record. What used to be a handwritten entry in a register — easily disputed, easily lost — becomes a time-stamped, verifiable data point that engineers, block-level officers, and state administrators can all see and act on.

JalSoochak platform supporting rural water delivery monitoring in Indian villages.
JalSoochak platform supporting rural water delivery monitoring in Indian villages. Image credit: By special arrangement

Accumulated over months, those daily records start to show things that no single entry would. A supply dip that recurs every fortnight. A pump whose readings are quietly declining. A source under pressure before anyone has formally flagged it. Problems get caught earlier, and the people responsible for fixing them have the evidence they need to act.

How Assam Is Digitising Rural Water Delivery

The numbers from Assam are substantial. More than 16,500 pump operators now use JalSoochak, collectively logging over 20 lakh readings. Together, those entries account for more than 37,600 million litres of water supply recorded.

Assam also made something else clear: what works in one state will not simply work everywhere. Each state has its own administrative logic, its own infrastructure, its own ways of capturing supply data. JalSoochak had to be rebuilt to absorb that variation rather than ignore it.

The platform now supports multiple modes of input — bulk flow meters, electric meter readings, pump operation duration, IoT devices, and manual entries. It works in local languages. Rather than running parallel to existing government systems, it is built to plug into them, so the data flows to where decisions are actually made, without creating extra work for anyone in the chain.

“JalSoochak is not just a technology platform. It is an attempt to strengthen service delivery to ensure that the investments made in rural water systems translate into reliable services for people. The journey from Assam to a national scale Digital Public Good has been about one core idea: making data useful for action, where it matters most,” said Deepak Gupta, Director of Digital Infrastructure and Government Partnerships, Arghyam.

JalSoochak is part of a broader effort to build a Digital Public Infrastructure for India’s water sector — a set of open, interoperable systems through which data can move across programmes and institutions, enabling governments to respond to problems where and when they actually occur, rather than when they finally show up in a report.

Crores of households now have a connection. The question that follows is simpler, and harder: is the water actually there? Getting a reliable answer to that question, consistently, across every village and every state, is what the next phase of rural water delivery will depend on.

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