Davos 2024: AI Aids Productivity In Countries With High Labour Cost, Says ABB's Peter Voser
When companies look at the risk matrix, they would like to set up many factories of smaller capacity instead of one large manufacturing unit, he says.
Artificial intelligence aids productivity in countries with high labour costs, according to ABB Ltd. Chairperson Peter Voser.
Consumers today—specifically the younger generation—want to know the carbon footprint of products and want regionalised, localised supply chains to buy products that are environment-friendly, he told NDTV Profit's Niraj Shah on the sidelines of the World Economic Forum 2024 meet in Davos.
"One of the big factors for regionalised supply chains is that the consumer is changing. That's actually a market push that we need to take into account. Another thing is resilience, which is the dependency on one global manufacturing place; I think that's history," he said.
According to him, when companies look at the risk matrix, they would like to set up many factories of smaller capacity instead of one large manufacturing unit.
"That will be to the benefit of Asia, especially India, and Europe. You will see the benefits of the supply chain coming to all these various regions in different ways. We can also argue that this is inflationary, but this is where automation, robotics and AI come into the game," he said.
AI increases productivity in countries with high labour costs, like Switzerland and Germany, Voser said.
"Asia has one advantage, if you look at the GDP growth for the next 10–15 years, as they would be concentrating on their demands and manufacturing capacity. This is what helps with their growth. Asian countries will see a growth in manufacturing capacity," he said.
This is a golden opportunity for India, not in terms of mass production but for high-tech quality where it can combine elements like technology and robots with the knowledge base and the young population.
"India should compete on the higher end of the game, using the latest technology. I'm very optimistic about India," he said.
According to Voser, there have been reforms and institutional changes in the past few years done by the current government under the leadership of PM Narendra Modi. "You cannot reverse them. This makes a big difference because doing business in India today is very different," he said.
"We positioned ABB in the two big revolutions that are ongoing in the world: one is building a new energy system and another is automation and robotics. But the fundamental thing is to be positioned in those two big markets, which will allow you to take the benefits of sustainability, AI and any future technology," Voser said.
