Tech doesn't disrupt in its own right, it disrupts when it's widely deployed: David Bach President, IMD

AI promises incredible opportunities for businesses, from creating new value for customers and driving innovation to boosting productivity. At the same time, companies face substantial investment needs, the challenge of upskilling employees and questions around data and governance. This is a major transformation for each enterprise, and, like any transformation project, it requires a fairly clear vision of what you are trying to accomplish, David Bach, president and Nestle professor of strategy and political economy at IMD Business School, told Saumya Bhattacharya and Neil Ghai. Edited excerpts:

We often talk about AI as a technological and workplace disruptor. But what does AI disruption mean for the political economy?

Ultimately technology does not disrupt in its own right. Technology disrupts when it is widely deployed and when it leads to changes in the workplace. We are already seeing changes in the workplace. As a result, we are seeing changes in the labour market and society. Are we looking at another redistribution from labour to capital, or is it going to be more equitable than that? We are already seeing pushbacks against data centres in parts of the world because of their energy and water consumption. To some extent, that reflects some fears about AI. We are seeing governments invest in AI to stay at the cutting edge and avoid falling behind in this geopolitical struggle. You have concerns about data sovereignty and AI sovereignty. The effects are ultimately going to go way beyond just the workplace and workplace productivity, and they're going to be societal and political.


What should business schools be teaching students today that they weren't teaching two years ago, given the rapid rise of AI?

At IMD, we encourage students to use AI for research, presentations and problem-solving. All our students are now also learning to code. AI allows us to rethink how we spend our time. Tasks that once took hours such as quantitative analysis, building datasets, cleaning data or working extensively in Excel, can now be done much faster with AI and other technologies. But that makes it even more important for students to understand how the technology works, to question its assumptions, and to critically evaluate and verify its output.

India has a huge young workforce, but AI could simultaneously reduce demand for some entry-level white-collar roles. Do you see India's demographic dividend becoming harder to realise unless companies fundamentally rethink how they create entry-level jobs and develop talent?

Demography is a force that works almost like a glacier. It works relatively slowly, but it is an unstoppable force. I wouldn't put too much into the debate over entry-level jobs over the last year or two. India's youthfulness is an asset. It can harness and benefit from a demographic dividend. But it requires policies, institutions, and infrastructure. It means access to quality education and fostering geographic mobility necessary to match talent with opportunities. And, it requires companies that invest in the next generation and hire.

What will define the next decade more-the return of the state, the rise of geopolitics, or the disruption from AI?

I would pick geopolitics because it is going to shape the behaviour of states.... Ultimately, the AI revolution is going to be channelled through states. What states are going to be able to do with AI is going to depend in no small part on: Do they have access to chips? To data centres? How comfortable they are depending on others? Geopolitics is going to shape the role of states, and it is going to shape AI.