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New Delhi: India has proven the 'fallacy' of incompatibility of rapid <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> and a democratic political system, and the continuity of government and policies give industry the confidence of <keyword id="22932843" type="General" weightage="20" keywordseo="sustained-high-growth" source="keywords">sustained high growth</keyword>, <keyword id="19909974" type="General" weightage="100" keywordseo="Maruti-Suzuki" source="keywords" meta.keywordsubtype="org" meta.entityname="Maruti Suzuki" meta.hostid="261" meta.entityid="Maruti Suzuki">Maruti Suzuki</keyword> India Chairman R C Bhargava said on Tuesday. In his address to shareholders in the company's Annual General Meeting held virtually, he asserted that India's <keyword id="20442128" type="General" weightage="20" keywordseo="democratic-processes" source="keywords">democratic processes</keyword> will lead it to a sustained and more equitable society. Bhargava also said the industry and the government can work with trust and confidence with each other to achieve the goal of India becoming a developed country by 2047. "Over the years, I've heard people arguing that rapid economic development and a democratic political system are not really compatible. Our country has proved the fallacy of this line of thinking," he said. Asserting his point, Bhargava said, "We are now the fastest growing economy in the world, and our prime minister is one of the most respected global leaders." Periodically, he said, "the world has seen how deeply committed we are to the democratic processes." Referring to the recent general elections, he said it has "once again shown that hundreds of millions of people can vote in a peaceful manner and accept the results of that process." Bhargava, however, admitted that "the policies and strategies for equitable and rapid economic growth and development did take some time in being established". ".. But we did find the right path through peaceful democratic processes. This is in sharp contrast to what we have seen around us in many parts of the world and in our neighborhood," he said, without naming Bangladesh which is currently in turmoil following student-led violent protests that led to a regime change. "The continuity of the government and its policies to bring in faster economic growth with greater inclusivity and equity gives industry confidence of sustained high growth," Bhargava said. He further said industry and government can work with trust and confidence with each other to achieve the goal of India becoming a developed country by 2047. "It is the democratic processes which will lead us to a sustained and more equitable society," he said.

Continuity of government, policies give industry confidence of sustained high growth: Maruti Suzuki Chief

<ul class="summary-list"><li>Republicans are projected to maintain their majority in the House of Representatives.</li><li>That means Trump is set to have a trifecta, as he did in the first half of his first term.</li></ul>After more than a week counting outstanding ballots across several states, Republicans are officially projected to maintain control of the House of Representatives.According to projections from NBC and CNN, Republicans will win at least 218 House seats, enough to claim the majority. Several races still remain undecided, with ballots continuing to be counted. The GOP currently holds a 220-seat majority.Democrats picked up GOP-held seats in New York, Oregon, California, Louisiana, and Alabama, while Republicans flipped Democratic-held seats in Pennsylvania, Michigan, and North Carolina.The GOP also <a target="_blank" class="" href="https://www.businessinsider.com/republicans-win-senate-election-majority-election-2024-11">retook control</a> of the Senate, meaning President-elect Donald Trump will enjoy a governing trifecta for at least the next two years, as he did during the first two years of his first term.As a result of the GOP keeping the House, Trump will <a target="_blank" class="" href="https://www.businessinsider.com/congress-balance-of-power-results-competitive-republicans-democrats-2024-11">avoid the resistance</a> he encountered from a Democratic-led House during the last two years of his first term. Furthermore, he'll be dealing with a <a target="_blank" class="" href="https://www.businessinsider.com/trump-republican-party-more-compliant-this-time-2024-11">far more obedient GOP</a> than existed during the first two years — after several successive election cycles, the party has largely been remade in Trump's image.Congress is particularly important for Trump when it comes to<a target="_blank" class="" href="https://www.businessinsider.com/tax-cut-tariff-plan-outlook-presidential-election-scenarios-harris-trump-2024-10"> tax policy</a>. Many of his other policy goals can be accomplished via executive orders, but the incoming president will need congressional action to exempt tips, overtime pay, and Social Security benefits from taxation, as he's promised.About three dozen House races were considered to be competitive, ranging from Republican-held swing districts in traditionally Democratic states like New York and California to <a target="_blank" class="" href="https://www.businessinsider.com/david-schweikert-profile-trump-realignment-arizona-economic-interests-abortion-2024-10">suburban districts</a> across the country where Democrats have made inroads in recent election cycles.It took far longer to determine who controls the House than the Senate or White House in large part due to the slow counting of mail-in ballots in Arizona and California.Both House Speaker <a target="_blank" class="" href="https://www.businessinsider.com/who-is-mike-johnson-republican-speaker-house-louisiana-2023-10">Mike Johnson</a> and House Minority Leader <a target="_blank" class="" href="https://www.businessinsider.com/hakeem-jeffries-early-honeymoon-house-democrats-tension-progressives-2023-5">Hakeem Jeffries</a> are expected to remain in their respective roles, with internal leadership elections set to take place later this month.

Republicans keep the House, handing Trump a trifecta of government control

Narendra Modi, elected leader of the National Democratic Alliance (NDA) will take oath as <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s prime minister for a historic third term on Sunday evening at 7:15 PM. After a decade of full majority governance, Modi will now run a <keyword id="20018803" type="General" weightage="20" keywordseo="coalition-government" source="keywords">coalition government</keyword>, with the Telugu Desam Party and Janata Dal (United) as key partners. Despite being in coalition, experts feel that there won't be much change in the new government's economic agenda. Economists believe that <keyword id="20509939" type="General" weightage="100" keywordseo="Modi-3-0" source="keywords">Modi 3.0</keyword> will not slow down the reforms and to achieve the goal of Vikshit Bharat by 2047, <keyword id="20404815" type="General" weightage="20" keywordseo="economic-reforms" source="keywords">economic reforms</keyword> and policy reviews need to be continued across multiple sectors, including infrastructure, labour, and manufacturing. These reforms are deemed essential to drive economic growth and development in India. "The oft-repeated target of becoming a developed country by 2047 requires far-reaching reforms in the factor market, opening up of the economy and infrastructure development and a thrust towards labour intensive manufacturing. In a coalition environment it may not be easy to carry out big bang reforms, but the thrust of incremental reforms should be in this direction," said M Govind Rao, Member, Fourteenth Finance Commission and former Director, National Institute of Public Finance and Policy. Economists have noted that spending on <keyword id="20229510" type="General" weightage="20" keywordseo="populist-measures" source="keywords">populist measures</keyword> will increase because of coalition politics, however, the government will continue with its focus on "<keyword id="20054650" type="General" weightage="20" keywordseo="Made-In-India" source="keywords">Made In India</keyword>" reforms. Sectors like infrastructure and manufacturing will remain the priority of the government. "There's likely to be a swerve towards greater populist spending and some commitment of resources to states of alliance partners is also likely. But India's public finances are in relatively robust health and to be augmented by significant reserves from the RBI. India's infrastructure spending will continue apace but perhaps with greater private sector participation. Expenditure on defence modernisation and indigenisation will also undoubtedly continue" said Gautam Sen, retired political economist London School of Economics and author, Former member of the Indo-UK Roundtable and Senior Consultant UNDP. The full budget expected to be announced in July, will reflect the economic agenda of Modi 3.0. Many economists expect the Budget will likely see a spurt in welfare and support schemes mainly for farmers and poor. The Budget will indicate the policy priorities for the new coalition government and decide the growth trajectory for the next five years, On the economic front, economists have cautioned the government about the potential setbacks from a sluggish global economy and geopolitical crisis. "One constraint remains the sluggish world economy, which could suffer worse setbacks next year, though Indian growth has risen despite it. The unknown is the impact of external shocks of intensifying wars and uncertainty over energy prices" added Sen. Meanwhile, in a significant boost to the start of Modi 3.0, the Reserve Bank of India on June 7 revised upwards the <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> projection for the current fiscal to 7.2 per cent from 7 per cent on rising private consumption and revival of demand in rural areas. RBI Governor Shaktikanta Das said estimates released by the National Statistical Office (NSO) placed India's real gross domestic product (GDP) growth at 8.2 per cent in 2023-24.

Economists expect big bang reforms to continue under Modi 3.0

<ul class="summary-list"><li>US efforts to produce semiconductor chips will continue regardless of who wins the election.</li><li>Harris and Trump think domestic chip production is key for economic and national security reasons.</li></ul>No matter who wins the presidential election this November, President Joe Biden can rest easy knowing one thing: The US's <a target="_blank" href="https://www.businessinsider.com/tsmc-arizona-kate-gallego-semiconductor-industry-companies-phoenix-nonstop-flights-2023-10">chip manufacturing push</a> isn't going anywhere.Four industry experts told Business Insider that the Biden administration's efforts to boost the domestic production of semiconductor chips that power everything from <a target="_blank" class="" href="https://www.businessinsider.com/apple-iphone-chip-shortage-supply-constraints-2021-7">iPhones</a> to <a target="_blank" class="" href="https://www.businessinsider.com/chip-shortage-auto-industry-car-buying-dealerships-consumers-inventory-2022-12">cars</a> are likely to continue regardless of whether Vice President Kamala Harris or former President Donald Trump is sworn into office this January."I don't think there's going to be a considerable change in approach whether it becomes a Harris or Trump 2.0 administration," Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation and director of ITIF's Center for Life Sciences Innovation, told BI.While the semiconductor industry hasn't been a prominent campaign topic this election season, its future has ramifications for both national security and the economy, particularly in the swing state of Arizona. Both candidates have <a target="_blank" class="" href="https://kamalaharris.com/issues/">supported</a> investments in US chip <a target="_blank" class="" href="https://www.cnn.com/2024/07/23/tech/trump-taiwan-tsmc-chips-industry-hnk-intl/index.html">manufacturing</a>; however, experts told BI their approaches might differ given their differences in ideologies.Harris' campaign <a target="_blank" class="" href="https://kamalaharris.com/issues/">website</a> says that as president, she would build upon the Biden administration's progress and "support American leadership in semiconductors." While the Republican <a target="_blank" class="" href="https://rncplatform.donaldjtrump.com/?_gl=1*einmxh*_gcl_au*NDI4Mzk2ODMwLjE3MjkwODY3NTY.&amp;_ga=2.42154470.251159694.1729086756-205286004.1729086756">platform</a> posted on Trump's campaign website doesn't specifically mention the semiconductor industry, it calls for a "resurgence of American manufacturing." In the September debate, Trump voiced frustration about the <a target="_blank" class="" href="https://www.opb.org/article/2024/09/11/oregon-semiconductor-business-economy-chips-presidential-debate-kamala-harris-donald-trump/">decline</a> in US chip manufacturing in recent decades.When reached for comment, RNC spokesperson Anna Kelly said: "In his first term, President Trump lowered taxes for American manufacturers that produced goods in the USA and imposed tariffs to level the playing field for American companies." However, Kelly did not answer specific questions about what semiconductor policies Trump would support if he were reelected. The Harris campaign did not respond to a request for comment.<h2 id="84898fb3-cdc7-4771-ac8b-7c670541cdc9">Boosting US chip manufacturing is all about reducing threats from China</h2>In 2022, Biden signed the<a target="_blank" href="https://www.businessinsider.com/chips-act-bill-to-boost-us-chipmaking-competition-with-china-2022-7"> CHIPS and Science Act</a> into law, which provided $52.7 billion for American semiconductor research, development, manufacturing, and workforce development. This included <a target="_blank" href="https://www.businessinsider.com/trump-taiwan-china-semiconductor-chips-us-economy-trade-biden-election-2024-7">$39 billion</a> in manufacturing incentives for chip production in the US that spurred the construction of <a target="_blank" href="https://www.businessinsider.com/us-building-factories-census-data-chips-act-inflation-reduction-act-2023-6">factories</a> across the country.Much of this investment has flowed to the <a target="_blank" href="https://www.businessinsider.com/battleground-states-2024-presidential-election-road-white-house-2022-12">key swing state</a> of Arizona, where <a target="_blank" href="https://www.azcentral.com/story/money/business/tech/2024/09/24/arizonas-semiconductor-industry-what-to-know-about-the-booming-field/74371215007/">over 16,000</a> semiconductor industry jobs were created since 2020 and <a target="_blank" class="" href="https://www.businessinsider.com/tsmc-arizona-semiconductor-chip-fab-taiwan-china-president-joe-biden-2024-4">thousands more</a> are expected to be generated in the years to come. Phoenix is home to <a target="_blank" class="" href="https://www.businessinsider.com/tsmc-arizona-kate-gallego-semiconductor-industry-companies-phoenix-nonstop-flights-2023-10">roughly 80</a> semiconductor companies, including two of the largest chip manufacturers in the world: Intel and TSMC.The Biden administration's efforts may not persuade Arizonans to vote for Harris; recent polls show Trump with a <a target="_blank" class="" href="https://www.nytimes.com/interactive/2024/10/12/us/elections/times-siena-poll-arizona-toplines.html">narrow lead</a> in the state. But regardless of whether Harris and Trump come out on top, Arizona should continue to reap the economic benefits.In part, that's because most of the $39 billion in CHIPS Act incentives have already been <a target="_blank" href="https://www.businessinsider.com/taiwan-semiconductor-tsmc-biden-microchips-chips-act-election-china-arizona-2024-4">allocated</a> to specific companies and projects, experts told BI. And while much of that money has yet to be disbursed — it's doled out over time when companies hit certain construction and manufacturing milestones — both Harris and Trump are expected to generally stay the course."I suspect that either presidential candidate would continue to support the domestic semiconductor manufacturing base," Chris Miller, a nonresident senior fellow who focuses on semiconductors at the American Enterprise Institute and author of "<a target="_blank" href="https://affiliate.insider.com?h=d502c83643c3c12ead2e514cd3eaef0fff4f3f6742ca3f91026e1171ffd1ca23&amp;postID=670e8b5fe5b540830057f7f8&amp;postSlug=us-semiconductor-chip-production-continue-harris-trump-presidency-arizona-jobs-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.amazon.com%2FChip-War-Worlds-Critical-Technology%2Fdp%2F1982172002%2Fref%3Dtmm_hrd_swatch_0%3F_encoding%3DUTF8%26qid%3D%26sr%3D">Chip War: The Fight for the World's Most Critical Technology</a>," told BI.The Biden administration is betting that boosting domestic chip manufacturing will create American jobs and help the US avoid the type of <a target="_blank" class="" href="https://www.businessinsider.com/chip-shortage-impacting-cars-smartphones-pcs-gaming-consoles-2021-2">chip shortage</a> that wreaked havoc on supply chains during the pandemic. It could also make the US <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/asml-tsmc-semiconductor-chip-equipment-kill-switch-china-invade-taiwan-2024-5">less reliant</a> on chips sourced abroad by companies like <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/tsmc-power-players-14-execs-leading-worlds-biggest-chipmaker-2024-9">TSMC</a>, which produces <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.citigroup.com/global/insights/the-u-s-china-chip-war-who-dares-to-win">an estimated 90%</a> of the world's advanced chips. TSMC is based in Taiwan, which faces the potential threat of a <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/china-wants-taiwan-make-mistakes-excuse-trigger-blockade-navy-commander-2024-10">Chinese invasion</a>. There is also concern that China — which has <a target="_blank" href="https://www.businessinsider.com/china-planning-41-billion-semiconductor-fund-chip-war-heats-up-2023-9">invested heavily</a> in chip production — could gain an edge in the vital industry. The US has seen its share of overall chip production fall from <a target="_blank" href="https://www.businessinsider.com/why-us-doesnt-make-chips-semiconductor-shortage-2021-4">37%</a> of the world's supply in 1990 to <a target="_blank" class="" href="https://www.businessinsider.com/semiconductor-chips-jobs-hiring-arizona-tech-phoenix-tsmc-intel-china-2024-1">12%</a>.According to Mark Muro, a senior fellow at Brookings Metro, the CHIPS Act received <a target="_blank" href="https://www.businessinsider.com/chips-act-bill-to-boost-us-chipmaking-competition-with-china-2022-7">bipartisan support</a> in part because both parties want to prevent China from gaining a technological edge in <a target="_blank" href="https://www.businessinsider.com/china-us-chip-export-restrictions-nvidia-ai-2024-8">sectors like AI</a>."Both Harris and Trump basically agree that China is a serious threat to our technology future and that reshoring significant chip production is a critical national security priority," he said. "So all of that is good for continuity."While many factories remain under construction, the federal funding has already helped boost US chip production. TSMC, the world's leading chipmaker, has begun making chips for Apple at one of its <a target="_blank" class="" href="https://www.businessinsider.com/tsmc-phoenix-chip-semiconductor-factory-biden-global-economy-china-taiwan-2022-12">Phoenix factories</a>, two people familiar with the matter told Business Insider.Both candidates are also expected to continue the <a target="_blank" href="https://www.businessinsider.com/china-us-chip-export-restrictions-nvidia-ai-2024-8">export controls</a> the Biden administration implemented, which were intended to keep US-developed chip technology from companies <a target="_blank" class="" href="https://www.wsj.com/tech/ai/chinas-ai-engineers-are-secretly-accessing-banned-nvidia-chips-58728bf3">like Nvidia</a> out of China.To be sure, experts told BI that it's difficult to forecast which semiconductor-related policies Harris or Trump would pursue as president and congressional support would often be required to take action.<h2 id="f376ea9c-c222-402c-b79c-68816c89c76a">How Trump and Harris might disagree on semiconductors</h2>Harris and Trump's approaches to continuing US chip production could differ in some ways.For one, there's the question of whether the semiconductor industry will receive additional funding through a <a target="_blank" href="https://markets.businessinsider.com/news/stocks/us-seeks-semiconductor-supremacy-with-new-funding-initiatives-1033125691">second CHIPS Act</a>, which some government representatives think the country needs to solidify itself in the global semiconductor market."The CHIPS Act is too small to ensure national security," Dylan Patel, a chief analyst at the semiconductor research and consulting firm SemiAnalysis, told BI.Ultimately, it will be Congress — not the next president — that dictates whether additional legislation is passed. However, experts told BI that Harris would be more likely to push for this."A Harris administration would probably be more likely to advance a CHIPS Act 2.0, just given the Democratic party's general endorsement of industrial policy and willingness to invest significant sums to support industrial policy," Ezell said. "A Trump administration would probably not be opposed to a CHIPS Act 2.0, but it would probably be less likely to instigate one."There could also be differences when it comes to tax policy. Ezell said some semiconductor industry manufacturing incentives — including a <a target="_blank" href="https://www.manufacturingdive.com/news/chips-act-should-extend-2026-design-tax-incentive-sia-report-2024/727833/">25%</a> investment tax credit that's part of the CHIPS Act — expire in 2026. While congressional approval would be required to extend the credit, Ezell said Trump — who has generally supported <a target="_blank" href="https://www.businessinsider.com/donald-trump-tax-cuts-ceos-tim-cook-jamie-dimon-wall-street-2024-6">lower taxes</a> for corporations — may be more likely to support such a move.Trump is also more likely to push for a lower <a target="_blank" href="https://www.businessinsider.com/trump-tax-plan-tarriffs-benefits-top-earners-study-2024-10">corporate tax rate</a> that would boost profits for US businesses — including semiconductor companies.Differences in immigration policy could also impact semiconductor firms. According to a<a target="_blank" href="https://www.semiconductors.org/america-faces-significant-shortage-of-tech-workers-in-semiconductor-industry-and-throughout-u-s-economy/"> report</a> published last year by the trade and lobbying group Semiconductor Industry Association and Oxford Economics, the US semiconductor industry will face a shortage of 67,000 workers by 2030, including technicians, computer scientists, and engineers. Immigration could be <a target="_blank" href="https://www.semiconductors.org/chipping-away-assessing-and-addressing-the-labor-market-gap-facing-the-u-s-semiconductor-industry/">one way</a> to help fill this gap.While Trump has generally backed <a target="_blank" href="https://www.businessinsider.com/immigration-border-security-biden-trump-2024-election">more restrictive</a> immigration policies than Harris, experts told BI that both candidates have <a target="_blank" href="https://www.cnn.com/2024/06/20/politics/trump-green-cards-gradutate-college/index.html">supported</a> using immigration as a tool to address some domestic workforce needs."The current moment is an opportunity to create hundreds of thousands of new quality jobs, but it could be depressed by the addition of more barriers to immigration — whether high-skill or lower-skill," Muro said.Do you work in the semiconductor chip industry and have a story to tell? Reach out to this reporter at <a target="_blank" href="mailto:jzinkula@businessinsider.com">jzinkula@businessinsider.com</a>.

America's chipmaking push will continue no matter who gets elected

Last week, Donald Trump announced the creation of the <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-department-of-government-efficiency-donald-trump-ramaswamy-2024-11">Department of Government Efficiency</a>, which promises to "dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies." And to run the new cost-cutting department, Trump tapped the businessman he calls the world's "greatest cutter" — <a target="_blank" class="" href="https://www.businessinsider.com/gop-senator-waste-list-influence-elon-musk-spending-cuts-2024-11">Elon Musk</a>.If you're looking to take a chainsaw to the federal government, Musk seems perfectly suited to the job. At <a target="_blank" class="" href="https://www.businessinsider.com/twitter-x-elon-musk-startup-competitition-town-square-election-2024-10">Twitter,</a> he eliminated a staggering 80% of the staff — over 6,000 people. At <a target="_blank" class="" href="https://www.businessinsider.com/tesla-salary-database-elon-musk-pay-strategy-2024-11">Tesla</a>, he cut 10% of the workforce, saying the company needed to be "absolutely hardcore about headcount and cost reduction." He also laid off 10% of employees at <a target="_blank" class="" href="https://www.businessinsider.com/spacex-jared-isaacman-interview-polaris-dawn-space-walk-2024-11">Space X</a>, insisting his teams need to be scrappy and nimble. Cutting, for Musk, is generally Job No. 1.For the most part, Musk's slash-and-burn tactics have paid off. Twitter usage, according to Musk, is at an all-time high. Tesla's stock is up 28% over the past year. And SpaceX — now valued at $250 billion — is grabbing rockets out of the sky with <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-spacex-starship-landing-super-heavy-2024-10">giant chopsticks</a>. In the world of business, fewer workers often translate into higher profits.The question is: Can the cost-cutting tactics Musk has employed in the private sector work to corral waste and bloat in the federal government? Musk and his DOGE cochair, the biotech billionaire <a target="_blank" class="" href="https://www.businessinsider.com/why-elon-musk-cutting-federal-spending-could-work-2024-11">Vivek Ramaswamy</a>, have said they're looking to hire "super high-IQ small government revolutionaries" to help make $2 trillion in cuts — about a third of all federal spending — and to slash the federal workforce by as much as 75%. It's a dream that has eluded every Republican administration since Ronald Reagan — and it's one that may prove elusive even for Musk, the man now anointed as America's cost-cutter in chief.There's certainly no shortage of waste and inefficiency in the federal government that cries out to be streamlined. In 2019, the Defense Department forked over $22 million for lobster tails. In 2020, the IRS sent $1.4 billion in tax refunds to dead Americans. Millions of square feet in federal buildings sit unoccupied.In theory, a bold, outside figure like <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-donald-trump-elected-shadow-president-2024-11">Musk</a> could be the very thing needed to downscale an operation as vast and intractable as the federal government. Large organizations need a force of "creative destruction" to change, says Michael Morris, a professor at Columbia Business School. "Things don't go away on their own. You have to have somebody with a willingness to deliberately dismantle things if you're going to have innovation." And when a new figure institutes a massive shock to the system — whether at the government or private level — "it often backfires," says Morris. "There's often very fierce, active resistance to change." As <a target="_blank" class="" href="https://www.businessinsider.com/joe-biden-corporate-gerontocracy-aging-ceos-retirement-succession-replacement-2024-8">CEO</a>, Musk has the latitude to push past that resistance and overhaul company culture. But things are going to be different with DOGE. Despite its branding as a "department," the new outfit will operate only in an advisory capacity: Congress holds the ultimate responsibility for authorizing spending and <a target="_blank" class="" href="https://www.businessinsider.com/doge-how-to-apply-dm-job-application-elon-musk-2024-11">eliminating agencies</a>. Government, by design, is an intensely collaborative process, intended to hammer out the competing needs of different constituencies. Musk, by contrast, is accustomed to ruling by fiat."Musk certainly exercises a great deal of control in his companies that he won't have in the environment of the federal government, where we have checks and balances," says Andy Wu, an associate professor of business administration at Harvard Business School. "Even if Musk had the right idea for things, it's not so clear he could implement any of them."The federal government is infamous for holding on to past practices, even when they no longer make sense. Linda Bilmes, a senior lecturer in public policy at the Harvard Kennedy School, cites the continued minting of the penny, each of which costs three cents to produce. Last year, in an economy that has largely moved away from cash, the government spent $179 million forging pennies and nickels. Yet past calls to get rid of the penny haven't amounted to one red cent."The danger is if Elon Musk were to somehow think he is the first person who has ever looked at cost cutting in government," says Bilmes. "Many people who know a lot about government have proposed many good ideas. The potential for usefulness would be if he could take some already reasonably good ideas and help them get implemented."The <a target="_blank" class="" href="https://www.businessinsider.com/watchdog-dod-must-speed-up-weapons-deliveries-to-maintain-advantage-2024-6">Government Accountability Office</a> and inspectors general have already recommended a variety of potential targets. They aren't always flashy: This year, the GAO recommended agencies use predictive models to schedule maintenance, saying they could save $100 million or more. It also urged the IRS to focus on collecting taxes owed by sole proprietors, which could generate hundreds of millions of dollars in revenue. If the government implemented all 5,480 of its suggestions, the GAO estimated, it would "produce measurable financial benefits" of up to $208 billion.But so far, Musk has seemed more interested in the kind of flashy, small-bore proposals that attract clicks on X. He's taken to resharing what he sees as examples of waste — everything from $3 million spent on drug research that involved watching "hamsters fight on steroids" to a $20,000 grant that funded drag shows in Ecuador — and crowdsourcing them on the platform. Those sorts of items might generate outrage on <a target="_blank" class="" href="https://www.businessinsider.com/twitter-donald-trump-elon-musk-2024-11">Fox News</a>, but eliminating them won't do much to trim the federal government's $6,200,000,000,000 in annual spending.Then there's the politics of budget cutting. The last time Republicans succeeded at slowing government spending, under <a target="_blank" class="" href="https://www.businessinsider.com/reagan-secret-service-agent-says-trump-shooting-failure-for-agency-2024-7">Ronald Reagan</a>, they made deep cuts to areas of government that proved unpopular — including social welfare programs, student loans, and job training. Musk may see plenty of areas he'd like to slash, but a wide range of constituencies will inevitably push back against cuts to programs they consider essential. When it comes to federal spending, one person's waste is another person's bread and butter."People support the idea of improving how the government delivers services," says Joel Friedman, the senior vice president for federal fiscal policy at the Center on Budget and Policy Priorities, a progressive think tank. "I think people would take a different view if you end up gutting programs they depend on and care about." Efficiency always sounds like a good thing, until it comes for something you love.Beyond the question of where to cut, Musk will face intense scrutiny over why he's targeting certain areas of government. His role at DOGE is rife with the potential for conflicts of interest. SpaceX, for example, has received nearly $20 billion in federal contracts since 2008, and Musk has been sharply critical of the Federal Aviation Administration, viewing it as an obstacle to launching his powerful <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-trump-spacex-starship-rocket-milestone-election-2024-10">Starship</a>. And his massive investments in electric vehicles and social media are dependent on all sorts of federal spending and oversight. When it comes to how the government interacts with the marketplace, the world's richest man inherently has a lot of skin in the game. Musk's companies did not respond to requests for comment. But Brian Hughes, a spokesperson for Trump's transition team, says it plans to ensure that those involved with DOGE "are compliant with all legal guidelines related to conflicts of interest."Those concerns also touch on the larger question of what Trump and his allies hope to accomplish by reducing the size of government. Calls for reducing "inefficiency" and "bureaucracy" have long been a euphemism for Republicans eager to reduce or eliminate federal oversight of everything from industrial pollution to airline safety. Less government is not necessarily better government, and there are plenty of federal agencies that remain so understaffed and underfunded, from the IRS to the Veterans Administration, that they're unable to perform even their most basic functions. The GOP's aim of cutting spending, a leading Reagan ally once acknowledged, is to shrink government to the size where conservatives can "drag it into the bathroom and drown it in the bathtub." On Friday, Ramaswamy directly linked DOGE to the Reagan-era dream of smaller government, promising that the new agency will finish its work by July 4, 2026 — the 250th anniversary of the Declaration of Independence.And even when conservatives have succeeded at cutting costs, it's done nothing to slow the pace of government spending. Reagan slashed $22 billion in social welfare programs during his first two years in office — savings that were more than offset by his tax cuts and military spending, which nearly tripled the national debt. And in 1981, when a deep recession hit, carving up the safety net left the millions of Americans who were mired in poverty with even fewer resources to get by.It's also important to remember that Musk did more than downsize X — he also used the platform to elevate far-right talking points and unfounded conspiracy theories. In short, he reshaped it to serve his own political ends, making it meaner as well as leaner. It remains to be seen if Musk will do the same with DOGE. There are plenty of places where Uncle Sam could spend America's hard-earned tax dollars more wisely. But there are also plenty of places where the man Trump's family now refers to as "Uncle" Elon could deploy what DOGE calls "unglamorous cost-cutting" to bend the federal government to serve his own financial needs.Musk has acknowledged that Americans will feel "hardship" as a result of the cuts he wants to see implemented. But that doesn't mean he won't be able to juice more performance out of fewer resources, as he did at his own companies. When Musk slashed the workforce at Twitter, critics predicted that the app would collapse without enough staff to maintain it. Two years later, after a few initial glitches, it works much the same as before — at a far lower cost. Doubting Musk, even when he seems to be operating at his most extreme, can be a fool's game.<a target="_blank" rel="" class="" href="https://www.businessinsider.com/author/amanda-hoover">Amanda Hoover</a> is a senior correspondent at Business Insider covering the tech industry. She writes about the biggest tech companies and trends.

Elon Musk downsized Big Tech. Can he do the same to Big Government?

<ul class="summary-list"><li>President-elect Donald Trump has tasked Elon Musk with slashing government spending.</li><li>Defense could be a prime target: It's the largest discretionary spending category in the federal budget.</li></ul>President-elect Donald Trump has tapped <a target="_blank" class="" href="https://www.businessinsider.com/tesla-ceo-elon-musk">Elon Musk</a> to help spearhead cuts to government spending, and the defense sector could be a prime target.The Defense Department's budget for the 2024 fiscal year is $841 billion, roughly 12.5% of the total federal budget, and the Pentagon has struggled with cost overruns and waste.Musk plans to review federal spending as part of a newly created "Department of Government Efficiency" — or <a target="_blank" class="" href="https://www.businessinsider.com/trump-elon-musk-vivek-ramaswamy-department-government-efficiency-doge-2024-11">DOGE</a>. It's not an official agency, and Congress controls budgets for federal agencies. DOGE's role may be limited to <a target="_blank" href="https://www.businessinsider.com/elon-musk-vivek-ramaswamy-doge-government-efficiency-what-us-spends-2024-11">offering advice to Trump</a>.There are still a lot of unknowns around DOGE as it solicits direction from X, formerly <a target="_blank" href="https://www.businessinsider.com/elon-musk-twitter">Twitter</a>, including where and how it'll find up to $2 trillion in promised cuts.But Musk's past comments hint at one area he could target: defense contracts.Musk has criticized government contracts with top defense companies that put the government on the hook for overages in the construction of warships, aircraft, and combat vehicles. And his company, <a target="_blank" class="" href="https://www.businessinsider.com/spacex-elon-musk">SpaceX</a>, has won some government contracts by bearing higher risks of cost overruns.<h2 id="83ac3479-807f-4415-a020-96d80c7f3594">Musk's way of doing business</h2>Before Musk founded SpaceX in 2001, NASA and the Pentagon often used "cost-plus" contracts, which reimbursed contractors for their expenses and provided a set profit margin.<div type="image" title="President-elect Donald Trump listens as Elon Musk speaks during a campaign rally in Pennsylvania last month." height="2365" width="3541" msid="115359364" hostid="261" sizebytes="435768"></div>The contracts allowed for cost overruns and placed much of the risk on the US government, Clayton Swope, a senior fellow at the Center for Strategic and International Studies think tank, told Business Insider.Musk compared the contracts to "gravy trains" in journalist Walter Isaacson's biography of the billionaire. "You just can't get to Mars with that system," Musk said. "They have an incentive never to finish. If you never finish a cost-plus contract, then you suckle on the tit of the government forever."Musk built SpaceX's business model around fixed-price contracts. This means the government and contractors set a price for the project at the onset, and the company is paid predetermined amounts once it hits certain milestones.SpaceX has had several fixed-price contracts with NASA, including a <a target="_blank" class="" href="https://www.nasa.gov/news-release/first-contracted-spacex-resupply-mission-launches-with-nasa-cargo-to-space-station/">$1.6 billion contract</a> in 2008 for 12 missions under the agency's Commercial Resupply Services program and a <a target="_blank" class="" href="https://www.nasa.gov/wp-content/uploads/2018/07/spacex_nasa_crs-5_presskit-105.pdf">$2.6 billion contract</a> in 2014 that covered six crewed missions to the International Space Station.The US government previously reserved fixed-price contracts for off-the-shelf products that did not need to be specially made for the government, but SpaceX demonstrated that it could fund missions more efficiently, Swope said.Without the processes and tracking required for cost-plus contracts, companies like SpaceX "can be more agile to changes in the market and iterate on their products faster," Swope said. "When it's done right, it can be beneficial to both the government and the company."<div type="image" title="A SpaceX Falcon Heavy rocket with a NASA spacecraft bound for Jupiter lifts off from pad 39A at the Kennedy Space Center in October." height="2969" width="4453" msid="115359363" hostid="261" sizebytes="315044"></div><h2 id="b3b24f6e-1253-4bfb-9623-5ba146b04d68">Overspending and delays</h2>The Pentagon has often been criticized for mismanagement, delays, and ballooning costs on expensive systems. Earlier this year, for instance, a government watchdog found that the F-35 stealth fighter program has <a target="_blank" href="https://www.businessinsider.com/us-f-35-stealth-fighters-to-fly-less-costs-soar-2024-4">become more expensive</a>, with expected lifetime costs topping $2 trillion, even with the aircraft flying less often than in the past.The defense industry, like the military, has also been called to account. Major shipbuilding projects, for example, are severely delayed. Coming off problems with the Zumwalt-class destroyers, first-in-class USS Gerald R. Ford, and the Littoral Combat Ship, new constructions like the next Ford-class carrier, Constellation-class frigate, and Columbia-class submarine are, in some cases, <a target="_blank" class="" href="https://www.businessinsider.com/us-navy-grappling-with-another-ford-class-supercarrier-delay-2024-4">years behind schedule</a>. This is a concern as the US military aims to <a target="_blank" class="" href="https://www.businessinsider.com/america-not-ready-china-war-military-economy-2023-5">maintain its edge</a> against its "pacing challenge" China.Separately, DoD has faced criticism over use-it-or-lose-it spending toward the end of the fiscal year, overpayment for common products, and seven consecutive failed audits of the department's $4.1 trillion in assets and $4.3 trillion in liabilities.To tackle the contracting conundrum and save money, Mike Gallagher, a former Republican congressman from Wisconsin and the current head of defense at Palantir Technologies, suggested in a Wall Street Journal <a target="_blank" href="https://www.wsj.com/opinion/two-years-to-prevent-world-war-iii-trump-sec-def-needs-to-overhaul-bureaucracy-cut-waste-c9a162d8?mod=opinion_lead_pos5">op-ed</a> this week that the incoming Pentagon leadership should enforce fixed-price contracting to put more burden on private contractors rather than the US government."The Defense Department's cost-plus contracting model has destroyed competition and innovation while exploding costs," Gallagher wrote, adding that the defense secretary should be required to sign off on cost-plus contracts.Musk's new initiative could recommend exactly this: a move away from cost-plus contracts toward fixed-price contracts.<div type="image" title="The aircraft carrier USS Gerald R. Ford at Newport News Shipbuilding in Virginia in April 2016." height="2475" width="3841" msid="115359367" hostid="261" sizebytes="649290"></div>But fixed-price contracting may have its own set of problems. Bryan McGrath, a retired naval officer and the managing director of The FerryBridge Group LLC, responded to Gallagher's article <a target="_blank" href="https://x.com/conswahoo/status/1857138300307624153?s=46">on social media</a>, saying private companies shouldn't have to face all the costs for systems that only the US government wants to buy.Todd Harrison, a senior fellow at the American Enterprise Institute who focuses on defense strategy and budgeting, said switching from cost-plus to fixed-price contracting doesn't necessarily save the government money. It also doesn't necessarily produce more effective systems designed to withstand combat or decades of use."What it does is, by moving the risk to industry, it creates more stability for government and what they're going to pay for things," he told BI, adding that "it puts better incentives on industry, because if industry has a cost overrun, they pay for it — it's coming out of their profit. If they can deliver below cost that they expected, they can make more money. So it really just changes the incentives."Harrison said that there had already been a shift toward firm-fixed-price contracts, which tends to advantage smaller and newer defense companies — a trend he expects will accelerate during the Trump administration. But there are some areas where cost-plus contracts are sure to continue.Shipbuilding, especially for projects like aircraft carriers and nuclear-powered submarines, is often arranged with large, multi-year contracts. This is because there may be only one company that can build the system, with one buyer (the Pentagon), and the product is unique to the US military.<div type="image" title="A digital rendering of the Constellation-class frigate." height="869" width="1876" msid="115359361" hostid="261" sizebytes="144122"></div>"In those areas of the defense-industrial base," Harrison said, "you have to manage it more like a public utility, where the free market does not exist, and free market principles do not work."<h2 id="719bae83-1982-40bc-bd4e-defb6b11920c">More efficient programs</h2>Mid-development changes to weapons systems designs are a major cost driver. To tackle this, the government could fix requirements for these systems early in the design process and enforce stricter rules around changes."One way that we know saves money is if you fix a design and don't add features," Michael Bohnert, a licensed engineer at the RAND Corporation, told BI.Today's F-35, for example, is "almost a different plane" than what was defined in its original requirements. Changes in scope have added costs. "You look at other programs that have been pretty narrowly defined — they've stayed in budget," he said.Archer Macy, a retired Navy admiral and missile defense expert at CSIS, told BI there's a history of abusing contracts where there's too much fluidity with requirements and specifications, making them vulnerable to changes.He said the government needs to find the "right type of contract for the right purpose (where you are in the development and acquisition cycle), stick to and don't abuse requirements and specs, and make people accountable."<div type="image" title="Aerial view of the Pentagon" height="3598" width="5396" msid="115359368" hostid="261" sizebytes="1410730"></div>Musk's new initiative may target other areas of Pentagon spending, as well.He could consider reducing the Pentagon's large civilian workforce and officer corps, for example, or crack down on instances like the US Air Force paying more than <a target="_blank" href="https://www.businessinsider.com/us-air-force-wildly-overpaid-c-17-bathroom-soap-dispenser-2024-10">80 times the regular commercial value</a> for bathroom soap dispensers for its C-17 aircraft.Overall, experts warned against any changes that could harm US warfighting capabilities or compel companies to cut corners and deliver substandard weapons systems."However well-intentioned, the reach for efficiency could also undercut your military effectiveness, and you got to keep that in balance," John Harvey Jr., a retired Navy admiral, told BI.In fact, some members of Congress think the US should spend even more on defense. Mississippi Sen. Roger Wicker, the highest-ranking Republican on the Senate Armed Services Committee, <a target="_blank" class="" href="https://www.wicker.senate.gov/2024/5/senator-wicker-unveils-major-defense-investment-plan">warned earlier this year</a> that the country's defense investment is not sufficient to counter America's adversaries."Our defense industrial base is underfunded and unprepared for the wars of today, tomorrow, and the foreseeable future," his office said in May.

Elon Musk is looking for trillions in government waste, and defense is a massive potential target

<ul class="summary-list"><li>Speaker Mike Johnson has pulled a government funding bill amid party dissent, risking a shutdown.</li><li>The government will shut down on October 1 if no extension is passed, affecting federal operations.</li></ul>America might be headed for another government shutdown.<a target="_blank" class="" href="https://www.businessinsider.com/mike-johnson-trump-rally-shooting-political-rhetoric-election-2024-7">Speaker Mike Johnson</a> on Wednesday pulled a temporary government funding bill off the House floor hours before a planned vote amid dissent within his own party."No vote today because we're in the consensus-building business here in Congress. With small majorities, that's what you do," Johnson told reporters outside the House chamber, per The Associated Press. "We're having thoughtful conversations, family conversations within the Republican conference and I believe we'll get there."Johnson's bill is tied to the SAVE Act, legislation that would require all Americans to submit proof of citizenship in order to vote and complicate the national voter registration process before a major election. The measure is <a target="_blank" class="" href="https://www.politico.com/newsletters/inside-congress/2024/09/04/why-johnsons-funding-plan-could-fail-in-the-house-00177426">universally opposed</a> by Democrats and some Republicans.The government will shut down on October 1, if no funding extension is passed. While that gives Congress over two weeks to pass a bill, lawmakers are anxious to leave Washington so they can return to their campaign trails ahead of Election Day.Given their razor-thin majority, Republicans can only afford to lose four votes if every lawmaker shows up and Democrats remain united in opposition. Senate <a target="_blank" class="" href="https://www.businessinsider.com/chuck-schumer-hakeem-jeffries-democratic-leaders-biden-drop-out-2024-7">Majority Leader Chuck Schumer</a> has blasted Johnson's spending bill and his insistence to tie it to the controversial proposal.<a target="_blank" class="" href="https://www.businessinsider.com/trump-lost-debate-polls-prediction-market-reaction-taylor-swift-rematch-2024-9">Former President Donald Trump</a> encouraged Republicans to reject any deal if voting security assurances are not attached to the funding bill.The spending bill would include money allocations for major federal operations, including Veterans Affairs benefits, portions of the farm bill, healthcare programs, and more.The looming shutdown comes as presidential campaigns between Trump and Democratic nominee Kamala Harris are <a target="_blank" class="" href="https://www.businessinsider.com/kamala-harris-trolled-donald-trump-about-rally-crowd-size-2024-9">kicking into high gear</a>. There have been previous shutdowns in election years, but the nation's politics were nowhere near as divided as they are now.A government closure could prevent thousands of government workers from getting their paychecks.Here's a breakdown of what happens, what's at stake, and why this time could be different.<h2 id="ac93a634-c6e1-422e-a672-32090be618e1">What happens when there's a government shutdown?</h2><a target="_blank" href="https://www.businessinsider.com/biden-funding-social-security-student-loan-repayment-wic-food-benefits-2023-8">When the government shuts down</a>, federal agencies classify their employees as either "essential" or "nonessential." All "nonessential" employees will be furloughed until the government reopens, meaning they will not be able to work or be paid.The government employee umbrella includes millions of people from various organizations, including the Department of Homeland Security and National Parks. Not only would widespread staff shortages be disruptive for consumers, but many of those employees might <a target="_blank" class="" href="https://www.businessinsider.com/poverty-line-leaves-behind-low-income-americans-snap-medicare-wic-2024-6">struggle to make ends meet</a> without an income.Americans could notice disruptions. Airports could be short-staffed because <a target="_blank" class="" href="https://www.businessinsider.com/government-shutdown-us-airports-lines-tsa-workers-pay-wages-2019-1">TSA agents</a> would lose pay, natural disaster and emergency response programs could be delayed, and some social safety net programs like <a target="_blank" class="" href="https://www.businessinsider.com/buying-groceries-snap-food-stamps-cant-afford-essentials-credit-card-2024-6">SNAP</a> could be limited. <a target="_blank" class="" href="https://www.businessinsider.com/category/student-loan-forgiveness">Student loan forgiveness</a> and financial aid programs could also be paused, along with all federal small business loan servicing.Government shutdowns have previously lasted anywhere between three hours and five weeks, but the length depends on Congressional action. The only way to reopen the government is for lawmakers to pass a spending bill.<h2 id="37b589fe-4e6f-4ccc-971a-ff37493030ac">Has this happened before?</h2>Congress <a target="_blank" class="" href="https://www.businessinsider.com/government-shutdown-2023-update-likelihood-when-will-it-start-2023-9">narrowly avoided a shutdown </a>last year, after Republicans couldn't agree on a temporary funding resolution. Then-House Speaker Kevin McCarthy <a target="_blank" class="" href="https://www.businessinsider.com/kevin-mccarthy-ousted-speaker-house-first-time-history-matt-gaetz-2023-10">was later ousted</a> from his role over his handling of negotiations with President Joe Biden.The <a target="_blank" class="" href="https://www.businessinsider.com/government-shutdown-record-day-trump-democrats-fight-over-border-wall-2019-1">longest government shutdown in US history</a> occurred between December 2018 and January 2019. The shutdown lasted 35 days, causing 800,000 federal employees to go without pay and costing the federal government <a target="_blank" href="https://www.jec.senate.gov/public/index.cfm/democrats/2023/9/the-economic-costs-of-a-republican-shutdown">billions of dollars</a>.Trump is advocating for a shutdown, calling on fellow Republicans to only accept a spending bill if it includes promises of election security."If Republicans in the House, and Senate, don't get absolute assurances on Election Security, THEY SHOULD, IN NO WAY, SHAPE, OR FORM, GO FORWARD WITH A CONTINUING RESOLUTION ON THE BUDGET," Trump posted on his social network, Truth Social.<h2 id="993cc001-ac06-4539-9ae3-5cca92bca252">How could this impact the election?</h2>Neither side sees the benefit of a government shutdown. The pay for millions of government employees would be at stake. In fact, if a shutdown dragged on, active-duty servicemembers could miss their pay. Polling shows that Republicans often bear the blame for shutdowns by insisting on policies being implemented before agreeing to funding measures. <a target="_blank" class="" href="https://www.washingtonpost.com/politics/2019/01/23/gop-is-very-familiar-shutdown-position-losing-it-badly/">Americans blamed Republicans</a> by 23 points more than then-President Bill Clinton for a 21-day shutdown in 1995, according to The Washington Post. Clinton went on to win the 1996 presidential election in a landslide 379 to 159 electoral college victory.Trump exacerbated the blame Republicans typically receive when he surprisingly <a target="_blank" class="" href="https://www.businessinsider.com/government-shutdown-schumer-trump-length-months-years-2019-1">claimed credit</a> for a 2018 shutdown.Still, a shutdown hasn't occurred this close to a major election in decades — and it could shape campaign optics ahead of November.

America might be headed for a government shutdown (again)

A significant percentage of organizations see artificial intelligence as the key to <keyword id="19959627" type="General" weightage="20" keywordseo="competitive-advantage" source="keywords">competitive advantage</keyword>. According to the "Industry 5.0 and <keyword id="19899640" type="General" weightage="100" keywordseo="AI" source="keywords">AI</keyword> Report," compiled by <keyword id="22094332" type="General" weightage="20" keywordseo="BML-Munjal-University" source="keywords" meta.keywordsubtype="org" meta.entityname="BML Munjal University" meta.hostid="153" meta.entityid="BML Munjal University">BML Munjal University</keyword>, 44% of organizations have experienced a significant boost in productivity through <keyword id="20230984" type="General" weightage="20" keywordseo="AI-integration" source="keywords">AI integration</keyword>. Additionally, 21% reported that AI can play a pivotal role in driving innovation, enabling the development of new products, services, and business models, particularly in sectors like finance, healthcare, manufacturing, and marketing. "Approximately 33% of organizations focus on product development, while 29% leverage AI for customer service through chatbots and robotic process automation (RPA). Marketing teams, representing 19% of businesses, utilize AI for trend analysis, while 13% apply AI to improve supply chain management. Financial planning, though less prominent (6%), benefits from AI's efficiency-boosting capabilities," the report added. Based on responses from 1,000 professionals and in-depth interviews with 50 industry experts, the report highlighted a significant shift in how businesses are integrating AI into their strategies. While AI has delivered numerous benefits, the report also highlights some key challenges. "Around 34% of organizations face a critical shortage of AI-trained personnel, which hinders their ability to fully leverage AI's potential. This skills gap highlights the need for better AI education and continuous learning programs. In fact, 31 %of organizations have started mentorship initiatives to help develop talent," the report said. AI's impact varies by sector; in mergers and acquisitions, 28% have seen benefits in personalized campaigns, but data privacy remains a hurdle for 22%. IT and augmented reality sectors report enhanced productivity (44%), but struggle with talent shortages. "In finance, AI improves risk management, though 18% face regulatory challenges. Healthcare has seen advancements in diagnostics, yet ethical concerns remain significant for 18% of professionals. In manufacturing, 23% recognize process optimization benefits from AI, but 21% struggle with legacy system integration," it said. Qualitative interviews with industry professionals reveal that transparency in AI decision-making is crucial, with 21% expressing concerns about the "black box" problem. "There are also ethical concerns, with 20% of respondents mentioning algorithmic bias and 22% expressing worries about data privacy. These issues show the need for responsible <keyword id="20355187" type="General" weightage="20" keywordseo="AI-governance" source="keywords">AI governance</keyword>, prompting 38.3% of organizations to adopt <keyword id="21198326" type="General" weightage="20" keywordseo="ethical-AI" source="keywords">ethical AI</keyword> guidelines to ensure transparency," it said. According to Pratik Modi, Dean School of Management, BML Munjal University, AI enhances human-machine collaboration. "As organisations embrace this new era, the report's findings offer a roadmap for integrating AI while prioritizing ethical standards and fostering human creativity," it said.

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