AI + ML
IT services companies are largely immune to the AI apocalypse, but the outlook for entry-level jobs is not good
The Council for Research on International Economic Relations, an Indian think tank, has found that AI is not an imminent threat to the country’s IT services sector.
The organization (ICRIER) released a case study this week titled “Same Again with Al and Jobs.” [PDF] The researchers found that, like other waves of automation, AI will hit the job market, with initial fears of large job losses, but over time “productivity gains will reduce costs, significantly expand consumption of AI-enabled products, and ultimately create net job opportunities.”
To reach this conclusion, ICRIER surveyed 651 IT companies and interviewed industry leaders.
The organization notes that although hiring in India’s IT sector has slowed, (register (We found that the big four outsourcing companies are stuck), the strongest demand from employers is for roles such as software analysts, developers, and mathematicians who are most exposed to AI.
The think tank believes that adoption trends suggest that “AI is primarily functioning as a complement to, rather than a replacement for, highly technical tasks.”
The majority of companies surveyed by ICRIER reported “significant productivity gains after implementing AI, which is reflected in higher quality output and time and cost savings.”
27% of companies surveyed by the think tank believe that AI will lead to fewer employees, while 28% expect they will hire more employees. 44% expect there will be no major changes.
However, more than half of respondents expected recruitment of entry-level staff to slow, and the think tank is already seeing a “general restraint” in early career recruitment.
While ICRIER is confident that the survey is accurate, we believe that future adoption projections may be a bit pessimistic.
“History suggests that many of the most impactful technology-driven jobs are created by startups that are not yet established or are currently taking shape in classrooms and garages,” the study says. “While some incumbents are likely to survive and thrive in the AI era, it is AI-centric startups that are most likely to disrupt incumbents and create the bulk of future jobs.”
ThinkThink therefore finds “good reason to be optimistic about India’s employment prospects in the AI era”.
“As the country has one of the largest concentrations of AI-skilled workers in the world, and global demand for AI-enabled products is expected to grow rapidly, Indian workers will see significant and sustained growth in demand for their services over the medium to long term.”
All of this suggests that the joke “My job was outsourced to India and all I got was this T-shirt” may be more common than the lament “My job was outsourced to AI.”
However, ICRIER has warned the Indian government that it should not assume that the advent of AI will automatically advance the country’s technology sector.
“Indian IT companies are not hiring enough people with skills to operate language models at scale, are not expanding their R&D departments, and, most importantly, are not investing enough in training and upskilling,” the study found. “The lack of qualified AI trainers, the limited AI skills of new entrants to the labor market, and the policy and regulatory uncertainty around AI are challenges that must be urgently addressed if India’s IT sector is to harness the full power and potential of generative AI.” ®
