The impact of AI on the workforce and risks to sustained high growth – Digital Transformation News

The number of jobs in India's BPO sector is expected to decline significantly due to the increasing adoption of artificial intelligence (AI), Finance Minister Nirmala Sitharaman said in the Economic Survey for 2023-24 released on Monday. The survey stated that the impact of AI on the job market will be mixed.

For example, manufacturing has been slow to adopt AI because AI-powered industrial robots are not as agile or cost-effective as a human workforce, whereas in inventory and supply chain management, AI applications have the potential to complement the workforce.

Meanwhile, the survey showed that the Indian economy On average, about 7.85 million jobs need to be created. To cater to the growing workforce, 7.85 million jobs need to be created annually in the non-farm sector till 2030. To meet the demand for 7.85 million jobs per year in the non-farm sector, the study said there is scope to complement existing schemes like PLI (to generate 6 million jobs in five years), MITRA Textile Scheme (to generate 2 million jobs) and MUDRA.

The study notes that the BPO sector is particularly at risk, with GenAI revolutionising the performance of routine cognitive tasks through chatbots and predicting that jobs in the sector will decline significantly over the “next decade”.

More importantly, the survey highlights the uncertainty surrounding AI and its impact on the job market. Potential obstacle for Indiais expected to maintain a high growth rate over the next few years. Citing an IMF study, the study said that 26 percent of jobs in India involve AI, while 14 percent will make greater use of AI.

Experts said AI is evolving at a rapid pace and hence its impact on various professions is being constantly evaluated. “AI will redefine jobs but it is unlikely to wipe out entire industries. Human creativity and judgement will always be essential. With the advent of generative AI, we are closely monitoring its impact on various professions,” said Sashi Kumar, head of sales, Indeed India.

Apart from job creation, the study noted that job quality and social security have their own importance: “Increased employment of flextime workers through recruitment agencies can be a means to ensure social security for informal workers,” it said.

However, the study said total factory employment grew by 3.6% per year between 2013-14 and 2021-22. In absolute numbers, factory employment in India grew from 10.4 million to 13.6 million during the period.

Citing data from the Annual Survey of Unincorporated Enterprises for 2022-23, the survey highlighted that the total employment in these enterprises has fallen from 111 million in 2015-16 to 109.6 million in 2022-23.

“While manufacturing saw a decline of 5.4 million workers, employment growth due to trade and service sector labour expansion meant that the overall decline in the number of workers in unincorporated enterprises was limited to about 1.65 million over the two periods,” the economic survey said..