Indian think tank the Council for Research on International Economic Relations has found AI is not an immediate threat to the nation’s IT services sector.
The organization (ICRIER) this week published a case study titled “Al and Jobs This Time Is No Different” [PDF] that finds AI will hit the jobs market like any other wave of automation – with initial worries of massive job losses, but that over time “rising productivity will lower costs, drive a massive expansion in the consumption of AI-enabled products, and ultimately generate net positive employment opportunities.”
To reach that conclusion, ICRIER surveyed 651 IT firms and interviewed industry leaders.
The organization found that while hiring in the Indian IT sector has moderated (The Register has found it’s stalled at the big four outsourcers), the strongest demand from employers is for roles like software analysts and developers, or mathematicians, that are most exposed to AI.
The think tank believes that hiring trend suggests “AI is functioning primarily as a complement to high-skill technical work rather than as a substitute.”
A majority of firms ICRIER surveyed reported “significant productivity gains following AI adoption, reflected in higher and better-quality output, as well as time and cost savings.”
27 percent of the firms the think tank surveyed feel their headcount will shrink due to AI adoption, and 28 percent expect to hire more workers. 44 percent expect “no major change.”
But more than half of respondents expect to slow hiring for entry-level staff and the think tank has already observed a “general moderation” of early career hiring.
ICRIER is confident its survey is accurate, but thinks its projections for future hiring may be a little pessimistic.
“History suggests that many of the most impactful technology-driven jobs will be created by startups that have yet to be established – or are currently taking shape in classrooms and garages,” the study states. “While some incumbent firms are likely to survive and thrive in the AI age, it is new, AI-centric firms that are most likely to disrupt incumbents and generate a large share of future employment.”
The think thank therefore finds “good reason to be optimistic about India’s job prospects in the AI era.”
“As home to one of the world’s largest pools of AI-skilled workers, and with global demand for AI-enabled products set to expand rapidly, Indian workers are likely to see large and sustained increase in demand for their services in the medium to long-run.”
All of which suggests that “My job was outsourced to India and all I got was this t-shirt” jokes may remain more common than “My job was outsourced to AI” lamentations.
But ICRIER warns India’s government should not assume the nation’s tech sector will automatically come through the advent of AI.
“India’s IT firms are not hiring enough workers with skills in large language model operations, are not expanding their R&D divisions, and, most importantly, are not investing adequately in training and upskilling,” the study found. “The shortage of qualified AI trainers, the limited AI skills among new labour market entrants, and policy and regulatory uncertainty surrounding AI are challenges that must be urgently addressed if India’s IT sector is to fully harness the power and potential of generative AI.” ®
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