Paradigm Shift in IT-Services : what is the future of Technology as a Craeer ?
Will Indian Tech-Graduates manage the AI-Storm ?
India is known as the world’s Tech backbone. The $250-billion Indian software services industry caters to the biggest global companies of the world. The sheer breadth and depth of talent makes it the automatic destination for solving complex service industry problems.
However, recent advances in Generative AI are raising doubts about whether India will continue to have its edge given the inevitability of automation that AI will bring about.
The market size of generative AI in customer services sector was valued at $300 million in 2022 and is expected to cross $3000 million by 2032, growing at a CAGR of over 25% over this period.
Negative Side
Most of the organisations in India are looking at cutting their marketing and customer experience budgets.Most of the brands are seeking to drive efficiencies in these areas by deploying Gen AI.
In February 2024, CEO of AI chip making giant Nvidia, said that with the arrival of AI, the future of coding as a career is dead. In a January blog, Kristalina Georgieva, MD, IMF, wrote that AI will affect almost 40% of jobs around the world, replacing some and complementing others.
10 Lacs of the 70 Lacs Indian employees supporting routine-based testing and coding work could be eliminated in the next couple of years. ( As per Phil Fersht, CEO and chief analyst, HFS Research) . In India, market trends suggest that more than 1.6 Cr working employees will need reskilling and upskilling due to AI’s influence by 2027 ( as per TeamLease Digital, an HR services firm) .
Nvidia’s CEO words seemed even more ominous with the recent launch of Devin, the world’s first fully autonomous AI software engineer developed by US startup Cognition. The bot can practically be a collaborative co-worker. Devin reports on its progress in real time, accepts feedback and works together with you through design choices as needed. Devin now even has an Indian counterpart — Devika — an AI created by Mufeed VH of Lyminal and Stition.AI.
Tech roles are actually very, very susceptible to getting displaced by gen AI. Organisations are not going bold because there are considerations of ethics, data sanctity, etc. But from a first principles perspective, roles like software developer, code generator, optimisation, QA testing, integration testing, load testing, blockchain engineers, network administrator which make up about 60% of IT jobs — are very good candidates for getting automated and ‘cannibalised’ by AI .
The fact of the matter is that the growth of manpower will not be linked to the growth of revenue. We will soon be dealing with a very heterogeneous workforce, where there will be people and there will be lots of robots and AI.
Positive Side
Many industry leaders remain optimistic about the situation. They say it will only increase demand for new skills rather than reduce talent requirement.
While AI can improve productivity during production cycles, there will be a higher need for critical skills to address the stages of requirement gathering or even post-production use cases. We may assume that AI adoption will not reduce the number of people required. Skills in critical thinking, strategic planning and output validation for a superior user experience need to be included as part of the next generation of training models for employees.
Customers have no choice but to double down on investments in AI to transform their own business, thus you would see a very high demand for AI savvy skills.
Overall impact of AI will be a significant increase in spending on technology by customers — thus more demand for skills and more output from each person.
A word of caution for current employees of IT Industry - it’s time to reskill today as the day after tomorrow may be too late. 5 % of organisations globally are spending on reskilling workers on gen AI.
Advantage India
For 25 years, Indian IT services have profited from each of these technological shifts, as an IT support Enterprise of the world. It’s now time for India’s leaders to rethink how their firms operate and address gen AI.
One thing that’s not going to change is that India remains one of the largest pools of English speaking talent in the world, and we have very good coding skills. The near future is AI plus humans, and not AI alone.
International tailwinds may help India along as well. The AI executive order passed by US President Joe Biden, while regulatory in nature, is also upbeat and, crucially, acknowledges that the US cannot make progress in AI on its own. Indian talent being a ‘known entity’ will be an advantage.
New roles like AI trainer, AI ethics specialist, AI UX designer etc, are emerging, and India has been fast in adopting some of the AI-related skills.
CONCLUSION
The IT industry is at an inflection point with a larger shift underway from labour arbitrage to AI-driven tech arbitrage.
We are now going to move to the next S-curve of growth with AI driven decision making. So, new approaches like RPA (robotic process automation), low code/no code, process mining, machine learning, Gen AI-these things are now going to become centre stage. Productivity of workforce is going tobe up additional 50 -70% going forward.
The disruptive technology has also pushed people to innovate — for instance, the coming of LLMs has changed the nature of coding, bringing new disciplines like open source LLMs, training, finetuning, prompt engineering etc and this innovation will accelerate in the coming years.
India’s leaders must stop viewing gen AI as merely the next shiny tech tool, as opposed to what it really is: A truly disruptive technological evolution that will fundamentally change business models and radically change how we invest in technology solutions and services. All we need to do is look at the flourishing ecosystem of startups.
The winners in the game will be those who can quickly understand what needs to be done to fix and scale the data without charging the world, yet with the ability to work fast and smart. Cognizant, HCL, Infosys, TCS etc having long credibility and client Relations have a tremendous opportunity to convince enterprise leaders to take a risk with them to make the painful changes necessary to capitalise on genAI tech.