https://www.thehindubusinessline.com/opinion/editorial/future-surprise/article71615344.ece
For over two years now, the financial world has placed its AI bets on US, South Korea and Taiwan in particular. This has hurt India by way of FPI (foreign portfolio investor) pullouts, causing markets to tank and the rupee to sink. In their commentaries, global analysts have insinuated that India’s growth and success are negatively correlated to the global pace of AI adoption. However, a recent report by the World Bank counters this pessimism. It offers contrarian data points on the prospects and jobs impact of AI on India.
It says that only 22 per cent of India’s workforce is directly exposed to AI, compared to 60 per cent plus for developed economies, as the bulk of the workforce is in agriculture, trade and other blue-collar work. Only 8 per cent of Indian jobs are directly substitutable by AI. The report also finds that AI-related hiring has been outpacing job losses so far. While the six largest IT firms culled 64,000 jobs post-Covid, GCCs (Global Capability Centres) and others added seven lakh new jobs. The report rates India as being uniquely positioned among developing economies to participate in all three layers of AI — adoption, adapting it to local use-cases and contributing to frontier models. The vast pool of technical talent, globally integrated IT services sector and digital public infrastructure can smoothen the path.
There are of course flip sides to these arguments. While a predominantly blue-collar workforce may be less exposed to AI, for India to graduate to a high-income economy it needs to migrate its workforce to higher value work. AI may now make this difficult by taking such jobs away. Though jobs that can be replaced by AI are few in number, they are held by high income earners who make a disproportionate contribution to household consumption and savings. AI adoption has also hurt entry-level hiring by IT firms which is critical for India’s demographic dividend. PLFS data showing unemployment among 15-29 year olds at 15.9 per cent tells its own story.
