V Anantha Nageswaran, CEA Warns Of The Impact Of Artificial Intelligence On Jobs

Skilling Progress: A Remarkable Journey

In recent years, significant strides have been made in the skilling sector. The proportion of people who pass the employability test has improved notably. Previously, only one-third (33.3%) of the test-takers passed, but now the success rate has risen to over one-half. This progress is commendable, yet there is still a substantial journey ahead. Currently, just under half of the test-takers are still not considered employable, according to a National test being administered.

Impact of Artificial Intelligence on Employment

A critical area of focus, as highlighted in the preface and detailed in the chapter on employment and labor, is the rising influence of artificial intelligence (AI). Despite its high energy intensity, AI's full impact on the global job market is still not entirely understood.

While jobs in the GCC sector may remain relatively unscathed in the near term, certain roles in business process outsourcing (BPO) that AI can quickly take over—such as medical transcript reading, image creation, and animation—are at risk. Thus, India faces a potential short-term negative impact due to AI integration, which may eventually transition into a medium-term positive effect.

Balancing Technology and Labor

For the Indian corporate sector, especially within information technology and non-IT fields, striking the right balance between technology deployment and labor utilization is crucial. Corporates must recognize that without labor employment, there is no income, and consequently, no demand growth. This imbalance can adversely affect both the top line and bottom line of businesses.

Therefore, it is essential to view the integration of technology and labor as a win-win situation. Companies must ensure that the deployment of technology does not undermine labor income while still maintaining a fair capital share. This medium-term challenge must be addressed with the corporates' self-interest in mind to sustain economic stability and growth.

Keywords

Skilling
Employability
Artificial Intelligence (AI)
Business Process Outsourcing (BPO)
Indian Corporate Sector
Technology Deployment
Labor Utilization
Economic Growth
Employment Impact

FAQ

What is the current pass rate for the employability test?

The current pass rate has improved from 33.3% to over one-half of the test-takers.

What roles are most at risk due to AI integration?

Roles in business process outsourcing such as medical transcript reading, image creation, and animation are most susceptible to AI integration.

What are the potential impacts of AI on employment in India?

India may experience a short-term negative impact followed by a medium-term positive impact due to AI integration.

Why is balancing technology and labor important for corporates?

Without labor employment, there is no demand growth, which negatively affects both the revenue (top line) and profits (bottom line) of companies.

What is the long-term challenge for the Indian corporate sector regarding AI?

The long-term challenge is finding the balance between deploying technology and maintaining labor income to ensure economic growth and stability.