How Artificial Intelligence Is Impacting Jobs In India
October 20, 2023
A B.A in Communicative English is the second most popular choice, after Economics, among social science students at colleges in India.
A good knowledge of English Is essential for white-collar jobs in India, including at most central and state government agencies. The students hope, that, upon graduation, they will at least get a job at a call center firm handling customer service, especially for American companies.
Call center employees in India handle customer questions about credit card charges, collect debt payments, tackle computer, laptop, internet, and phone service problems, and conduct customer surveys for banks, airlines, phone and other consumer companies, both American and Indian.
Unlike jobs at government agencies and at government-run banks, insurance and other companies, call center companies offer no job security and few, if any, healthcare, pension, and other benefits.
Also, the jobs are stressful, exhausting and offer few career advancement options. Due to this, the turnover among staff is more than 35%.
However, the chances of securing a job at a government agency or government-run company are tiny. Also, unemployment, including among graduates and post-graduates, keeps soaring. The call center jobs, especially for handling American customers, pay relatively better than most other white-collar jobs at private companies in India. Hence the interest among college students to learn Communicative English.
Call centers in India employ an estimated 1.4 million people, up from around 400,000 in 2010, with a fifth of the jobs in Bangalore and the rest in Delhi, Mumbai, Chennai, Hyderabad, and other cities. The large gain in jobs, over the past decade, is unlikely to continue since much of the gain was due to remote work, resulting from the COVID-19 lockdown since March 2020.
In fact, the demand for call center employees has peaked and will likely decline, perhaps sharply, due to the rising use of artificial intelligence (AI) tools.
In June, Suumit Shah, founder of Dukaan (store), an Indian e-commerce platform, laid off his 27 customer service agents. He replaced them with a ChatGPT-powered in-house customer service chatbot.
“It was [a] no-brainer,” he told the Washington Post, to replace his staff with the bot, “which is like 100 times smarter, who is instant, and who cost me like 100th of what I used to pay to the support team.”
ChatGPT is an AI tool from Open AI, which got $10 billion in funding from Microsoft in January this year. Users can find good quality answers to a variety of questions by querying the conversation bot. Its applications range from customer service communications and financial advice to education and psychological counseling.
According to several studies, AI, with tools like chatbots and virtual assistants, will automate most customer service jobs, including millions at call centers around the world.
In fact, over the next year, much of the capital investment by information technology and call center companies, especially in the U.S., will go “towards adopting or increasing automation,” according to a survey of 300 firms by 8x8, a cloud contact center and communications platform provider, based in Campbell, California.
While Shah bluntly said he used AI tools to replace staff, most companies, especially Western ones, are unlikely to say this, at least publicly, for fear of alienating staff, customers, and politicians. Instead, American companies state that AI bots are being used at call centers “to improve customer service capabilities” of their employees.
In his incisive book, “The Technology Trap: Capital, Labor, and Power in the Age of Automation,” Carl Benedikt Frey points out that, similar to the industrial revolution, automation will first lead to a decline in jobs in the short run, but will create far more jobs in the long run. Frey is an economic historian at Oxford University, United Kingdom.
Frey points out that the Industrial Revolution created unprecedented wealth and prosperity over the long run, but the immediate consequences of mechanization were devastating for most of the population. Middle-income jobs withered, wages stagnated, the labor share of income fell, profits surged, and economic inequality skyrocketed. These trends, Frey states, broadly mirror those in our current age of automation, which began with the Computer Revolution in the 1960’s.
Since 2000, automation systems have slowly phased out 1.7 million manufacturing jobs and white-collar jobs are now also at risk of being automated into obsolescence.
In addition to call center work, jobs most at risk of being automated away by AI include computer programmers, content writers, graphic designers, car and truck drivers and warehouse workers. Among the jobs that are less likely to be automated are those of teachers, nurses, plumbers, and electricians.
In order to ensure that Indians benefit from this shift in the job market caused by AI tools, colleges in India should sharply increase the number of seats for science, math and technical courses, by replacing most Communicative English courses, if necessary.
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