Why AI Tools Will Displace Many Information Technology Jobs In India
ChatGPT from Open.AI
March 28, 2023
The rising, widespread use of ChatGPT and other artificial intelligence (AI) tools is already enabling employers to cut staff, especially in the United States. AI tools could lead to the automation of a quarter of the work done in the US and the European Union, according to a research paper published today by Goldman Sachs. .
AI tools will displace an estimated 300 million full-time workers across the U.S., EU, Japan and other big economies, state Joseph Briggs and Devesh Kodnani, authors of the paper published by the New York based investment bank.
Over the short term, the automation AI brings will lead to a loss of jobs, including for middle class professionals, notes Carl Benedikt Frey, an economic historian at Oxford University, in his 2019 book The Technology Trap.
Many of the tasks done by a person in sales, service, or document handling, like payables, accounting, or insurance claim disputes, require decision-making but not the ability to learn continuously, notes Bill Gates in a blog post. Corporations have training programs for these activities and in most cases, they have a lot of examples of good and bad work. “Humans are trained using these data sets, and soon these data sets will also be used to train the AIs that will empower people to do this work more efficiently,” adds Gates, the co-founder of Microsoft.
ChatGPT is already being used for repetitive coding work, which is the major task required to write software. It is also being used to check coding work for errors. Such automation will be accelerated by new and advanced AI tools, along with more powerful and cheaper computing costs.
The automation of many coding tasks will hurt the revenues of Tata Consultancy Services, Infosys, Wipro and other Indian IT firms. This is because the bulk of their revenues come from mostly repetitive coding and related tasks outsourced to India by U.S. and EU companies. As a result, a sizeable share of the five million information technology employees in India are at risk of losing their jobs.
Overall, only about five percent of jobs in India are expected to be displaced by automation since most of the jobs involve manual labor. But the loss of IT and other office jobs will have a much bigger impact on the Indian economy. For instance, while the IT industry employs less than 1% of the labor force in India, it accounts for about 7% of the country’s gross domestic product.
Over the long term, Frey writes, the widespread use of AI will lead to major economic benefits. This is already evident in the medical field. Software from DeepMind, an AI company owned by Google for instance, diagnoses eye diseases as effectively as the top doctors. Another of Its software predicts the complex 3-D shape of proteins, which is transforming the invention of new drugs.
“The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone,” writes Gates in his blog post. “It will change the way people work, learn, travel, get health care, and communicate with each other. Entire industries will reorient around it. Businesses will distinguish themselves by how well they use it.”
The global race to attract the top AI talent and create new tools is largely between the U.S. and China, with both governments spending billions of dollars on the efforts. In addition, Google, Microsoft, Amazon, Facebook, IBM and other major American technology companies are investing billions of dollars to find ways to use AI to grow revenues and profits. Google, for instance, is using it to improve its search results, pricing of digital advertisements and personal assistant software and for speech recognition, automotive self-driving and other products.
Similarly in China, Alibaba, Tencent, Huawei and other giant technology companies are also spending billions of dollars on AI research and tools. In addition, both in China and the U.S., there are several large companies focused mainly on creating AI tools.
The most important link in the AI talent chain is top quality Ph.D.’s. More than 60 universities in China offer Masters’ and Ph.D. programs in AI. Each year they graduate over 1,200 students with advanced degrees. In contrast, it was only in 2020, that the Indian Institute of Technology (IIT), Hyderabad, became the first reputed college in India to offer under graduate and masters’ degrees in AI.
Most of the IITs as well as a few other institutions in India have reputed Ph.D. programs in mathematical algorithms, computer science and statistics, which are all related to AI skills. But currently the number of students in such programs are less than a hundred.
Given the talent and large capital investments required to create AI tools, can the major IT firms or emerging, new companies in India figure out how to benefit from the demand for technology, products and services arising from the coming AI boom?
So far, writes Frey, the “…despairing middle class has not resorted to physical force, but their frustration (over automation of work) has led to rising populism and the increasing fragmentation of society.”
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