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India Has The Most to Gain and Lose from Generative AI

Written by Will Poole
June 18, 2023

Let’s dispense with “worries” about Generative AI (GenAI). The genies are out of the bottles and procreating in the clouds. They will infiltrate every aspect of society, quickly, for both good and bad. India is in a pivotal position. Again. The last existential global tech crisis started a quarter century ago as companies prepared for Y2K. Over-hyped unknowns of Y2K led to “worries” about hospitals shutting down and worse. But that didn’t happen, in part because the enterprising founders of Infosys, Wipro, TCS, and other then-startups but now IT giants partnered with customers worldwide to fix critical systems. 2023/24 will be India’s second Y2K moment, but bigger, as GenAI will impact the very jobs the Y2K crises birthed as well as most other white-collar job in India, all at the same time.

India has more to gain and lose than any other country across the Global South (India, SE Asia, LatAm and Africa), particularly in the areas of IT and call center / BPM operations which employ about 5 million people, some 0.37 percent of India’s population. Call centers employ around 1.3 million Filipinos, about 1.2% of the population — more to lose of a smaller population. Globally, the best leaders of call centers are working 24×7 to embrace GenAI, retrain their agents to be escalation points, teach entry-level “prompt engineering”, and more. Notwithstanding aggressive adoption of GenAI and retraining, a material percentage of front-line call center agents will be out of a job within a few years, everywhere. As will low-skill software testing engineers and less-skilled developers. A farmer advisory startup replaced 30% of call center staff with ChatGPT. If it works for India’s farmers already, it will go far.

GenAI-driven job displacement is where policy needs to be developed – voluntary or regulated. Companies that employ soon-to-be-displaced workers have profited handsomely from the efforts of those workers. Their margins will improve as efficiency increases due to software-driven solutions. Before regulators impose it, CEOs could pledge to contribute a minimum of a year’s salary of each displaced worker to retain them. That’s a small price to pay to reduce the upheaval ahead.

There is no reason India should not continue to dominate the global IT services industry, and continue as an incubator and scaler of global-ready tech startups. When developer productivity goes up by 3x via GenAI, think about how much more efficiently software will be produced everywhere. Entry-level developers will benefit the most from GenAI which can help them both write and test code, increasing productivity and quality at the same time. If you manage developers, get them using GitHub CoPilot & ChatGPT quickly. If you manage in the BPM sector, get everyone trained on prompt engineering ASAP. And everyone must develop a data secturity policy so your data is not flowing to the GenAI clouds. That will in turn bring efficiency to all, from VC startups in Bangalore to the 3+ lakh employees of Infosys nationwide.

But what will all of these highly productive developers do? IBM’s recent statement that it needs 30% fewer employees is a wake-up call. The answer lies in the digital revolution which has been underway for decades and yet has scratched the surface of digitizing the products and services that touch the four billion-strong Global South population. There is no reason that Indian IT services giants and innovative startups can’t set their AI-optimized sights on this digital revolution. Lower costs will make it practical to digitize the economy and employ lower-skill workers in new areas. India’s IT sector is already highly attractive to domestic and global investors. It only gets better.

This article was originally published on the Economic Times >


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