According to Nilkantha Mishra, a member of the Prime Minister's Economic Advisory Council, the Information Technology (IT) industry in India will face significant workforce transformation due to Artificial Intelligence (AI). However, Mishra believes that concerns about mass job losses are premature.
Transformation and Sector Growth
Mishra suggested viewing the sector holistically, integrating traditional IT companies with Global Capability Centers (GCCs). He noted that India's service exports grew by 15 percent in dollar terms in April and were growing faster than the country's Gross Domestic Product (GDP).
Speaking to the media at an event organized by the AI Council of India in Mumbai, Mishra explained that the organizational barrier itself may change under the influence of AI, as some work previously outsourced to external IT firms is increasingly being done within companies.
Workforce Requirements
He acknowledged that AI poses serious challenges for the sector, especially regarding employee reskilling. Companies will need fewer specialists focused solely on coding and more workers possessing skills in areas such as design, user interface, and user experience.
Mishra added that most layoffs are currently observed in software companies because labor is their largest expense, and software development is becoming increasingly automated. However, he argued that reduced software development costs could lead to an increase in the volume of software created, citing the 'Jevons Paradox,' which states that cost reduction stimulates consumption growth.
Strategic Steps for AI Leadership
During a conversation with Sharad Sangi, founder and CEO of Neysa, Mishra discussed the opportunities and limitations for turning India into an AI leader. He emphasized that to achieve global leadership, India must prioritize creating a meritocratic research ecosystem and increasing venture capital while developing internal capabilities across the entire AI value chain.
In Mishra's view, the main obstacles for India remain talent and capital, with capital being the more pressing issue. Furthermore, the country should encourage experienced professionals of Indian origin working abroad to return home to establish technology companies and foster the emergence of deep tech startups through universities and research institutions. Mishra concluded that for India to lead in AI, it is important not just to consume AI, but to create products for both India and the world, provided that the intellectual property is owned and controlled from India.