Turning AI challenge into golden opportunity

Generative AI has the potential to create 100 million jobs over the next decade, providing India with the unique chance to replicate the success it had experienced with IT in the 1990s

Notwithstanding the many benefits that Generative Artificial Intelligence (AI) promises, it also casts a shadow of massive job losses. At risk are repetitive and low-end jobs. But every cloud has a silver lining and every challenge comes with an opportunity. So does this one. A large number of people would be required to create AI applications, and implement and manage them. Can India seize this challenge and transform it into an opportunity by becoming the global supplier of AI-related manpower? In the process, can it also become a global powerhouse of AI? 

Several studies have shown that the demand for AI-related manpower is growing rapidly. In a recent US-based study, McKinsey said that Generative AI will lead to an increase in demand for STEM jobs by 23 per cent by 2030. Sectors such as banking, insurance, pharmaceuticals, healthcare, and transportation will undergo major digital transformations, requiring AI-related skills. Concurrently, the growth of Generative AI-based startups is fuelling demand for AI professionals. There are already over 550 Generative AI startups with 14 unicorns, out of which 60 are in India, and the numbers are growing. According to another report, the share of AI professionals in mid- to large-size organisations is 4.1 per cent and increasing. One in eight of these organisations already has one-tenth of its workforce with AI professionals. The World Economic Forum assessed that AI may displace 75 million jobs worldwide but will create 133 million new ones. 

Corroborating the demand, job announcements for AI-trained personnel have shown a jump. According to a report by LinkedIn, the postings seeking AI professionals went up 190 per cent between 2015 and 2019. In 2020, there were over 1.5 million AI-related job postings. 

As the demand for AI-skilled manpower grows, the supply is not able to keep pace. Tencent Research estimated a shortage of more than 5 million AI professionals in China by 2025, while the European Union predicted a deficit of 7.5 million by the same time. Confirming this shortfall, Nasscom says that the demand for AI personnel outpaced the supply by nearly 33 per cent in 2021. It is this global shortage of AI-related talent that opens doors of possibilities for India.

With the median age of 28.5 and 26 per cent of its 1.4 billion population below 14 years of age, India is projected to provide nearly one-fourth of the global workforce across sectors for the next three decades. Besides, key hubs of AI-manpower demand, namely the US, Europe, China, and Japan have ageing populations. AI jobs are relatively high paying and India should aim to cater to as many as possible. 

India managed to become the world’s largest destination of IT/ITeS outsourcing because of the availability of large-scale human resource, and it’s time for India to repeat this success. Even if India can provide 10 per cent of the new jobs in AI, this would mean 13 million new jobs, $200-250 billion worth of contribution to gross domestic product in terms of wages alone, and nearly a trillion-dollar impact on the economy. If India actually caters to 25 per cent of the workforce, the possibilities are humongous. Just as IT outsourcing drove growth in the past, AI skilling has the potential to accelerate India’s growth narrative during Amrit Kaal and fast-track the journey to a $5 trillion economy.

Realising this vision would require scaling up the skilling effort. Training in AI is not merely about the projected 133 million new jobs, but also about reskilling 375 million existing workers worldwide who may need to transition to new occupational categories and learn new skills. There are several things that may need to be done. Market-based models should be promoted to involve all stakeholders. Presently, only about 20 per cent of the 6,000-plus engineering colleges in India are offering AI-related courses. This number needs to increase. The possibility of dedicated AI colleges can be considered. We need to democratise and proliferate AI skilling through STEM degree colleges beyond engineering colleges. To achieve these numbers, youth in all parts of the country should be encouraged and incentivised to undergo AI-related training, not just those from big metro cities. Industry must play an important role in this. 

FutureSkills Prime by Nasscom and the Ministry of Electronics and Information Technology is a good initiative, but the effort needs to be scaled up. Nasscom should provide leadership in creating standards for certified courses in consultation with industry and startups, so that Indian skilled manpower can cater to both domestic and global demand.  

A supply-driven strategy will also help in realising the Finance Minister’s vision of “Make AI in India and Make AI work for India”. This approach will help prepare a fertile resource pool to power various sectors of the economy, including agriculture, health, education, sustainable cities, finance, cyber security, and logistics.  The foundation for such work has been laid by the government with the passage of the Digital Personal Protection Bill, 2023, by Parliament earlier this month. With legal infrastructure in place, India can provide supply-based push to the AI market.

The fact that it will create 100 million new jobs over the next decade or less is not noticed amidst the hype AI attracts. Only a few other sectors have the potential to create such a significant number of jobs. While this opportunity may not be knocking on the door, if India can craft a strategy to train high quality AI-related human resources at scale, it will be ours. 

The writer is a distinguished visiting professor, IIT Kanpur, and a former defence secretary