Up To 1.4 Million IT Services And BPO Jobs Will Likely Disappear Thanks To Artificial Intelligence

05/07/2016 3:44 PM IST | Updated 15/07/2016 8:27 AM IST
Fabrizio Bensch / Reuters
The humanoid robot AILA (artificial intelligence lightweight android) operates a switchboard during a demonstration by the German research centre for artificial intelligence at the CeBit computer fair in Hanover March, 5, 2013. The biggest fair of its kind open its doors to the public on March 5 and will run till March 9, 2013. REUTERS/Fabrizio Bensch (GERMANY - Tags: BUSINESS SCIENCE TECHNOLOGY)

Automation, artificial intelligence, or other forms of “digital labour” that can perform low to high skill jobs could eliminate up to 1.4 million jobs, or nine per cent of the global IT services and BPO workforce by 2021, according to a research report by HfS Research, an analyst firm.

This could have far-reaching implications for IT services sector in India, which is estimated to employ about 3.5 million people. Globally, the sector employs about 15 million people.

Low-skilled jobs, which involve simple, entry-level, process-driven tasks, could see a whopping 30 per cent drop in the next five to six years. In contrast, highly-skilled jobs, which require experience, abstract thinking and autonomy-based skills, will likely see the strongest growth, increasing by 56 per cent. While medium-skilled jobs will see an eight per cent increase.

“Sadly, greater productivity and effectiveness through ‘digital labour’ comes at a societal cost—jobs that were once required are no longer needed,” said the report’s authors. “However, we would point out that the jobs that are being phased out are no longer being recreated in any case, and much of this shrinkage will likely come from natural attrition as some people leave the service industry for more relevant jobs in other industries.”

Several IT services companies in India are already using artificial intelligence platforms in the delivery of their services. Wipro is said to be using “Holmes,” an artificial intelligence wizard to automate certain projects which could free up 3,000 engineers from "mundane" software maintenance jobs. Tata Consultancy Services Ltd (TCS) and Infosys Ltd have their own AI platforms, called Ignio and Mana respectively, in the works.

According to industry group, Nasscom, while it is unclear where the increasing robotics use by companies is headed, but in general, greater technology use means more opportunities in the long-term.

Sangeeta Gupta, senior vice president at Nasscom, told ET, "Nobody's really seen what automation and robotics will really lead to. There will be some impact of automation but overall we believe that technology adoption will actually lead to more job creation across sectors."

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