AI growth pushes India’s tech industry to rethink its back office role

In short: India’s tech industry is adapting to AI, but the Financial Times reports that outsourced data work alone may not be enough for long term growth.

What's going on

India’s tech sector grew for decades by doing outsourced work for global companies, like software support, accounting systems, and other routine business tasks. This work brought in a large share of India’s export income, estimated in the report at about $330bn to $340bn.

The Financial Times says AI is now putting pressure on that model. AI tools can automate some well defined tasks, which could mean companies need fewer people for the same work. Several voices in the report warn that parts of India’s large IT services industry face a higher risk of jobs being replaced, not just changed.

At the same time, new kinds of work are growing in India, especially “data annotation” (labeling information so a computer can learn, like tagging pictures as “car” or “truck”). The report describes workers in a textile factory in Karur, Tamil Nadu, wearing cameras for hours at a time to record everyday actions. This type of video can help train robots, like teaching by example, the way you might show someone a task instead of explaining it.

What to watch

The big question raised by the FT is whether India can move beyond being the place where other countries’ AI systems get trained and tested. Watch for more investment in building India-based AI products, research, and hardware, and for clearer rules and worker protections for people doing data and robot training work.

Source: Financial Times