Not just Donald Trump, automation is the real threat to IT jobs

Protectionism & automation make skilling India vital

Starkly in contrast to the assertion by India’s software industry lobby group Nasscom that the Indian information technology industry is a net hirer of 150,000 people each year, several reports suggest that companies are reassessing their business prospects and preparing to lay off employees at the entry and middle levels. Almost all leading IT companies have started talking about stricter performance evaluations this year and Infosys has deferred increments by three months. This goes together with — and is no doubt a consequence of — more moderate growth expectations. It may be easy and tempting, of course, to blame this on the new regime in the United States of America. The Donald Trump administration has made no secret of its desire to close what it sees as loopholes in the implementation of the H1B temporary work visa programme. And certainly, at least Infosys has announced plans to hire 10,000 more Americans, presumably partially as a response to this changed policy situation.

But that is not the whole story. Behind this lies the even greater threat of automation. Vishal Sikka, chief executive officer of Infosys, has been quite clear about the danger it presents to Indian IT companies’ business models. He has predicted that between half and three-fourths of the jobs being done by engineers might disappear within the decade, replaced by automated functions performed by artificial intelligence or AI. Seen that way, any planned layoffs by Indian IT right now might be just the start. And, in fact, there is no reason to suppose that it is Indian IT that is exclusively at risk. The threat from automation and from artificial intelligence to jobs extends across the spectrum. To these broad technological changes, add also the new climate of protectionism globally — of which the US actions against H1B-intensive companies are just one symptom. The world may be approaching the twilight of mass medium-skilled employment, as borders tighten up — and therefore markets become smaller — while technology advances. Blue-collar workers are more likely than ever to find a robot doing their job, and their employers will struggle to break into world markets. And now, even white-collar workers may not be exempt, as a large proportion of their more repetitive tasks could be performed by AI.

Given these trends, skilling, productivity, and employability become ever more important. The Indian government has put these vital human capital investment tasks on the back-burner for too long. While it is understandable to focus on trade and investment as a means of increasing employment, that may be fighting last century’s wars. It is necessary instead to attack the question of skill development and productivity enhancement on a war footing. Too many individual members of the generation that is supposed to represent India’s “demographic dividend” will be unable to find employment in the new age of automation and protectionism unless they are given the upgraded skill set that could enable them to do so. The jobs of the future will exist, but they will not be the same as the jobs of yesterday — and so India needs to prepare its workforce by providing it the training it needs. In the remaining years of its tenure, the government should have a laser-like focus on human capital, skilling, and productivity growth. The warnings from Indian IT must not be ignored.