‘Future of Work’ in India’s IT/IT-es Sector

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Introduction

Scholarship on 'Industry 4.0' that has emerged globally has sought to address the challenges of technological forecasting as it relates to work in varied forms. For instance, the Frey-Osborne methods examine characteristic tasks of each occupation and suggest that almost half of all jobs in the United States and other advanced countries are at risk of being substituted by computers or algorithms within the next 10 to 20 years. [1] On the other hand, scholars such as Autor and Handel as well as research produced by OECD on this subject argue that occupations as a whole are unlikely to be automated as there is great variability in the tasks within each occupation. [2] Existing literature on the impact on jobs in the IT sector in India too have arrived at mixed conclusions. Reports have raised concerns about job loss in the sector as a result of automation [3] whilst it has also been reported that employment from the IT sector reached 3.86 million in 2016-17 and an addition of around 105,000 was witnessed in FY18 itself. [4]

In this context, it is crucial to start by developing an understanding of which technologies are at the forefront of bringing in Industry 4.0. Such an understanding will further help understand which jobs, and more specifically, job functions are at the greatest risk of being replaced by automation technologies. To further contextualise the impact, it is imperative to develop a comprehensive understanding of how job functions are organised within the sector itself. This becomes especially relevant with the emphasis Industry 4.0 places on the horizontal and vertical integration of the various technologies constituting Industry 4.0. [5]

It is anticipated that to stay ahead of the curve of ‘technological unemployment’ there will be significant skilling and re-skilling challenges to enable new talent addition around emerging job roles. [6] The skilling challenge gains enhanced importance in the broader context of nurturing an inclusive digital economy. [7] This is particularly relevant in the context of female labour force participation, since it has been predicted that job creation will be concentrated in sectors where females are underrepresented and difficult to retain, while sectors with higher female participation, such as secretarial work, will undergo job loss. [8]

However, it is not clear how these trends will play out in the future, particularly because other structural changes are taking place simultaneously (such as globalisation and protectionism, demographic change, policy making, technological adoption etc.).

Objective and Scope

This research seeks to contribute to existing studies and dialogue on the impact and effect of industry 4.0 on work in the Information Technology services (IT) sector in India. Though the research focuses on the impact of technologies that comprise Industry 4.0, such technologies are frequently interchanged with the words ‘automation’ and ‘digitisation’. Thus, the desk research also examines the impact of ‘automation’ and ‘digitisation’ on the IT sector in India. The case study looks atthe IT sector broadly and where applicable, calls out information specific to sub-sectors such as IT enabled services (IT-eS) or Business Process Management (IT-BPM). The IT sector in India is uniquely placed; it is producing the technologies that are disrupting work in other industries as well as implementing them internally. This report focuses on the latter, but brings into context the former when relevant to work in the sector.

By drawing out trends and providing an analysis of contextual, quantitative and qualitative data on changes to work and labour markets in India as a result of technological uptake, it is anticipated that comparative research can be enabled by creating a framework that can be replicated in other, particularly developing, contexts.

References

[1] Carl Benedikt Frey and Michael A. Osborne, 2013. The future of employment: How susceptible are jobs to computerisation?, Oxford Martin School, September.

[2] See David H. Autor & Michael J. Handel, 2013. “Putting Tasks to the Test: Human Capital, Job Tasks, and Wages,” Journal of Labor Economics, University of Chicago Press, Vol. 31(S1), pages S59 -S96. See also: Future of Work and Skills, The Organisation for Economic Co-operation and Development, February 2017.

[3] Business Today, AI, automation will cost 7 lakh IT jobs by 2022, says report. (November 7, 2017) Retrieved https://www.businesstoday.in/sectors/it/ai-and-automation-to-cost-7-lakh-it-jobs-by-2022-says-report/story/259880.html

[4] Advantage India, India Brand Equity Foundation. Retrieved https://www.ibef.org/download/IT-ITeS-Report-Apr-2018.pdf

[5] Embracing Industry 4.0 -and Rediscovering Growth, Boston Consulting Group. Retrieved https://www.bcg.com/capabilities/operations/embracing-industry-4.0-rediscovering-growth.aspx

[6] India’s Readiness for Industry 4.0 -A Focus on Automotive Sector, Grant Thorton and Confederation of Indian Industry. Retrieved http://www.nasscom.in/sites/default/files/NASSCOM_Annual_Guidance_Final_22062017.pdf

[7] G20 Insights, Bridging the digital divide: Skills for the new age., Retrieved http://www.g20-insights.org/policy_briefs/bridging-digital-divide-skills-new-age/

[8] World Economic Forum, The Future of Jobs -Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution, (January 2016).