Labor Arbitrage RIP (indiadispatch.com)
(Friday March 28, 2025 @12:30AM (msmash)
from the closer-look dept.)
- Reference: 0176843973
- News link: https://it.slashdot.org/story/25/03/28/0421236/labor-arbitrage-rip
- Source link: https://indiadispatch.com/p/the-500-million-worker-problem
An anonymous reader [1]shares a report :
> For decades, India's economic promise has rested on its demographic dividend -- the competitive edge of a massive, young, and increasingly educated workforce. Economists and policymakers have routinely cited the country's population profile as its ticket to economic superpower status, with projections of reaching $10 trillion in GDP and achieving high-income status by 2047. These forecasts depend heavily on a critical assumption: that roughly 500 million Indians currently aged 5-24 will find productive employment as they enter the workforce over the next two decades. But a sobering new analysis from Bernstein suggests this fundamental premise [2]may be crumbling under the weight of rapid advances in AI .
>
> "The advent of AI threatens to erode all the advantages of India's rich demographic dividend," write Bernstein analysts Venugopal Garre and Nikhil Arela, who characterize their assessment as a potential "doomsday scenario" for a nation that has hitched its economic wagon to services-led growth. At stake is India's $350 billion services export sector -- a sprawling ecosystem of IT outsourcing, business process management, and offshore knowledge centers that employs over 10 million workers, mostly in jobs that place them in the top 25% of the country's income distribution.
>
> While India's IT giants have successfully navigated previous technological shifts -- from basic call centers in the late 1980s to cloud computing and data analytics more recently -- AI poses a fundamentally different challenge. Unlike earlier transitions that required human adaptation, today's AI systems threaten to replace rather than complement the workforce. "AI subscriptions that come at a fraction of the costs of India's entry level engineers can be deployed to perform tasks at higher precision and speed," the report note.
[1] https://indiadispatch.com/p/the-500-million-worker-problem
[2] https://indiadispatch.com/p/the-500-million-worker-problem
> For decades, India's economic promise has rested on its demographic dividend -- the competitive edge of a massive, young, and increasingly educated workforce. Economists and policymakers have routinely cited the country's population profile as its ticket to economic superpower status, with projections of reaching $10 trillion in GDP and achieving high-income status by 2047. These forecasts depend heavily on a critical assumption: that roughly 500 million Indians currently aged 5-24 will find productive employment as they enter the workforce over the next two decades. But a sobering new analysis from Bernstein suggests this fundamental premise [2]may be crumbling under the weight of rapid advances in AI .
>
> "The advent of AI threatens to erode all the advantages of India's rich demographic dividend," write Bernstein analysts Venugopal Garre and Nikhil Arela, who characterize their assessment as a potential "doomsday scenario" for a nation that has hitched its economic wagon to services-led growth. At stake is India's $350 billion services export sector -- a sprawling ecosystem of IT outsourcing, business process management, and offshore knowledge centers that employs over 10 million workers, mostly in jobs that place them in the top 25% of the country's income distribution.
>
> While India's IT giants have successfully navigated previous technological shifts -- from basic call centers in the late 1980s to cloud computing and data analytics more recently -- AI poses a fundamentally different challenge. Unlike earlier transitions that required human adaptation, today's AI systems threaten to replace rather than complement the workforce. "AI subscriptions that come at a fraction of the costs of India's entry level engineers can be deployed to perform tasks at higher precision and speed," the report note.
[1] https://indiadispatch.com/p/the-500-million-worker-problem
[2] https://indiadispatch.com/p/the-500-million-worker-problem