India produces a substantial pool of technology talent, with approximately 900,000 computing graduates entering the workforce annually. This workforce comprises about 500,000 computer science engineering graduates alongside roughly 400,000 BCA and BSc computer science graduates. The education system was geared to support the IT services industry, which has been booming year after year for nearly 25 years and could take advantage of this talent pool. However, in recent times, several businesses around the world are reimagining their business models and are optimising their technology budgets as a result of automation and AI interventions.
With generative AI tools becoming more and more advanced and developing the capability to handle coding, testing and documentation, the large number of resources deployed to work on these tasks are becoming dispensable. There has been a gradual change in the hiring pattern focussed on experienced candidates who are capable of handling complex tasks. Even when the going was good, employers often highlighted the skill gaps of the graduating students and the efforts industry had to put into readying them for their first jobs.
Disruption of Entry-Level Roles
While it is true that traditional entry-level jobs in coding, testing and systems design may be disappearing in the global context, the demand for those with AI skills is on the rise. According to a Nasscom report, the Indian AI talent demand is expected to grow from 800,000-850,000 to over 1,250,000 over 2024-26, a CAGR of 25%, while existing talent is only growing at 15%. A NITI Aayog has also pointed out the critical supply-demand gap for AI talent. Whereas the supply for AI talent is 50% of the current demand in India, it is expected to further lag in the next few years.
Academic institutions need to redesign the curriculum on a war footing. Students should be encouraged to take up internships and projects from the first year onwards so that they are able to relate to the transition phases and the emerging business scenario. With the educational institutions in Tier 2 and Tier 3 towns creating a significant pool of computer science graduates, they could be deployed with the domestic industries like agriculture, infrastructure development, manufacturing, financial services and retail.
New opportunities that are emerging are related to AI workflow design, integration and prompt engineering. On account of organisations adopting AI in their business processes, they are also seeking talent trained in AI with practical orientation and those who are capable of learning emerging technologies and tools and implementing these on the run. There are also opportunities for AI-enabled self employment on account of GenAI tools that would enable them to build products, apps and services with minimal capital.
Architecting the AI Economy
India’s digital economy is poised to touch $1 trillion by 2030. This would mean there would be a demand for software developers, AI specialists, digital product specialists and cybersecurity professionals. The 1,600+ global capability centres of multinationals hosted in India are recruiting in significant numbers and are expected to grow to 2.5 million employees with most recruitment in demand being AI, cloud and analytics specialists.
While there are concerns about the traditional hiring patterns and job opportunities may be changing, the country has abundant talent that has the potential to shape the AI economy of the nation and the world at large. However this potential could be harnessed only with skills upgrade, students finding internship opportunities to have the practical know-how and by reimagining academic programmes.