(Sanghnomics is a weekly column that tracks down and demystifies the economic world view of Rashtriya Swayamsevak Sangh (RSS) and organisations inspired by its ideology.)
Prime Minister Narendra Modi made an interesting remark while speaking at a conclave as he pointed out that India has emerged as the largest source of affordable intellectual power. As the Artificial Intelligence (AI) and robotics are all set to replace many of the manual tasks performed by the labour, ‘affordable intellectual power’ could be the key to India beating China in the economic race to emerge as the global hub of various economic activities including manufacturing. So far China’s ‘cheap and abundant’ labour has provided it an edge but with the emergence of tech-driven economies across the globe, what is going to be most important in the next 10 years would be ‘affordable intellectual power’ and not the cheap labour.
PM Modi buttressed his argument by highlighting that over 1,700 Global Capability Centres are currently operating in India and employing more than 2 million highly skilled Indian professionals. During the last decade a new university has been established every week and two new colleges have opened every day. The number of medical colleges in our country has doubled in the last 10 years. The number of Indian institutions in the QS World University Rankings have tripled over this period, reflecting the high quality of India’s intellectual power. The Modi government has also come with the New Education Policy whose implantation is underway. It has laid emphasis on building India as a superior intellectual power where graduates have a high level of employability.
The proportion of the total workforce having received vocational training, formally or informally, has increased threefold from 2017 onwards, according to India Skill Report 2024.
According to a Mercer study titled India’s Graduate Skill Index:2023, at least 48 percent of Indian graduates have enough skills to be qualified for getting employed in AI and Machine Learning (ML) roles. This finding underscores the presence of a robust talent pool capable of meeting the increasing demand in the cutting-edge technology sector, says this report. Backend Development, Data Science, Data Analysis, and QA Automation roles also demonstrate notable employability rates of 39 percent, it adds.
The Mercer study indicates promising employability rates in non-tech roles, with Financial Analysts leading the way at 45 percent, followed closely by Human Resources Associates and Business Analysts at 44 percent and 45 percent, respectively. The report also highlights the growing significance of cognitive skills, particularly complex problem-solving and creative thinking, in the workplace.
AI and Big Data: Advantage India
The requirement for AI skilled personnel has zoomed globally. India holds a distinct advantage in this context. According to an evaluation done by the above-mentioned report, with a relative AI skill penetration three times the global average, India is positioned as a leader in the rapidly evolving field. India boasts a robust demand for AI skills, with a staggering 213,000 talent gap projected by 2022. India currently has 416,000 AI and data science professionals.
As per the World Economic Forum, a 22% shift in the job landscape by 2028 is anticipated, driven primarily by emerging AI roles. The financial landscape is set to witness a seismic shift due to this rapidly evolving inclusion of AI across regions. By 2025, AI is predicted to inject up to $500 billion into India’s GDP, a number set to catapult to $967 billion by 2035. The AI software segment is geared for an annual growth of 18% till 2025, fueled by India’s expanding investments, projected to hit $881 million this year.
India can do better than China
It appears that if India plays its cards well, it would be far ahead of China with the world already looking at safer options beyond China when it comes to doing business.
According to Future of Jobs Report 2023, “…. Global trends have led to businesses considering ways to enhance resilience in their supply chains, through “nearshoring”, “friendshoring” and other ways to distribute risk (e.g. China+1 strategy among multinational firms – whereby they maintain production bases in China while diversifying suppliers to other countries). This possible supply-chain restructuring is particularly relevant in East Asia, which could see benefits from diversification away from China.
India with its massive intellectual and skilled workers’ pool especially in the field of AI and Big Data, a thriving democracy and a pro-reform stable government emerges naturally as the most preferred choice for the global business. The advantages India offers are much more than China as the global labour market is undergoing a major restructuring in the post-Covid era with major thrust on AI and Big Data.
To harness the potential of India’s affordable intellectual power, Modi government had approved national-level IndiaAI mission with a budget outlay of Rs 10,371.92 crore in March 2024. It would not only help India become a global AI hub for the rest of the world but it would also ensure the tech sovereignty of India.
Earlier Sanghnomics columns can be read here.
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