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Published On: Sun, May 21st, 2017

Why automation is biggest stumbling block in India’s growth.

Smart machines, robots, and other forms of automation could either be an economic poison or cure in a developing country like India – and this change will affect how businesses worldwide outsource work.

Ravi is one of thousands of Indian IT workers who will lose their jobs this year, caught between a slump in India’s previously booming IT industry and new technology threatening to replace human workers.

Until last month he worked at Cognizant Technology Solutions – a firm headquartered in the US but with the bulk of its workforce in India. The company is under pressure to cut costs and is expected to shed between 6,000 and 10,000 ‘underperformers’ this year.

Market volatility and rising protectionism in countries like the USA, where much of India’s IT outsourcing work comes from, saw Cognizant’s revenue grow at its slowest pace in two decades last year, and its peers in the Indian IT industry are in the same boat.

But at the same time, rapidly improving automation technology is allowing software to carry out routine IT support work and repetitive back office tasks previously performed by humans – the very tasks global companies originally outsourced to India to take advantage of cheaper labour.

In February, Cognizant’s CFO said it would “aggressively” employ automation to “optimise” its services. Meanwhile, India’s third-largest IT firm, Infosys, said automation allowed it to shift 9,000 workers from low-skill jobs to more advanced projects, like machine learning and artificial intelligence, last year. Its competitor Wipro redeployed 3,200 in 2016, and predicts it will move another 4,500 this year.

International companies have long outsourced IT tasks to call centres in India to save money - but now those human centres may be replaced by robots (Credit: Alamy Stock Photo)

International companies have long outsourced IT tasks to call centres in India to save money – but now those human centres may be replaced by robots (Credit: Alamy Stock Photo)

Yet this has been accompanied by a significant slowing in hiring. IT body Nasscom’s annual review predicted a 20-to-25% reduction in jobs in the industry over the next three years.

“Cognizant has not conducted any layoffs,” a Cognizant spokesperson said. “New machines and technologies are about helping cut costs, improve efficiencies, and increase sophistication in building and delivering services. They are not about altogether replacing the human element, but about elevating the role people play and the value they bring to their roles.”

But it can be hard to pinpoint exactly whose jobs have been lost to automation. Researchers in the UK, for example, have shown that some roles in today’s global economy are more at risk than others.

Ravi, whose name has been changed, worked as a software tester – a role particularly vulnerable to automated takeover. “In testing, already it has been introduced and it’s coming in very fast,” he says. “If a job requires four manual testers, automation can reduce it to one.”

He’s now job hunting, but says opportunities for the kind of work he was doing before are limited and he will probably have to adapt: take a course on automated software testing and then try to secure a position. He worries this may be a repeating pattern.

“Maybe after five years some new technologies are coming and we have to learn those, too,” he says.

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