If you think about it, the outsourcing/offshoring business that Indian IT/ITES capitalized on was nothing short of a Gold Rush for Indian IT professionals.
First, the macro-picture:
The last two decades created the perfect conditions for the IT workforce to flourish: the global demand for IT professionals, the availability of a young and English-speaking talent pool, the churning out of IT and CS professionals by the academia, an interesting demographic dividend, the low cost of the Indian workforce, the Indian Government creating software export zones, the rise of the Indian entrepreneur, the pull of western shores for Indian migrants, and the dollar that even now seems invincible.
As a driver of GDP growth, as a major portion of Indian exports, and as an employment destination for millions of Indians, Information Technology Services have become the “Sar Taj” of Indian talent that even put the country on the global map.
It was a fascinating period that India made the most out of; but for a plethora of reasons of which only some are clear, that gold rush may or may not repeat itself. The global business outlook, the prolonged wars, and the arrival of a new kid on the block called ‘Artificial Intelligence’ amongst other things have suddenly seem to put Indian IT/ITES in the eye of a storm. The very things that were once so wonderful about Globalization have come a full circle; we are no longer “protected” from the vagaries of the wild winds of global economic, political, social, and technological origin. In fact, the grapevine has it that India must now turn inward and eschew its dollar dreams once and for all.
The thing about Artificial Intelligence is that it has been a constant technological trope for most part of the last decade. However, with the launch of chatGPT, we have, it seems, reached a kind of an inflection point in the technology story that the world has witness so far. Yes, it is the black swan of the day.
With the availability of Artificial Intelligence and Machine Learning skills, an IT company can delegate mundane and repetitive tasks to AI bots while leaving the more critical and intellectually demanding tasks to the human talent they deploy. So, what incentive do they have in outsourcing or offshoring work to another country like India? Unless we can create those perfect conditions all over again in India, it’s an uphill task for IT India. And churning out this talent pool by tying up with academia will need at least 3-4 years from now.
In other words, it is a time for technology firms to pause, reflect, and take action. With AI upon us, this is just the beginning of some interesting times. They could upend their business models to be more flexible, commission market research to do a need gap analysis across interesting verticals and dive into product development, spin off their businesses and sell them off if they think it is too much of a headache, rebuild their appetite for new ambition, invest their profits in upskilling/reskilling their workforce, make a radical overhaul of their businesses, take the cultural inertia bull by the horns, or just wait it out until the dust settles.
Let’s get very clear about one thing. We have churned out IT engineers most of who are unemployable. We have thrived on cost arbitrage rather than innovation. We have ignored our arts and cultural studies – we have nearly bid goodbye to humanities believing that an IT job is a dream destination as the whole world looks favourably upon it. And now that technology has raised the bar, we are groping in the dark. We are looking for quick fixes, we are “training” existing employees in run-of-the-mill AI practices, and we are hanging on to the cost arbitrage with our dear lives. We have probably grown fat and complacent believing that the gold rush would last forever.
Very naive, and honestly, very lazy.
According to an HBR article, “the average half-life of skills is now less than five years, and in some tech fields, it’s as low as two and a half years.” I believe this should inform the paradigm shift in the IT workforce skills, meaning, the country that keeps up with the technology survives, and the one that won’t will just implode. There’s also a strange kind of paralysis that has set in the leadership of mid-sized Indian IT companies; in all likelihood, they are trying to come up with a five-year plan; in all likelihood, they are over-optimizing their costs; in all likelihood, a sunk-cost-fallacy is prevailing over them.
Now, let us take a hard look at how the micro-picture has unraveled.
What are the IT skills that are required in an AI-kissed world?
Interestingly, this time around, we need more cognitively demanding skills like prompt engineering, critical thinking, creative problem-solving, systems thinking, collaboration and communication, deeper data sciences, cybersecurity knowledge, etc. While these are the skills we need at a broad level, these need to be inculcated in letter and spirit in our present-day education curricula. We need think-tanks to brainstorm which courses should be introduced Godspeed, and which ones need to be made redundant, lest they continue to create false hopes for the aspiring students.
What can be outsourced, if at all?
While the pricing will be a function of the demand and supply, we can continue the outsourcing story only if we churn out talent with cost arbitrage. But this time, there’s a new trait that would be in demand – innovation. Paper after paper has been presented to highlight the need for innovation. Some have even claimed that their workforce is innovative on paper. But innovation comes from the Dexter laboratory of curious, determined, intelligent, and creative thinking. It is hard to create, hard to measure, and even hard to transfer across continents. If outsourcing is the end-all solution for the Indian IT success story, this needs to be thought out at a deeper level.
What can be churned out by academia in the shortest time possible?
This is a tricky one. It is possible that the Government initiates academic initiatives that promise to continue the success saga India has with IT. But there is many a slip between the cup and the lip. Our gradflation churns out talented IT professionals at rocket speed, but it will be a waste of time, potential, and faith if the talent is not measured accurately. We should be creating a wider academia-industry-government nexus and start taking the teaching profession seriously. They are the people that shape the future workforce, after all.
What skills offer top dollar?
If I am not wrong, prompt engineering, systems thinking, creative problem-solving, and collaboration are key to building and selling, so they could be in the reckoning for the foreseeable future.
And most importantly, where do we start?
There’s only one way to go. We could start by marking out a portion of profits for investing in developing cognitively demanding skills in the existing workforce, blend them with probably a few costly external resources, and create stimulating work environments to enhance knowledge-sharing like workshops and jumpstart programs. We can create prototype centers, pilot experiments, and scale them when they are successful. This is a heuristic approach at large, and risk-averse entrepreneurs may shy away from it. But those who have dollar dreams have to brace themselves for the inevitable.
I hope this article provokes interesting thoughts, and look forward to hearing them. I am a hyper-realist by nature, so I may not have said something that is very optimistic or something that rings bullish in your ears.
But I think a reality-check is just what India IT Inc. needs right now.
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