DailyBrief: Are Indians losing jobs because of AI? And, key takeaways from the Vibrant Gujarat Summit

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Market Watch

• Indian benchmark indices ended the day with marginal gains, with the Sensex closing 271.50 points higher at 71,657.71 and the Nifty closing 73.90 points higher at 21,618.70.
• Sectorally, Healthcare, Information Technology and Metal were among the big gainers, while Oil & Gas index made marginal losses.

Are Indians losing jobs because of AI?

Well, yes, but not at the scale one would imagine. Cherry-picked data will paint a grim picture, but overall, the impact of AI has not translated fully into a decline in the Indian job scene. Yet.

Cherry-picked data: Paytm has laid off 1,000 employees, attributing the job cuts to “AI-powered automation” aimed at reducing employee costs by 10-15%.

• IT hiring is experiencing a slowdown, with a 90% drop in active job postings by major tech companies in India compared to the previous year and a reduction of 37,299 employees by the top four Indian IT companies over the past two quarters.
• Facebook (Meta Platforms), Amazon, Apple, Microsoft, Netflix and Google (Alphabet) — registered a 90% drop in active job postings in India so far in 2023 compared with last year.

De-cluttering the data: The reduction in hiring in the IT sector is actually attributed to the overall slowdown in the sector toward the end of last year. This applies to the point about Meta, Amazon, Apple, etc., as well.

• This is not to say that AI has had no effect on hiring in India. It is important to note that these jobs are interchangeable, which means a job lost to AI would translate to another being created for AI-based skills.

So the only data point that matters is that 16 million workers in India will need reskilling by 2027.

• This would be true irrespective of AI. Reskilling and upskilling are an integral part of career growth, the lack of which would lead to a highly stagnated services sector.
• Moreover, worthless degrees from run-of-the-mill colleges are creating an entire “unemployable” generation in the country - all the more reason to focus on reskilling.

Yes, but: A look at data from other parts of the world paints a picture of what is to come.

• According to the Financial Times, high-wage workers are deemed more at risk of being replaced by generative AI, with six-figure salary jobs being three times more exposed compared to $30,000 jobs.
• A recent McKinsey report highlighted that these AI models now have the highest potential to replace knowledge work, particularly activities involving decision-making and collaboration, which previously had the lowest potential for automation.
• A?Harvard Business School study examining GPT-4's impact on Boston Consulting Group employees found that AI-assisted consultants carried out tasks 25% faster and completed 12% more tasks overall, and their work was assessed to be 40% higher in quality than their unassisted peers.
• A U.S. study showed a significant job and earnings decline for copywriters and graphic designers on freelancing platforms shortly after ChatGPT's launch. This indicates AI's role in taking over and potentially devaluing their work.

• The study found that freelancers with higher earnings and job completion rates were as vulnerable, if not more, to employment and earnings decline.

The bottom line: Unidimensional job roles are at high risk of being automated, but the more multi-faceted the role, the lower the risk of automation. Hence, reskilling and upskilling would be essential to offset the job loss trend.

‘Take’ du jour

The Global Times’ laughable take on the India-Maldives row. They said Maldivian President Mohamed Muizzu is not pursuing an “India-out” policy nor leaning toward China but is putting his country's interests first. Sure. ?? Notice how his t-shirt doesn't say “Maldivian interests first”. ??

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The key takeaways from Day 1 of the Vibrant Gujarat Summit

The Vibrant Gujarat Global Summit 2024, running until January 12, has kicked off with the theme “Gateway to Future.” During his address at the summit, PM Narendra Modi said that all major agencies have estimated that India will be in the top three economies of the world in the coming years.

Adani: The Adani Group has unveiled plans for a substantial investment of over Rs 2 trillion ($24 billion) in Gujarat.

• The investment is primarily directed towards establishing a green energy park in Kutch to create approximately 100,000 jobs.?The group has already invested Rs 50,000 crore and surpassed the target of creating 25,000 jobs.

Ambani: Reliance is establishing India's first carbon fibre facility in Hazira, contributing to the circular economy in Gujarat. Reliance will also invest in Gujarat to support India's bid for the Olympics 2036.

• “No power on earth can stop India from becoming a 35 trillion-dollar economy by 2047,” Ambani said.

Nvidia: Nvidia has announced a collaboration with Yotta Infrastructure to establish an AI data centre in Gujarat International Finance Tec-City (GIFT City).

• The focus on digital technology initiatives by collaborating with universities across India, particularly emphasizing the development of artificial intelligence.

Other highlights: DP World will continue to support Gujarat's economy by building a state-of-the-art container terminal at Kandla Port with a capacity of 2 million containers.?DP World has signed a strategic MoU with Gujarat on the sideline of the summit.

• Dutch and Singaporean firms announced investments worth over $7 billion in India in the upcoming financial year.
• ArcelorMittal chairman Lakshmi Mittal announced that his firm will build the world's biggest steel manufacturing factory at Hazira in Gujarat by 2029, having a capacity of 24 million tonnes per annum.
• Suzuki Motor Corporation President Toshihiro Suzuki said at the summit that the global auto company will invest ?35,000 crore to set up its second manufacturing facility in Gujarat. The company is looking to ramp up its annual production capacity to over 40 lakh units by 2030-31 and roll out the first EVs from the plant by the end of the year.

ICYMI

• Rahul Narvekar, the Maharashtra Speaker, upheld the validity of the Shiv Sena constitution of 1999 and rejected the plea put forth by the Uddhav faction to consider the 2018 constitution as valid.
• The Congress party will skip the Ram Temple ceremony, calling it a BJP/RSS event.
• Mark Zuckerberg wants to create the world's best beef by feeding cows dry fruits and beer
• LinkedIn is turning out to be more of a dating site than a job portal.
• South Korea is launching a special “Hallyu” visa aimed at attracting K-pop fans.
• Ecuador briefly descended into chaos with violent attacks and prison riots following the escape of notorious gang leaders.
• Maldives President Mohamed Muizzu has requested China to send more tourists following a decline in Indian bookings.