India’s Search for Purpose in the Future of Work in Age of AI automation.

In 21 Lessons for the 21st Century, Yuval Noah Harari highlights a reality we’ve relied on for decades: cheap labor has been the bridge that helped developing nations slowly cross the global economic divide. Even if a country moved at a snail’s pace, this strategy allowed it to inch forward. But what happens when automation begins to crumble this bridge?

Countries that have successfully transitioned from cheap labor to high-skilled industries might survive the storm. But for nations like India, where millions still depend on low-cost labor jobs, the threat of automation looms large. And it’s not a distant problem—it’s here. Yet, we’re oddly complacent, as if some jobs will always be “safe” from machines.

Globally, automation is expected to impact up to 800 million jobs by 2030 (McKinsey Global Institute). In India, it’s not just factory workers at risk. The IT services sector, which transformed cities like Bengaluru, Hyderabad, and Pune into tech hubs, faces a unique challenge.

What About India’s IT Services Sector?

Industrial automation in India’s MSMEs (Micro, Small, and Medium Enterprises)—the backbone of our economy—remains in its early stages. Limited access to capital, outdated processes, and razor-thin margins make automation a slow process here. While this means MSMEs might be less affected for now, they risk falling behind in global competitiveness if they don’t adapt soon.

On the other hand, India’s IT services sector, a shining symbol of our economic progress, is among the most vulnerable to disruption. Consider this:

1. Dependency on Repetitive Tasks:
   Many IT jobs involve repetitive tasks—software testing, system monitoring, backend operations. AI tools like GitHub Copilot and OpenAI Codex are already replacing these roles by generating code, debugging, and performing tasks that once required human effort.

2. McKinsey Global Institute estimates that up to 800 million jobs globally could be displaced by automation by 2030, with 46% of current jobs in India

3. Shrinking Client Dependence:
   India’s IT giants like Infosys, TCS, and Wipro have historically depended on contracts from US and European clients, who are now adopting automation at scale. As clients cut costs and automate, they need fewer outsourced workers.

4. A 2023 study by NASSCOM revealed that while IT companies are hiring in AI and data science, the demand for mid-level roles in software testing and system maintenance has dropped by over 30% in the last five years.

5. Ray Kurzweil’s Prediction:
   By the 2030s, AI will outperform humans in almost every economically relevant task. Mid-level IT roles—those that require experience but not innovation—are the most at risk. These jobs, crucial for cities like Bengaluru, might disappear faster than we expect.

What Does This Mean for Bengaluru, Hyderabad, and Pune?

These cities thrive on the wealth generated by IT services. If automation disrupts the sector:

• Rising Inequality: AI specialists and innovators will thrive, but many mid-level and entry-level workers might struggle to stay relevant.

• Lifestyle and Real Estate Impact: Entire ecosystems, including real estate, retail, and hospitality, depend on the disposable income of IT workers. Disruption here could ripple across the economy.

• Is upskilling the Only Way? : Reskilling the workforce is not a luxury—it’s a necessity atleast in short term. Fields like AI, data science, cybersecurity, and green technology must become the new focus.

Manufacturing: The Key to Stability

Unlike IT, manufacturing offers something more sustainable: a foundation for long-term, stable growth. Countries like China and Vietnam have leveraged their manufacturing sectors to create robust economies, and we’ve failed to match their pace. Despite having the world's second-largest population, India contributes just 17% to global manufacturing GDP, compared to China’s 28%.

South Korea has achieved a balance by automating repetitive tasks while reskilling workers for higher-value jobs.

India could follow suit, using automation to enhance efficiency in sectors like textiles, automotive, and electronics.

Where did we go wrong?

1. Ease of Doing Business: While India has improved its rankings, bureaucratic hurdles still discourage small and medium manufacturers.

2. Infrastructure Gaps: Poor logistics, unreliable electricity, and slow transportation inflate production costs.

3. Focus on Services: For decades, policymakers bet heavily on IT and services, while manufacturing took a backseat.

However, there’s still hope. The Production Linked Incentive (PLI) scheme has the potential to change the game, offering subsidies for manufacturers in key sectors like electronics and renewable energy. If executed effectively, this could increase India’s manufacturing GDP by $500 billion by 2030.

So, What’s the Real Solution in IT Sector for next 10 years?

India can’t rely on cheap labor or repetitive IT jobs forever. Automation is rewriting the rules. But we still have a chance to turn this challenge into an opportunity:

1. Shift from Services to Products: Indian IT companies need to move beyond outsourcing. Building software products, intellectual property, and SaaS platforms can offer resilience.

2. Reskill, Reskill, Reskill: The government and companies must invest heavily in upskilling programs for emerging fields like electronics manufacturing, green tech. I see there’s lot of effort is going on increasing the AI capability but will not need so many AI engineers once we achieve AGI by 2030 or even before that. We need to stop going gaga about AI upskilling.

3. Support MSMEs in Automation: Provide affordable loans, technology grants, and training programs to help MSMEs automate and compete globally. Follow China.

4. Build Purposeful Communities: As Harari and the Israeli example highlight, material wealth alone doesn’t bring happiness. We must foster stronger social and cultural connections which will prepare us for uncertain socio-political changes is looming around us.

Universal Basic Income (UBI) and Universal Support Services (USS): Are They the Solution?

Countries worldwide are experimenting with UBI and USS to prepare for a world where machines take over more jobs.

• Finland’s UBI Trial (2017-2018): 2,000 unemployed citizens were given €560 monthly, no strings attached. The results? People reported improved mental health and reduced stress, but employment levels didn’t increase.

• Ontario’s UBI Pilot (Canada): Participants experienced better education outcomes and reduced financial stress, but the program was canceled early.

In India, where inequality is already a deep wound, UBI( universal basic income ) or USS( Universal Services support) could help bridge the gap between the shrinking middle class and growing unemployed. But here’s the catch: providing basic needs like healthcare, housing, and education won’t address the emotional gap caused by unemployment and inequality.

Take the example of ultra-Orthodox Jews in Israel. Around 50% of men in this community never work. Instead, they dedicate their lives to studying religious texts. The government subsidizes their lifestyle. Despite limited financial resources, many report higher satisfaction due to strong community bonds and a shared purpose. Many AI futurist like Ray Kurzweil and Yuval Nova Harari are claiming that this is going to be future of 'POST WORK' world

A Final Thought

India has one of the youngest and most dynamic workforces in the world. But as Ray Kurzweil reminds us, the future belongs to those who adapt.

The question isn’t if automation will disrupt us; it’s how we’ll prepare for it.

The question isn’t just whether we can save jobs—it’s whether we can create a society where everyone, regardless of their role, finds dignity and purpose. And that’s a bridge we all need to build together.