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Effect of Automation on the IT Industry

According to a report by NASSCOM, a jaw dropping 250 million jobs will be replaced by augmented technology by 2025; we are less than ten years away from this estimation to turn into reality.

The new world order living with machines and AI.

Indian philosophy speaks of Shiva, the force of destruction from which new worlds are born. Occidental philosophy speaks of ‘Schumpeters theory of Creative Destruction’ – Destruction is a necessary evil that gives rise to new and better worlds.

Automation, especially Artificial Intelligence is going to transform our lives and all industries. It is the next natural resource like electricity, air or water. 

The result is a brave new world and a destruction of an old world. According to a report by NASSCOM, a jaw dropping 250 million jobs will be replaced by augmented technology by 2025; we are less than ten years away from this estimation to turn into reality. What the report does not speak about is the improvement in our quality of lives and new jobs this will create.

Let us take a step back and see what happened 500 years ago. When machines were making inroads and replacing basic human activities such as drawing water, cooking, sewing, etc., had we protested the usage of machines, would we stand in the automated world we are today, leading comfortable lives? The impact on employment then and now is proportionate. It is true that machines have taken over the human jobs. However, the positive side, the automation is going to give rise to more variety of skillful jobs.

With the rise of machines, prices of products will lower and the labor wages will increase to generate more profits for companies and a better standard of living for humans. Doctors will be better able to treat patients, cars and driving will be safer without humans. This means that people get to buy more products for the same value. Studies also indicate that new technology and increasing employment go hand in hand, especially for IT firms. According to a survey by Ranstad Sourceright, automation and robots will have a positive impact on business growth in the coming years.

Automation does not replace Humans

In the initial stages of industrial revolution that happened few centuries ago, most people were relied heavily on agriculture sector for income. The introduction of machinery into agriculture has definitely decreased number of jobs in that sector. However, simultaneously, the same kind of machinery gave way to innumerous jobs that never existed. It is believed that more than 30 percent of jobs that are currently in place never existed in the last two to three decades. According to a study by Oxford, most companies do not replace people completely with machines or robots. The machines are made to do redundant and obsolete work, allowing humans to do more creative and innovative tasks.

A global resource shortage fuels opportunity

According to a thesis by MIT, the rise of machines has undoubtedly increased the standards of work labor. In times of revolution, there will be a rise of jobs in a different sector. However, the flipside to this, most workmen might not be equipped to meet up to the standards of these jobs. Therefore, there will always be shortage of resources for quality talent. For instance, an estimated shortage of 290,000 data scientists in the U.S. by 2018 predicted by a McKinsey study. This is where the government needs to step up and invest in niche trainings, to help labor make them well-suited for other jobs. This will help workmen to be more resilient to change and flow with the era of automation.

Most human jobs will be focused in the areas of AI, computing, data, and restructuring the entire infrastructure to accommodate futuristic machinery. The future that waits will be a harmonious blend of technology and talent working hand in hand.

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Aashish Kalra is the Chairman of Cambridge Technology Enterprises. He is a pioneering equity investor in Technology, Infrastructure, Real Estate, Energy, Logistics and Hospitality. Initially, at CTE LLC,Aashish Kalra was also one of the co-founders of Cambridge/Samsung Partners, one of the earliest independent venture capital firm in Boston in 1996 in partnership with Samsung of Korea with a vision to provide funding and assistance for seed and early stage IT companies. Being a co-founder of Cambridge Samsung Resources, a leading Systems Integrator, he also concluded successful partnerships and joint ventures with Hewlett-Packard, Marubeni, NEC and other global 1000 companies. CTE LLC has been associated as founders and investors of several successful technology companies. As the Chairman, he foresees the global operations of CTE, providing strategic vision and leadership to the company. He is responsible for the overall company growth and expansion. He has been consistently quoted in leading Indian and International media and was featured in the "Young Turks" program on CNBC. He is an international speaker and has participated in several industry events in America, Europe, India, China and the Middle East. In 2008, he was named one of the "Outstanding 50 Asian Americans in Business”. Aashish attended The Doon School at Dehradun in India. He also holds a Master's degree in International Finance from Brandeis University, Waltham, USA, and graduated from St. Stephens College, Delhi with a Bachelor's degree in Economics (Honors). He did his thesis on the Japanese Financial System at Sophia University, Tokyo, Japan.

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