His argument was more subtle.

He said the IT industry, including Zoho, has not created many jobs in recent years. According to him, money that could have gone into hiring more employees is increasingly being directed toward artificial intelligence infrastructure, data centres, servers, and memory capacity.

His larger concern was about India's youth.

A country with a large young workforce needs a steady supply of new jobs. The question is whether the technology industry that created millions of middle-class careers can continue doing so at the same pace.

The biggest impact of AI may not be mass layoffs.

It may be fewer entry points.

AI Is Changing The Economics Of Software Jobs

For decades, India's IT growth followed a simple formula.

More global software demand led to more projects. More projects required more engineers. More engineers created more middle-class opportunities.

Artificial intelligence is changing that equation.

AI tools have the potential to accelerate coding processes, testing software, and performing monotonous tasks for developers. This may enhance productivity, but at the same time, it will decrease the need for manpower in certain cases.

Several studies were conducted on the effectiveness of using AI coding tools. It was discovered that the productivity of software developers increased with the use of such tools. The most significant results were achieved by junior developers.

This creates a new challenge.

Junior engineers start their careers by performing basic tasks. They write code, debug it, test it, and maintain it.

This is a rather unglamorous task, but it is necessary for acquiring the skills of an experienced engineer.

As AI performs such tasks, fewer junior engineers will be required to perform the same number of tasks.

The Missing First Step In The IT Career Ladder

This creates what can be called an experience problem.

Companies increasingly want engineers who understand technology, business needs, and AI tools. But young graduates need opportunities to gain that experience in the first place.

India's IT sector is not collapsing.

Industrial figures reveal that big corporates have been recruiting freshers. Companies like TCS, Infosys, and HCL Technologies have carried on their campus recruitments.

Nevertheless, there is a shift in the way hiring is being done.

The companies have become more selective. They prefer graduates having knowledge in fields such as artificial intelligence, cloud computing, cybersecurity, and data engineering.

The traditional hiring approach of recruiting many graduates and training them later is facing difficulties.

This matters because IT services became one of India's biggest engines of social mobility.

For many young Indians, an engineering degree created a path to a technology job, a higher income, and a middle-class lifestyle.

AI does not necessarily threaten the existence of the IT industry.

It threatens the employment intensity of the industry.

A company can grow revenue and improve productivity while adding fewer employees than before.

That is the economic challenge.

India's Bigger Employment Question

A bigger question confronts India.

In case technology leads to a reduction in jobs in the software industry, then what sources of employment lie ahead?

Manufacturing, electronics, healthcare, logistics, tourism, and new tech services may emerge as key employment generators.

But developing such industries needs money, training, and planning.

It is thus not just an issue of technology replacing man.

The bigger concern is the ability of economies to generate sufficient new opportunities as technology becomes more efficient at improving productivity in existing jobs.

India clearly confronts this question.

Technology can make organizations strong.

What lies ahead is to ensure that it also creates avenues for millions of youngsters joining the labor market.

(Disclaimer: This article is for informational purposes only and should not be considered investment advice. The views, opinions, and recommendations expressed herein are those of the respective experts. Readers are advised to consult a qualified financial advisor before making any investment decisions.)

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