TL;DR:
- An AI talent crunch is expected to worsen in the next few years.
- India is facing a severe shortage of AI talent, despite having the second-largest pool of skilled professionals globally.
- Companies in various sectors are establishing captives in India to access AI and data analytics expertise.
- Flexcar, a car subscription startup, is struggling to assemble a team of data engineers and computer vision specialists in Bangalore.
- Competing companies, like Chilean retailer Falabella SA and home improvement retailer Lowe’s Cos Inc., are harnessing AI to drive business growth.
- Many workers in India are retraining themselves to enter the field of AI due to the abundance of job opportunities.
- Forrester Research predicts a rising demand for skilled AI workers, with India, set to benefit from this trend.
- The full potential of AI has yet to be explored, and the future of AI remains vast and promising.
Main AI News:
An AI talent race is sweeping across the globe, captivating business sectors from Silicon Valley to Europe, Asia, and beyond. While industry giants like Google and Baidu Inc. entice top-notch engineers with lucrative packages to build their AI engines, companies in diverse fields such as healthcare, finance, and entertainment are also ramping up their hiring efforts. This surge in demand aims to prevent being caught off guard by industry disruptions.
Among all countries, India exemplifies how the quest for talent is surpassing its availability. With a population of 1.4 billion, India has long served as the back office for the tech industry, offering reinforcements during emergencies. However, even this populous nation is facing a scarcity of data scientists, machine learning specialists, and skilled engineers sought after by companies. The need for talent is insatiable, as Rahul Shah, co-founder of WalkWater Talent Advisors, a leading headhunting firm, points out, emphasizing the core role of AI within organizations.
Recruitment tales border on the absurd. In a recent search managed by Shah’s firm, an employer doubled a candidate’s salary to secure their services. Freedom Dumlao, Chief Technology Officer of Flexcar, recalls an interview with an engineer who claimed to have been offered a BMW motorcycle as a sign-on bonus by a competing employer. Dumlao admits feeling uneasy approaching such offers.
India’s tech industry flourished by leveraging its abundant supply of affordable labor. Companies like Tata Consultancy Services Ltd. pioneered the modern outsourcing model, enabling Western firms to tap into engineering talent halfway across the globe for support, services, and software, often at a fraction of the cost compared to local workers. According to Nasscom, the trade group, over five million individuals are currently employed in tech services in India.
Powerhouses like Google, Microsoft Corp., and Amazon.com Inc. established their own operations in India, employing thousands of locals. Google, now a part of Alphabet Inc., commenced its Indian operations with just five employees in 2004 and has since expanded its workforce to nearly 10,000.
However, this seemingly limitless labor pool is running dry in critical fields. Nasscom estimates that there are approximately 416,000 professionals working in AI and data science in the country, while the demand for another 213,000 is yet to be met. In a February report, Nasscom highlights that “the proportion of unfilled job roles is approximately 51% of the current installed talent base,” signaling a looming risk to growth.
Unfortunately, the situation is likely to worsen. In 2022 alone, India witnessed the establishment of 66 tech innovation centers, known as global capability centers or captives, bringing the total count to nearly 1,600. Previously tasked with IT and customer support, these GCCs have transformed into in-house hubs for business-critical technologies, including AI.
During the first quarter of 2023, companies such as AllianceBernstein Holding LP, Avis Budget Group Inc., Warner Bros. Discovery Inc., and Pratt & Whitney joined the likes of Goldman Sachs Group Inc. and Walmart Inc. in setting up R&D hubs in Bangalore, India.
Vikram Ahuja, the co-founder of ANSR Consulting, a firm that assists in designing and establishing technology centers for corporations, states, “ChatGPT has driven the larger domain of artificial intelligence out of stealth mode.” Last year, ANSR established 18 captives in India, with Ahuja expecting the number to reach 25 this year. He adds, “Many enterprises with Indian captives are accelerating their AI roadmaps to gain a competitive edge.”
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The advent of AI has left companies of all sizes pondering its impact on their future. Can ChatGPT accurately forecast future demand? Will deep learning technologies outperform doctors in medical diagnoses? Could finely-tuned trading algorithms give finance companies with superior technologies a competitive edge that drives their rivals out of business?
According to Biswajeet Mahapatra, principal analyst at Forrester Research Inc., “The talent crunch is going to worsen in the next year or two.” This prediction aligns with the current state of affairs in India, where the scarcity of AI talent is deepening as multinational corporations tap into the country’s talent pool.
India boasts the second-largest reservoir of highly skilled AI, machine learning, and big data professionals, ranking just behind the United States, according to a report by Nasscom in February. In fact, India contributes 16% of the world’s AI talent pool, placing it among the top three talent markets alongside the US and China.
Despite these numbers, Flexcar, a car subscription startup based in Boston, faces challenges in assembling a team of data engineers and computer vision specialists for its data science hub in Bangalore. The team of 60 engineers at Flexcar leverages AI applications to automatically detect vehicle damage upon return. The startup has embraced ChatGPT and is piloting a chatbot that queries trained bots to assist technicians in diagnosing and repairing vehicles.
Freedom Dumlao of Flexcar recognizes Bangalore’s incredible talent in data engineering and anticipates an intensified talent hunt for AI experts. However, convincing top-tier engineers to choose his startup as the most appealing option poses a challenge. Dumlao believes that the freshest ideas and newest innovations will emerge where there is a concentration of talent.
Flexcar’s competitors come in various shapes and sizes. For instance, Chilean retailer Falabella SA has become the first Latin American company to establish a captive in India for data analytics, AI, and machine learning. Ashish Grover, the Chief Information Officer based in Santiago, acknowledges the need to compete with the best. Their efforts have paid off, with a personalized customer platform accounting for over half of the incremental sales from digital targeting. Additionally, an AI-driven recommendation engine has tripled conversions on their mobile app.
Lowe’s Cos Inc., a home improvement retailer, operates a captive tech center in Bangalore that focuses on integrating AI into its products. According to Ankur Mittal, Managing Director of Lowe’s India, the company adopts an “AI first” approach, utilizing predictive algorithms to determine to price and refine search features on Lowes.com. The AI-powered computer vision at the Bangalore hub uses videos and imagery from store cameras to combat shoplifting and analyze store footfalls.
In India, many workers are proactively retraining themselves to secure coveted AI positions. Deepak Kapoor, a data engineer at Thinkbumblebee Analytics, is studying computer vision and large language models to transition into the field of deep learning, where abundant job opportunities await. Kapoor believes he could easily double his salary in a city like Bangalore.
Mahapatra, an adviser to global chief information officers at Forrester, foresees a sustained increase in demand for skilled workers in the coming years. India is poised to benefit from this rush to acquire employees who possess a deep understanding of this new AI-driven landscape. “We haven’t even touched the tip of the AI iceberg,” Mahapatra asserts.
As companies worldwide scramble to secure AI talent and navigate the transformative power of AI technologies, India faces a severe shortage in this critical area. With its impressive talent pool, India stands to play a pivotal role in shaping the AI landscape as the demand for skilled professionals continues to surge. The full potential of AI has yet to be realized, leaving a vast realm of possibilities waiting to be explored.
Conlcusion:
The shortage of AI talent in India, combined with the increasing demand for skilled professionals, signifies a significant opportunity and challenge for the market. Companies across various sectors are establishing their presence and competing fiercely to secure top AI talent in order to drive innovation and gain a competitive edge. The growth potential for businesses leveraging AI technologies in India is substantial, with the country’s talent pool being recognized as one of the largest globally.
As the market evolves, it is crucial for organizations to strategically invest in attracting and retaining AI experts to capitalize on the immense possibilities and shape the future of the industry. Failure to address the talent crunch adequately may result in missed opportunities and the potential to fall behind competitors in the dynamic landscape of AI-driven business operations.
