AI and the Future of Work: Crisis or Catalyst?

Introduction

The rapid advancement of Artificial Intelligence (AI) is reshaping the global labor market, presenting both opportunities and challenges. While AI-driven automation enhances productivity and efficiency, it also raises concerns over job displacement and inequality. The Economic Survey 2024-25 explores the potential impact of AI on India’s workforce and how policymakers, businesses, and institutions can navigate this technological shift.

This blog examines AI’s implications on employment, workforce upskilling, and policy interventions to ensure that AI acts as a catalyst for growth rather than a crisis for jobs.

1. AI and the Changing Labour Market

AI is transforming industries like healthcare, finance, education, and manufacturing.
Global AI investment surged from $3 billion in 2022 to $25.2 billion by 2023, indicating rapid adoption.
An estimated 300 million jobs worldwide remain exposed to AI-driven automation.

Key Takeaways:

AI is driving efficiency, but proactive measures are needed to manage employment transitions.
Workforce reskilling is critical to prepare for the AI-driven job market.

2. AI Disruptions: Lessons from Past Technological Revolutions

The Industrial Revolution and automation in manufacturing led to short-term job losses but long-term productivity gains.
Previous disruptions (e.g., steam engines, computers) created more jobs than they eliminated over time.
AI’s impact will depend on how effectively it is integrated into business and labor policies.

Key Takeaways:

AI, like past innovations, will reshape but not eliminate work.
Investment in adaptive learning and skilling is essential.

3. The Rise of AI-Augmented Jobs

AI will automate routine tasks but create demand for higher-order skills like problem-solving, creativity, and emotional intelligence.
Customer support, research, and content creation are seeing a shift towards AI-human collaboration.
India’s banking sector is actively adopting AI for automation, yet human oversight remains essential.

Key Takeaways:

AI will not replace jobs entirely but will redefine work structures.
Human-AI collaboration can improve job quality and efficiency.

4. Women in AI: Opportunities and Challenges

Female workforce participation in India increased from 23.3% (2017) to 41.7% (2024).
AI-driven automation may disproportionately impact women in routine-intensive roles.
Upskilling programs focused on AI and STEM can ensure gender-inclusive growth.

Key Takeaways:

Promoting AI literacy among women is crucial for inclusive growth.
AI can bridge employment gaps by enabling flexible, remote work opportunities.

5. AI, Productivity, and Economic Growth

AI has the potential to increase global GDP by 7% over the next decade.
Generative AI adoption can automate up to 30% of current work hours by 2030.
Industries with high demand elasticity, like finance and healthcare, will benefit the most from AI adoption.

Key Takeaways:

AI can drive economic growth if businesses invest in human capital development.
Sectoral demand elasticity will determine AI’s employment impact.

6. Policy Recommendations: Building a Future-Ready Workforce

Invest in Digital and AI Education: Introduce AI literacy and coding in school curricula.
Enhance Workforce Reskilling Programs: Expand initiatives like PMKVY to include AI-centric training.
Encourage Ethical AI Adoption: Develop transparent AI policies to ensure fairness in decision-making.
Strengthen Labour Market Policies: Provide social security for displaced workers and encourage job transition support.
Promote AI for Productivity, Not Just Cost-Cutting: Encourage AI-human collaboration in high-value tasks.

Conclusion

AI is not a job killer but a job transformer, creating new opportunities while demanding new skills and adaptable policies. India must focus on AI-driven skilling programs, ethical AI governance, and inclusive economic policies to ensure that AI serves as a catalyst for economic growth rather than a crisis for employment.

With strategic investments in education, workforce development, and AI innovation, India is well-positioned to harness AI’s potential for a prosperous, tech-driven future.

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This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.

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