Question - Guess what happened to the Indian IT services Industry -
Answer- The labour arbitrage has gone.
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anyone tracking it sector ,recently started studying it .if anyone has interesting names to study do comment them
I believe the Western world is actively working to eliminate the advantage that developing countries have traditionally held due to cheaper labour, called “labour arbitrage.” Two key trends are driving this shift: the rapid progress of artificial intelligence (AI), which can be seen as the “software brain,” and the development of humanoid robots, which represent the “hardware body.”
AI systems today are already capable of performing tasks at a level comparable to an average software developer. Meanwhile, progress in humanoid robotics is accelerating. Companies like Tesla are developing general-purpose robots (e.g., Optimus), and Nvidia is providing essential computing platforms for robotics and simulation.
An inflection point will be when humanoid robots with near-human capabilities are available at a price point below $10,000. If that happens, it could become more economically viable to manufacture products domestically (e.g., in the U.S.) than to offshore production, effectively ending the cost advantage of cheaper foreign labour.
Interestingly, Carl Pei, the CEO of Nothing, recently said that the cost of software development is approaching zero. If this statement proves to be true, it might prove to be a Kodak moment for some companies.
I could be wrong, but that’s how I see things moving.
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a interesting perspective Will AI Replace Software Engineers? - Sam Dheepak Thomas
There might be an opportunity for value buy in IT:
Infosys partners with Anthropic to deliver enterprise AI solutions - The Economic Times Infosys partners with Anthropic to deliver enterprise AI solutions - The Economic Times
AMD Partners with TCS to Compete with Nvidia in India’s AI Market
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Bootstrapping projects and features has become faster. Further gains will come from process improvements - software engineering processes such as Scrum will need to evolve, reducing communication/operational inefficiencies. i.e., less time will be spent on managing and more on building.
If less is required now to produce the same, chances are more will get produced - either more of the same or different kinds, i.e., competing/complementary products. Automation did something similar in FMCG - things could be made faster, leading to new categories (remember Dalgona coffee?) and new competitors. And then, what gets built still needs to be maintained - code, databases, integrations, platforms. You just don’t build and leave.
On the flipside, AI output is not deterministic - this applies to code as well. One needs to validate, test, and deploy. What you send to production can’t be left to chance; you need a team - devs, BAs, testers, managers, users - all pitching in. As things stand today, AI is a spoke in the wheel that helps teams release faster.
Then there is governance - data privacy/security concerns remain. Enterprises are hesitant to share their proprietary data, no matter what AI providers’ policies claim. Developing internal models is an option, but needs financial investment - both upfront and ongoing. Some middle ground will have to emerge.
We know B2C AI alone isn’t going to be enough, especially when consumers are pushing back on AI soaked subscription tiers. IT firms are stitching deals to win the perception war, a war likely started by the who’s who, with hundreds of billions at stake. AI has quickly become an industry - too big too fail. If they’ve been ignoring you, you need to shake things up. When stock prices fall, people notice. People act.
Not everything is a push though, there is a bit of pull as well. Enterprises are testing the waters, investing in AI integration where they see measurable gains. Those stubborn, long-pending application modernization projects could finally come to the fore.
AI is expected to cut down on jobs, but jobless growth won’t help AI’s prospects.
Bottom line - you win some, you lose some, what matters is how you adapt and make the most of it - that’s what will differentiate the leaders from the rest.
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