India offer lowest demand-supply gap in AI, finds NASSCOM

19th February 2023
India offer lowest demand-supply gap in AI, finds NASSCOM

New Delhi, February 19, 2023: Over the past 5 years, the demand for digital skills, especially for talent around Artificial Intelligence/Machine Learning, Big Data Analytics and Data Science has doubled. India is also expected to witness high growth in the demand for Data Science & AI professionals with an estimate of more than 1 million professionals by 2024.
The  National Association of Software and Services Companies (NASSCOM) in partnership with Salesforce and Draup, has released a report titled “State of Data Science & AI Skills in India: Data and the  Art of Smart Intelligence.”  
 India ranks 1st in terms of AI skill penetration and AI talent concentration and 5th in AI scientific publications. India’s AI Skills Penetration Factor has been reported to be 3.09– the highest among all G20 and OECD countries. This shows that India’s tech talent is 3X more likely to have or report AI skills than other countries. 
The role of AI is also expanding. Organizations are planning to invest in AI to address business scenarios across functions ranging from Customer Service, HR, IT Automation to Security. More than 1900 AI-focused start-ups are providing innovative solutions, primarily in the areas of conversational AI, NLP, video analytics, disease detection, fraud prevention, and deep fakes detection. 

As of August 2022, India’s total demand for DS&AI stood at 629K with an installed talent base of 416K. The current demand-supply gap in AI and Data Science stands at 51%, significantly lower than major economies such as the US. Further, the demand for talent is outpacing the growth in AI tech spending. Businesses have pegged several factors concerning the gap between AI spending and Demand. The presence of legacy systems and siloed data are two key bottlenecks faced by Indian companies looking to scale up their AI deployments. Additionally, with growing digital adoption, several players including traditional industries, digital-first businesses and MSMEs are all vying for the same share of AI talent. 
In an assessment of the AI talent capacity, interestingly the study finds that the top 5 roles - ML Engineer, Data Engineer, Data Scientist, Data Architect and DevOps Engineer, together constitute 73% of all AI job openings in India. At the same time, the two top roles - ML Engineer, Data Engineer constitutes 46% of total installed talent.
With widening demand, companies have also ramped up their skilling, reskilling, and upskilling efforts. They are also increasingly looking for talent beyond just the ability to build and run complex algorithms. Businesses are increasingly hiring talent with design-thinking capabilities and people who can combine domain knowledge with technology. To align with the long-term goals of scaling up the talent base in India, the report highlights key recommendations for the Government, the Industry and the Academia. The New Education Policy (2020) aims at introducing AI to students at a young age, imparting knowledge of AI-driven use cases from everyday lives. The need to reform Primary and Tertiary education to improve quality is a key action point for the Government. In the long term, there needs to be focus on employability to reduce the current disconnect between curricula and industry demand via stronger industry-academia tie-ups. 

Says Debjani Ghosh, President of NASSCOM: “Artificial Intelligence today has become the foundational technology for the world’s digital transformation. The opportunities presented by AI are abound. AI-led disruption in India’s core sectors alone has a potential impact of $500bn on India’s economy in GVA terms by 2026. However, this cannot be achieved alone and would require concentrated efforts from the government, industry and academia to ramp up AI skilling and initiatives. at scale. The recent announcement by the government to set up 3 Centres of Excellence to develop AI for India and to make AI work for India is an excellent step forward in building the core capabilities in AI and design thinking needed to drive actionable impact.”
 With over 1.6 million digital talent pool as of FY2022E, India today has emerged as the prime destination for talent, globally. Significant efforts from the government and academia through various skill development programs, AI-Focused curriculums, NEP and specialized AI courses offered by educational institutions and industry initiatives such as FutureSkills Prime are working together to help bridge the talent-demand supply gap in the country. 

Read full report here ( registration required)