AI and the Future of Work
Global and Indian Dimensions
The International Labour Organization (ILO) and World Economic Forum (WEF) have both projected that AI will create significant job displacement in information-intensive work — back-office processing, customer service, paralegal work, and basic software coding — while generating new roles in AI oversight, data governance, prompt engineering, and AI ethics. In India, the structural challenge is amplified: the formal sector employs only 15-20% of the workforce, so displaced formal workers cannot easily absorb into the informal sector without a significant welfare loss. Meanwhile, the informal sector itself faces AI disruption as digital platforms replace manual gig work matching.
- WEF Future of Jobs Report: AI to displace 85 million jobs globally by 2025 but create 97 million new ones — net positive, but with large transition costs concentrated in specific sectors and regions.
- India's 600 million-strong labour force: approximately 45% in agriculture, 25% in informal services, and only 6 million in formal IT/BPM — the most immediately AI-exposed formal segment.
- "Skill-biased technological change" — a concept from labour economics — suggests that technology adoption consistently raises demand for high-skill workers and depresses demand for routine-task workers; AI represents the latest and potentially most rapid instance of this.
- Indian IT firms' shift from man-day billing to outcome-based pricing reduces the number of workers needed per project, a trend that will accelerate as agentic AI matures.
● Tracked since February 16, 2026 · last seen February 20, 2026 · updates as the daily brief publishes