Is artificial intelligence all dependent on human labor? And is it Indian labor?
Recently, there have been reports that Amazon's unmanned fresh food chain store, which claims to use AI &#34;black technology&#34; to achieve a fully automated supermarket where customers can &#34;grab and go without scanning&#34;, actually has a team of up to 1000 people in India who use remote video monitoring to visually identify the products customers purchase.
After the news was exposed, Amazon was mocked across the internet, with some joking: AI=Anonymous Indians.
But behind the laughter, this seemingly satirical news reflects the strong capabilities of India's computer services industry. Goldman Sachs believes that as a key hub for global software outsourcing services, India is quietly rising as the &#34;world's service factory&#34; in the digital age.
Goldman Sachs' Asian economic analyst Santanu Sengupta and his team pointed out in a recent research report that with the accelerated shift of the global trade focus towards computer and consulting services, India's service export industry is entering a golden period of vigorous development.
Goldman Sachs stated that since 2005, India's service exports have grown at a compound annual growth rate of nearly 11%, far exceeding the global growth rate, especially in the areas of computer and professional consulting services. By 2023, India's share in global service exports will increase from less than 2% to 4.6%.
The rise of Global Capability Centers (GCC) has made a significant contribution to the rapid growth of India's professional consulting exports, with GCC revenues growing fourfold over 13 years.
Goldman Sachs pointed out that leveraging advantages such as continuously improving infrastructure, abundant talent pool, and open business environment, India is positioning itself as a core player in the global service trade landscape, becoming the new &#34;world's service factory.&#34; In its base case scenario, by 2030, India's service exports are expected to reach 11% of GDP, an increase of 1.3 percentage points from 2023.
<h2>Rapid growth in global computer service exports, with India as a major player</h2>
With technological advancements and reduced costs of cross-border communication, global service trade has achieved rapid development in recent years, with growth rates consistently outpacing traditional goods trade.
Since 2005, global service exports have tripled, reaching 7% of global GDP by 2023, with growth rates surpassing that of goods exports.
In this process, computer and consulting services have experienced the most rapid growth.
From 2005 to 2023, exports of computer services and consulting services have grown by 7 times and 4.7 times respectively, accounting for 12% and 10% of global service exports by 2023, compared to 4.4% and 5.7% in 2005.
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Despite the United States and Germany maintaining their share in global service exports, the share of other major developed markets such as the United Kingdom, Japan, and France has declined. Emerging economies like India, China, and the United Arab Emirates have risen rapidly in the field of service exports, demonstrating strong competitiveness.
Thanks to a large population dividend, continuously improving digital infrastructure, and increasingly open market environments, India, China, and the United Arab Emirates have increased their share in global service exports by 2.7, 1.5, and 2 percentage points respectively from 2005 to 2023, ranking among the top in terms of growth rate among all economies globally.
<h2>India's Service Export CAGR Reaches 11%, GCC Revenue Quadruples in Thirteen Years</h2>
A Goldman Sachs research report shows that service exports have become a new engine driving India's economic growth.
From 2005 to 2023, India's service exports have rapidly developed at an annual compound growth rate of 11%, reaching a scale of nearly $340 billion, advancing at almost twice the global average rate. In 2023, the share of service exports in India's GDP climbed to 9.7%, an increase of 3 percentage points from 2005.
Computer services are the main driver of India's service exports. With a strong IT talent pool and cost advantages, India has become an important hub for global software and information technology services. In 2023, the export value of computer services accounted for nearly 50% of India's total service exports, leading in all sub-sectors.
In terms of growth rate, the most eye-catching is the export of professional consulting services. The export value of high value-added services such as business consulting, management consulting, and financial consulting has increased from 7.2% in 2005 to 18.3% in 2023, with a rapid compound annual growth rate of 17% over eighteen years.
This is mainly due to many multinational companies setting up Global Capability Centers (GCC) in India, outsourcing core businesses such as research and design to India.
According to Goldman Sachs statistics, as of the 2023 fiscal year, India's GCC total revenue has quadrupled compared to thirteen years ago, reaching $46 billion, providing 1.7 million jobs.
Goldman Sachs stated that with more leading companies increasing their investments in India, GCC is expected to become a &#34;fortress&#34; for India to build a modern service industry, injecting continuous growth momentum into related export sectors
<h2>Future: Service Exports Expected to Reach 11% of India's GDP</h2>
A report by Goldman Sachs pointed out that the continued prosperity of India's service exports and the stable growth in global service demand are undoubtedly the biggest driving forces. With the accelerating shift of economic focus towards the service industry in various countries, as well as the digital wave sweeping across all sectors, &#34;Indian services&#34; are expected to have a broader market space.
On the other hand, India's continuously improving business environment, upgrading infrastructure, and abundant talent pool will continue to support strong growth in service exports.
Therefore, Goldman Sachs predicts that India's service exports will reach 11% of GDP by 2030 (9.7% in 2023).
Goldman Sachs pointed out that in recent years, service exports have become an important factor in buffering India's external balance against external shocks to commodities/supply side. The growth of service exports will make India's external sector relatively resilient in the medium term and reduce the volatility of the Indian Rupee.
Goldman Sachs expects the trend of high-value service exports to continue, which will drive the growth of domestic high-end discretionary consumption and real estate demand. The growth of service exports also helps stabilize India's external balance and enhance the economy's ability to withstand external shocks.
Assuming that from 2024 onwards, there are no significant changes in commodity prices and trade balances, then from 2024 to 2030, India's current account deficit may average around 1% of GDP.
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Indian service exports have grown at a nearly 11% compound annual growth rate, especially in the areas of computer and professional consulting services. It is expected that by 2030, service exports will reach 11% of India's GDP. Goldman Sachs believes that India is emerging as the "world's service factory" in the digital age

Is AI all about Indians? India has become the "world's service factory"