Nandan Nilekani argues that AI will reshape India’s job market, with large corporations more vulnerable to automation and job losses, while small businesses will become the main source of employment.

Large organizations face automation risk due to standardized processes, potentially slowing net job growth as AI scales.

India’s future employment engine will be the vast base of small firms and entrepreneurs, offering diverse functions and flexibility less susceptible to wholesale automation, driving grassroots job creation.

To support this transition, he advocates extensive deregulation and a simpler business environment that eases starting, operating, and expanding small ventures while cutting compliance barriers.

Policy recommendations center on deregulation and a streamlined environment to enable startups, with reduced compliance hurdles for small enterprises.

Strengthening digital public infrastructure, including the RBI Account Aggregator framework and the Open Network for Digital Commerce, can improve access to finance, markets, and digital services for smaller firms.

Digital public infrastructure, such as the RBI Account Aggregator and Open Network for Digital Commerce, helps small firms access finance, markets, and services to scale.

The insight emphasizes policy and economic strategies that support and enable small businesses to drive job creation in an AI-driven economy.

He urges a fundamental shift in the mental model of job creation, prioritizing broad-based entrepreneurship over reliance on a few large employers.

The remarks come amid ongoing AI-driven investments and policy debates about AI’s long-term impact on employment, productivity, and growth.

He calls for portable benefits and portable professional credentials to align with a labor market marked by frequent job changes, independent work, and gig engagements.

A shift toward more dynamic employment—frequent changes, independent work, and gigs—necessitates portable benefits and credentials to provide security and flexibility across employers.