AI could take out international outsourcing next
- The world's largest provider of call centers is the Philippines, and the country now worries that AI will negatively impact its $23 billion sector, reports Reuters. AI's translation capabilities jeopardize the Philippine's largest selling point in outsourcing — use of the English language.
- AI is threatening to replace approximately 40,000 to 50,000 "low-skilled" jobs in five years' time, according to the report. For example, IBM Philippines will transition to more automation in the next five years. Its voice business was divested in 2013, according to the report.
- The Philippines replaced India as the world's top business process outsourcing (BPO) for voice-based services in 2011, Reuters reports. By 2022, the Philippine's share of the global outsourcing market is projected to hit about $250 billion.
AI market revenue is forecasted to grow 487% between 2016 and 2020, and employees need to adapt to the potential threat AI poses to their jobs. Still, the Philippines believe coupling the tech with their English skill set will be a "game changer" to the industry, according to the report. Some are hopeful that the tech will strengthen its BPO services.
But AI is not necessarily the job threat to the U.S. market that many fear. The technology is expected to cultivate an additional 2.3 million jobs by 2020, eliminating only 1.8 million jobs.
Still, U.S. companies that use foreign countries as a means to reduce costs now have the option of weakening those ties. With the option to replace outsourced work with automated technology, companies are likely to jump at that chance.
This also comes at a time when domestic outsourcing is beginning to overtake international outsourcing. Benefits present themselves in time zone management and lack of cultural barriers despite an increase in pay.