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Indian data annotation players: Key Challenges and COVID-19 Impact
Indian data annotation players: Key Challenges and COVID-19 Impact

May 11, 2021

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Data privacy, lack of cultural context & language barriers are challenges restricting Indian Players to access global markets with COVID-19 exacerbating the situation resulting in significant capital investments

Well-labelled and annotated data is critically essential for effective AI-powered solutions, as some refer to it as the Achilles’ heel of AI. My previous articles highlight the fundamental building blocks required for data annotation, India data annotation landscape and the India advantage.

The focus of this article is to uncover the challenges faced by the Indian data annotation players, especially the managed service providers (MSPs) that dominate the India market contributing to about ~65%-70% of the revenues derived. Some of the key challenges faced by Indian players, especially when it comes to expanding their access to global markets are listed below:

data annotation challenges
Source: Data Annotation - Billion Dollar Potential Driving the AI Revolution

Language barriers: Several countries have specific language annotation requirements that India is currently unable to cater to at scale. These countries include Japan, South Korea, Taiwan, South-east Asia, Western Mainland Europe, South & Central America, Middle East and North Africa

Data Privacy Concerns: Services across data sensitive sectors like BFSI, Healthcare offers data security challenges for delivery of offshore services – on-shore centres are needed for labelling. For labelling in some sectors in the EU market, on-site delivery centres are also being setup because of GDPR and data privacy regulations.

Lack of cultural context: Content acceptable in one culture or region might be offensive in another, different cultural specific annotation requirements pose challenges in training and context specific labelling

COVID-19 exacerbated the Indian managed service providers’ challenges

Indian managed service providers with full time workforce working out of office have carried out significant investments in Infrastructure and instituted virtual mentoring and coaching while switching to the WFH model.

COVID impact data annotation
Source: Data Annotation - Billion Dollar Potential Driving the AI Revolution

Connectivity Concerns

  • As majority workforce hails from Tier II/III cities and even rural areas, for WFH, broadband  connections were set-up for  employees by working with  Telecom Service Providers
  • Some areas could not be serviced by Broadband networks leading to the MSPs acquiring 4G dongles

Infrastructure Issues

  • Prior to COVID, the people to equipment ratio for the MSPs was 2:1 (employees in 2 shifts using the same equipment)This has changed to 1:1 with additional laptops had to be acquired for all employees
  • For certain use cases (LiDAR), additional high-end gaming laptops (RAM = 16 GB) had to be acquired for annotation from WFH

Remote Mentoring Challenges

  • Service providers had to change their training and guidance methods as the employees were not accustomed to WFH without mentors and peers
  • Adaptation to WFH model along with innovative mentoring techniques have ensured business continuity after the initial disruption

Financial Viability Conundrum

  • Salary of an IT service professional to the cost of machine/infrastructure is vastly greater than the salary of a data annotator to the cost of machine/infrastructure
  • The higher financial liability of infrastructure (for data annotation industry) had to be factored in by the service providers

Watch out for my next article that focuses on the challenges of the overall annotation industry and a few recommendations to all key stakeholders that can help boost the Indian data annotation industry. For more details read the full report Data Annotation - Billion Dollar Potential Driving the AI Revolution


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