Creating jobs in India

Friends,

The issue that concerns most Indians working in the high tech industry is the tightening of immigration and the flow of visa holders particularly to the US. Two pieces of legislation that were introduced in the 110^th Congress (the previous one) in the US and did not pass were the comprehensive immigration bill and a more specific one that that would limit the number of H1B visas available to companies to a percentage of their total employment. In meetings with the teams of Senate Majority leader Reed who is widely expected to pilot the immigration bill this fall through the 111^th Congress and the Durbin-Grassley Senatorial duo whose bill on visa limitations will hit the floor anytime soon, our sense is that while none of these are specifically targeted at the Indian knowledge worker community, this may well be the inadvertent outcome as a pro labour administration walks the tight rope between its focus on America and its desire to honour international commitments.

Closer home, there is a very real concern that with fifteen million young people hitting the job market every year, any prolonged slowdown in job creation can result in social discord and make many parts of the country look like sub Saharan Africa. In an attempt to find a permanent solution to the dilemma of employability for graduating engineers and IT graduates, an experiment launched in Western India to bridge the gap between vocational skills and industry expectations has started gaining traction and could well be the panacea for the ills that are beginning to plague professional education in the country. The Global Talent Track initiative is modelled on the German dual system where industry provides internships and practical experience to young students who get this experience even while they are in college.

The very successful German experiment which attracts funding of over twenty billion Euros every year from the Government is run by the chambers of commerce all over the country and focused on over three hundred vocations. To replicate this in India, the active collaboration of industry leaders with technology based education providers and the formal academic sector is required and funding will have to be provided by venture capital and private equity funds to supplement the largesse of the State and University Education funds. While the ITI experiment is yet to take off to provide real skills in the manufacturing sector in spite of many partnerships with CII members in various parts of the country, the transformation of professional education for the services industry ‘ IT BPO Hospitality Healthcare, Retail, Media and Entertainment etc, is very feasible if industry comes forward with internship opportunities and projects, colleges and universities open their portals like Pune University has done to set up centres for vocational excellence available to all faculty members and students and well funded private education providers and technology partners put together the best courses that can be undertaken on full time or part time basis by graduates and college students respectively. The good news is that in many sectors the skill gaps are not huge ‘ some corrective action taken today in the form of well designed learner centric education can capitalise on the lull that this year will surely witness and build the base for an order of magnitude improvement in employability in the years to come.

Ganesh

Perspectives for Indian IT

Perspective 2020 - the NASSCOM-Mckinsey study

The preview of the report presented today at the NASSCOM Leadership forum by the Mckinsey team has clearly spelled out the numerous benefits that the growth of the industry in the last ten years has delivered to the country. Tertiary education in the key IT states has grown over six times, the opportunities for youth, particularly young women has multiplied with women now constituting over thirty percent of the knowledge workforce and over forty-five percent of urban job creation can be directly attributed to our industry - that’s a lot to be proud about. Most important, we can all take pride in the fact that this is one industry which has put India on the world map!

However there are some dramatic shifts expected in the nature of work done by software exporters which need to be understood by all firms who do want their portfolio to be rendered obsolete by market shifts. Automation of basic services will see popular present day services like voice based call centers and even application development, support and testing go into a growth decline and rapid productivity gains and increasing standardisation will limit the job creation potential of the industry. The recessionary trends in the core markets of USA, UK, Europe and Japan will also necessitate the search for new markets like Brazil, Russia and China and a sectoral shift into more recession proof segments like public sector, utilities and healthcare. Product and services innovation and even process and business model innovation through the deployment of truly global delivery models will be necessary for firms to shift from being arbitrage players to true transformation partners and global supply chains will need to be set up for just in time recruiting at development centers established on a global footprint.

All this will mean that industry players who want to survive the slowdown and become leaders in the next wave of growth will have to consider multiple “step-out” models. These could be delivery optimisation through lean factories, customer centric full service provider approach in chosen verticals, domain expertise or even new solutions like Software as a Service etc, all of which would need strategic choices to be made for the future. Companies can emerge as winners through four action sets. The first set oriented at a rebalancing of customer and services portfolio will call for end to end capabilities in recession resilient areas like Healthcare as a segment and BRIC as market. The second set will be an adaptive sales offering like impact sourcing or a portfolio which targets the quick savings sought by recession hit customers. The third set will be for operations and delivery strengthening to bite twenty to thirty percent from the cost base of existing providers and the fourth and final set would be to make strategic investments in transformative acquisitions, strategic alliances and key markets like India.

An action agenda is clearly needed for the entire industry and its eco-system partners like the government and academic institutions. Catalysing growth beyond today’s core markets will enable the reinvention of business models and the development of new verticals and geographies, establishing India as a trusted sourcing destination will need a wider location network including dedicated knowledge towns, a high caliber talent pool of over four million people will need to be developed with employable skills through industry-academia partnerships and there needs to be a sharp focus on innovation both for the external markets and for enabling inclusive growth in our own country. Opportunities abound but there are also challenges - to be faced by entrepreneurs, firms and the entire industry. We are confident that we will prevail!