One of the main paradoxes of this country has been the fact that in spite of our billion plus population, there continues to be a shortage of skilled talent for the emerging industry sectors like IT BPO Retail Hospitality and Healthcare. Another paradox that is emerging is that in spite of the large number of new colleges of engineering and management set up, particularly in states like Maharashtra Tamilnadu and Andhra Pradesh, there is still a clamour for employable graduates by the industry and many available seats are going a begging in the newly minted colleges as disillusionment sets in with the quality of talent emerging from these institutions.
The solutions have been staring us in the face for quite some time. The Education systems in our country need to be transformed to encourage vocational skills development as an honourable alternative to higher education and in some cases as a skills and employability precursor to enrolling for a formal education degree. An outstanding example of this duality is available at the University of Colorado in their Healthcare programs where young aspirants from all over the state are given an opportunity through video conferencing to acquire adequate skills to become certified bedside assistants and work in paramedical roles. A significant portion of these skilled workers then qualify for an associate Degree at the University and have an option to enroll for a formal Bachelor of Nursing degree and then go to Masters and even PhD programs. This Learn-Earn-Learn continuum ensures both better quality of graduates and a higher gross enrolment ratio, both of which are enormous problems with our education system.
The IT industry’s predilection for recruiting and setting up large campuses only in the Tier 1 cities also needs to be put under the scanner because it creates three problems – excessive congestion in the seven main IT export areas of NCR, Chennai, Bengaluru, Pune, Hyderabad, Mumbai and Kolkata, lack of employment opportunities in cities like Allahabad, Patna, Guwahati, Durgapur etc which have excellent Universities but very few industry investments and rapidly spiraling costs because of the concentration of skilled talent and employment opportunities in few cities. Yeoman efforts by industry associations like CII and NASSCOM has met with a limited response till recently and the clamour for an “Inclusive India” approach and the inclusion of Bharat as a destination for companies seeking viable Tier 2 and Tier 3 options has largely fallen on deaf ears.
However, thanks to the proactive initiatives in some states and the need for industry chiefs to eliminate costs from their balance sheets, there is some stirring of life in these smaller destinations today. The troikas of Southern states have launched significant policy initiatives and investments to take the IT industry into Coimbatore, Mysore, Mangalore and even Vijayawadi, Madurai and Hubli while Kerala is getting its act together and attracting new investments to both Kochi and Trivandrum. The value proposition is compelling, with over thirty percent cost reduction on offer in many cities a fact that has not been lost on the domestic BPO sector and even multinational captives as they wage a war on the rapidly escalating costs in the traditional IT cities.
While the initial response from a clutch of smaller cities is exciting, it will need a concerted Government-Association-Industry push for the right balance to be reached in work allocation within the country. There is no reason at all why eighty percent of applications and infrastructure work cannot shift to smaller locations while for highly skilled tasks like engineering, design or complex applications development, the percentages may be reversed. Given the reality that over seventy percent of industries work continues to be managed services which do not need high skills from the entire team, one can paint a realistic scenario for the year 2020 where the IT industry can be expected to be two hundred and fifty billion dollars in size. At this level, even with productivity improvements and larger IP or product intensity in industry solutions, the direct employment will still be over eight million people and while three million of these could still be in the seven cities, five million jobs could be created in the smaller towns of “Bharat”.
The redistribution of employment and hence of industry locations, revenues and employment is not wishful thinking but will need some clear directions and initiatives from all players in the eco-system. Governments will have to come forward with incentives and scholarships to enable skills development and attract industry investments, industry chiefs will have to be bolder in their moves than that has been evident so far and employees will have to be more flexible with today’s software project and program managers willing to mentor and develop young entrants with less high quality education and weaker communications skills than they would like to employ but still technically capable of learning quickly and deploying as members of large project teams . Industry associations, entrepreneurship financing entities as well as educational institutions and finishing schools will have to play their part in building the eco-system in the chosen locations. There are signs that Chief Ministers and bureaucrats in smaller states are ready and willing to play ball with the industry and build a better future for their youth growing up in smallest locations. The time has come to accelerate this process!
