The education system in the majority of Indian education institutions
has for long suffered from crippling deficiencies. This has resulted in
a steady stream of graduates ill-prepared to face the challenges of a
real job. This has been variously termed as "skills gap" or
"talent deficit". Traditionally, industry has tackled the skills
gap by conducting elaborate training programmes. But suddenly, the
skills gap issue has begun assuming demonic proportions to the extent
of potentially proving to be one of the prime reasons to severely dent
India's competitiveness in the global economy. The reason for the
panic button being pressed is because the skills gap issue has squarely
impacted the fledgling outsourcing industry. The simple reason for this
is because a skills shortage in India will force companies to limit
their India operations & explore opportunities in other developing
countries which are equally / more competitive - cost wise. This will
obviously result in reduced job opportunities within the country & is
thus a matter of concern to the student community in equal measure as
it is to the Indian industry.
The aim of this posting is to discuss various facets of this emerging
threat to India Inc. In order to enable an informed discussion,
relevant facts & analyses culled from various authoritative sources are
given below :
1. McKinsey report on "Extending India's leadership of the global
IT & BPO industries"
(www.mckinsey.com/ideas/art...mary.pdf).
India's economic growth will be greatly accelerated if the India
based IT & BPO industries sustain their global leadership & are able to
generate approximately US$60 billion inexport revenues by 2010.At this
level, these two industries alone can contribute 1% per year to GDP
growth for the next five years. India's offshoring industries could
well become one of the world's great export industries at par with
France's luxury goods industry, Japan's automotive sector &
Taiwan's electronics manufacturing cluster.
Currently only about 25% of technical graduates & 10 - 15% of general
college graduates are suitable for employment in the offshore IT & BPO
industries respectively. As countries from around the world enter the
market & competition for offshoring contracts intensify, India must
improve the quality & skills of its workforce.
India will need a 2.3 million strong IT & BPO workforce by 2010 to
maintain its current market share. Our supply projections indicate a
potential shortfall of nearly 0.5 million qualified employees.
2. www.nasscom.in/Nasscom/te...alPage.aspx
Much has been said about India's great IT manpower edge and the vast
pool of skilled professionals that are available to the high-growth
IT-ITES sectors. Today, even India's burgeoning population, with 50
percent people in the average age of 25 years and below, is emerging as
a major asset for the nation. It is being said that with such a large
group of people in the working age group category, India is unlikely to
face any manpower crunch in the future.
This is of course the rosy side of the picture. The facts however, show
that this large body of people is not directly employable and needs to
be transformed into "suitable" offshore talent, before it can be
used by the country's technology industries.
3. www.nasscom.in/Nasscom/te...alPage.aspx
"To meet the targeted revenue of $50 billion, the software and services
industry would require a manpower of 2.1 million by 2008 from the
current 800,000 people. However, against the demand of 2.1 million, the
industry can employ only 1.1 million by 2008," quoting a McKinsey
estimate, Mr Kiran Karnik, president of Nasscom said while addressing
the first ever HR Summit 'Nasscom HR Summit 2004' here.
4. www.nasscom.in/Nasscom/te...alPage.aspx
"I congratulate the Indian IT industry for achieving $33.6 billion
business for the 2006 from $28 billion in 2005. It is notable that the
NASSCOM is aiming to achieve $60 billion by 2010." After a brief pause,
the President, Dr APJ Abdul Kalam, asked the delegates, "How about
achieving $200 billion?"
has for long suffered from crippling deficiencies. This has resulted in
a steady stream of graduates ill-prepared to face the challenges of a
real job. This has been variously termed as "skills gap" or
"talent deficit". Traditionally, industry has tackled the skills
gap by conducting elaborate training programmes. But suddenly, the
skills gap issue has begun assuming demonic proportions to the extent
of potentially proving to be one of the prime reasons to severely dent
India's competitiveness in the global economy. The reason for the
panic button being pressed is because the skills gap issue has squarely
impacted the fledgling outsourcing industry. The simple reason for this
is because a skills shortage in India will force companies to limit
their India operations & explore opportunities in other developing
countries which are equally / more competitive - cost wise. This will
obviously result in reduced job opportunities within the country & is
thus a matter of concern to the student community in equal measure as
it is to the Indian industry.
The aim of this posting is to discuss various facets of this emerging
threat to India Inc. In order to enable an informed discussion,
relevant facts & analyses culled from various authoritative sources are
given below :
1. McKinsey report on "Extending India's leadership of the global
IT & BPO industries"
(www.mckinsey.com/ideas/art...mary.pdf).
India's economic growth will be greatly accelerated if the India
based IT & BPO industries sustain their global leadership & are able to
generate approximately US$60 billion inexport revenues by 2010.At this
level, these two industries alone can contribute 1% per year to GDP
growth for the next five years. India's offshoring industries could
well become one of the world's great export industries at par with
France's luxury goods industry, Japan's automotive sector &
Taiwan's electronics manufacturing cluster.
Currently only about 25% of technical graduates & 10 - 15% of general
college graduates are suitable for employment in the offshore IT & BPO
industries respectively. As countries from around the world enter the
market & competition for offshoring contracts intensify, India must
improve the quality & skills of its workforce.
India will need a 2.3 million strong IT & BPO workforce by 2010 to
maintain its current market share. Our supply projections indicate a
potential shortfall of nearly 0.5 million qualified employees.
2. www.nasscom.in/Nasscom/te...alPage.aspx
Much has been said about India's great IT manpower edge and the vast
pool of skilled professionals that are available to the high-growth
IT-ITES sectors. Today, even India's burgeoning population, with 50
percent people in the average age of 25 years and below, is emerging as
a major asset for the nation. It is being said that with such a large
group of people in the working age group category, India is unlikely to
face any manpower crunch in the future.
This is of course the rosy side of the picture. The facts however, show
that this large body of people is not directly employable and needs to
be transformed into "suitable" offshore talent, before it can be
used by the country's technology industries.
3. www.nasscom.in/Nasscom/te...alPage.aspx
"To meet the targeted revenue of $50 billion, the software and services
industry would require a manpower of 2.1 million by 2008 from the
current 800,000 people. However, against the demand of 2.1 million, the
industry can employ only 1.1 million by 2008," quoting a McKinsey
estimate, Mr Kiran Karnik, president of Nasscom said while addressing
the first ever HR Summit 'Nasscom HR Summit 2004' here.
4. www.nasscom.in/Nasscom/te...alPage.aspx
"I congratulate the Indian IT industry for achieving $33.6 billion
business for the 2006 from $28 billion in 2005. It is notable that the
NASSCOM is aiming to achieve $60 billion by 2010." After a brief pause,
the President, Dr APJ Abdul Kalam, asked the delegates, "How about
achieving $200 billion?"
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