It is probably the greatest irony sitting over the new surging economy called India.  India today has millions of job opportunities strewn all over but there is a serious shortage of talent. Employers are desperately searching for suitable talent among the educated young. The tragedy is that most of them are actually unemployable. India’s education system has to be revamped and made contemporary if India has to stay in the global race. 

It is actually the irony of ironies of booming India. The educated young do not have even basic skills. The education system they went through was obsolete and not engineered to deal with the new economy. Employers have scant respect for degrees and high percentages, as they no more need youngsters who are good at learning by rote. They want talent that can innovatively think and creatively deliver. 

Unemployable Graduates

Former President, Dr. A.P.J. Abdul Kalam is of the view that only 25% of graduating students were employable as the rest were poor on technical knowledge, English proficiency and critical thinking that the IT and IT enabled services industry wanted for the emerging Knowledge Process Outsourcing sector.

Sam Pitroda, chairman of the National Knowledge Commission says that of the 90,000 MBA’s that come out every year, only around 10,000 were worth employing. Kiran Karnick, former NASSCOM president, puts the blame at the door of India’s education system saying that only 25 per cent of the country’s engineering graduates deserve jobs. No wonder companies today have to invest heavily in training fresh graduates helping them to unlearn and pick up skills. 

As there are dramatic changes in politics and business as well as international scenarios, there is a need to keep updating the syllabus almost every year.  Manohar Chellani, Secretary General, Education Promotion Society for India, New Delhi, points out that there is tremendous scope for improving the education quality in India and delays to do it will be at a very heavy cost. 

Reforms Needed

The National Knowledge Commission has said that India will have to bring in education reforms if it has to emerge as the workforce of the world. India today needs atleast 1,500 universities, but has only 370. There are more than 550 million young people in need of education but do not have educational institutes to go to. India also needs around 1,500 IIT’s, 1,500 management institutes and 11,500 medical schools. 

At least a million good schools are required. The education minister needs to be someone as dynamic as Sam Pitroda whose recommendations have fallen on deaf ears. 

There is a crying need to improve children’s ability in school to read and write well, understand why arithmetic is important and why they should read newspapers and keep abreast of what is happening to better their world view. Teachers complain that the syllabus is so heavy that they have no time for anything and conducting workshops to improve the personality and perspective of the student is really a luxury.

A study by Pratham, a NGO that is focussed on education, found that 21 per cent of rural school going children between 5 and 16 years were taking tuitions. It was clearly an indicator of the poor level of schooling. 

Shortages Galore

As India sees a construction boom across the country with over 68,000 of national highways, more than 35 airports, two dozen railway stations, freight corridors and others, there is an alarming shortage of civil engineers to put it together.

Industry estimates say that India faces a shortage of over 70,000civil engineers annually.  Only 200 of the 1700 engineering colleges approved by the All India Council for Technical Education offer the course as there are actually no takers. Students opt for the IT sector, as the prospects there are immediately bright. India produces just about 10,000 civil engineers every year. Many students actually drop out and get into lucrative jobs offered by call centres and the IT sector. So, colleges have actually been cutting down on the course as it is not seen as a priority. Faculty is also short in this area as civil engineering was on the bottom of the student’s wish list.

Construction firms are now hiring retired personnel at fat pay packages as there is no talent available. The Builders Association of India says that the syllabus at engineering colleges needs a change, as they do not reflect changes in technology use.

Though the IT industry needs 3.5 lakh engineers a year, only 1.5 lakh are available. This could lead to a shortage of over five lakh engineers in the next few years. The National Knowledge Commission has now suggested that premier educational institutions like the Indian Institute of Technology take lesser-known engineering colleges under its wing so that their mentoring helps them to raise standards of other colleges. 

Pitroda says that two thirds of engineering institutions were based in the four southern states and Maharashtra and so a different set-up with public-private partnership was required to establish new quality institutions. 

Shortage of Talent

There is a serious shortage of talent. Even doctors are falling short says a recent Planning Commission report. India needs around 6,00,000 doctors, 10,00,000 nurses and 2,00,000 dental surgeons.  Health ministry estimates that India needs at least 21,00,000 nurses if there has to be one nurse for a population of 500. But only 11,00,000 are available. India has only one doctor for among 10,000 people. Tally this with Australia that has around 250 and the United States about 550.  

Dr. Fitzhugh Mullan of George Washington University says that the United States by poaching doctors from countries like India was displaying “poor citizenship” in the international community. Mullan’s research shows that areas such as sub-Saharan Africa (13.9 percent), the Indian subcontinent (10.7 percent) and the Caribbean (8.4 percent) lose large numbers of doctors to the big four nations. Mullan’s research shows that India provides about 55,000 doctors to work in the four developed nations. About 40,000 of those work in the U.S. The Philippines come next with about 18,000 doctors exported, mostly to the U.S.  The Planning Commission says that around 60,000 Indian doctors are working in the U.S., U.K., Canada and Australia alone. 

Aviation is another area that is annually growing at a rate of around 25 per cent. New airlines are being introduced, smaller players are coming in and there is a serious shortage of pilots. By 2017, there would be around 2,00,000 jobs. Today, airlines are hiring foreign pilots because of the severe shortage. Some of them do not know English well and are having a tough time communicating with air traffic controllers leading to an alarm in security circles.

A Nasscom-Crisil report says that the IT industry is expected to create about 11 million jobs. In another year, India would need atleast half a million professionals in the IT sector. Presently, the IT sector employs over 3,50,000. But it is woefully short of around 90,000 workers. By this year, the shortfall is expected to cross 2,00,000. More than a thousand CEO’s would be required across industries. 

Of the total job market of around 496 million people, 30 million are in the organised sector. Of these 30 million, nearly 24 million are blue-collar workers who are semi skilled like mechanics, fitter, electricians, plumbers and other technical hands who usually come out of industrial training institutes or ITIs. These institutes take student who have completed their tenth standard and put them through various vocational courses like carpentry, welding, motor winding and the like.  There are 1896 of these institutes but most of them are in a poor shape with outdated equipment or machinery that does not work anymore. The curriculum also badly needs upgradation.

The BPO Boom

Promising to grow by the day is Business Process Outsourcing (BPO) and has the potential of employing around 23 lakh in another two years. It has rapidly grown to become a $9.5 billion industry. But again, the BPO sector has been seriously affected by the lack of trained personnel.  Attrition is the order of the day as salaries sky rocket. 

Management Guru, C.K. Prahalad who is presently professor of strategy at the University of Michigan’s Stephen M Ross School of Business, says that technological innovation and human capital formation can make India home to the world’s largest pool of trained manpower. Essentially, this means 200 million college graduates and 500 million skilled workforce. This will be no mean achievement, as it would calculate to India having 16 per cent of the world’s graduates and 40 per cent of the world’s workforce!

Prahalad who is highly respected all over the world said that India had the potential to produce not less than 30 Fortune 100 companies if it harnessed its entrepreneurial skills dexterously. 

Improve Quality of Education

But for this to happen, the quality of education has to improve. Today, there are scores of management schools churning out thousands of MBA’s who just do not have the vision, aptitude or even the skill the industry requires. They are taught by teachers who are inexperienced, do not read, are not updated and have no connections with the industry. Many are there because they cannot be anywhere else!

It is education that can give the cutting edge today as India is throwing up new business models that have very low capital intensity, extremely low fixed costs and conversion of fixed costs into variable costs.

India is in a singularly commanding position as it has a young upwardly mobile class ready to take the plunge unlike other countries like China, United States, Singapore, Japan, Korea, Taiwan and Hong Kong. This is precisely why international companies are looking at India seriously-India is the land of investment opportunity both because of the way the economy is growing and the easy availability of young workers.

Politicians, policy makers and bureaucrats now need to figure out that as the IT sector booms, the emphasis will be on skilled and cost-effective labour. No more is IT going to be India-centric, it is going global. Quality professionals are the need of the day. We need to design a system that will ensure that in the years to come. There is very little time to lose, as it is fiercely competitive.

Opportunities are virtually flooding India. One of them is Knowledge Processing Outsourcing (KPO) which is a $3 billion industry. It has opportunities galore like financial analysis, equity research, treasury operations, credit decision processes and accruals. One estimate says that the KPO industry may touch between 10-12 billion dollars by 2010 creating as many as 2.5 lakh jobs.

Then, there is the Legal Process Outsourcing (LPO) that has tremendous potential, as law services are comparatively cheaper in India. New opportunities are in areas like patent application, drafting, legal research, pre-litigation documentation, advising clients, analysing draft documents and writing software licensing agreements.  

A hiring spree is on in the booming retail sector. But getting the right talent here is the problem. As retail expands and grows, the expectation is that at least two million jobs will be created by 2010.

If students doing hospitality courses are lapped up even before they have finished their last day in college, it is because tourism is growing. There will be around 95,000 opportunities in the hospitality sector in another four years.

Rural India is now holding out the promise of non-farming jobs. According to the Fifth Economic Census 2005 that was released in May 2008, employment is growing in other areas like retail trade, manufacturing and allied agricultural activities such as livestock farming and fishing.  Today there are ten million people in non-farming jobs in rural India and it is growing by the year. Finally, in a small way, economic growth is benefiting rural India and creating opportunities that were not there before.

But in this exciting scenario, one thing is certain. If you want to be a part of the party, you have to be talented. All development is futile if India is not liberated from poverty and illiteracy. Only good education can be a catalyst for that. It is a challenging time for policy makers. They will have to come out with out of the box solutions peppered with the kind of imagination that they have not showed till now to tackle India’s new challenge.    
 
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