IT, prosperity and equity(2005)

What Bangalore can do for Karnataka
IT, prosperity and equity
By Rajesh Kochhar 
IT firms should catch people young and train them to their own requisites, rather than lose talent to one another 

The demand of Kannada organisations in Karnataka that jobs be reserved for the local people in Bangalore’s booming IT sector should not be taken at face value and ridiculed. Rather it should be seen as an expression of concern that though some of the world’s well-known IT services centres are located in Karnataka, the State seems to have no use for the Kannadigas themselves. 

The annual 2006 World Development Report published by the World Bank has emphasised the complementarity of “equity and prosperity” and has warned that economic development cannot be sustained if a large fraction of the population is excluded from it. 

Although India’s GDP has shown a healthy annual increase of about 6 per cent for the past many years, there has not been a corresponding rise in employment. About 55 per cent of the work force still depends on agriculture, even though its share in the GDP has come down to a mere 25 per cent. The services sector comprising trade, transport, hotels, communications, financing, insurance and real estate accounts for 50 per cent of India’s GDP but employs only 23 per cent of the work force. 

The glamour boy of the services sector is of course the offshore IT and BPO industry, which currently employs about 7,00,000 people. The requirement is expected to double within three years. Many experts believe that if India’s promising IT sector flounders, it will be because of the shortage of trained manpower. Here then is the paradox. People want jobs, IT firms want people. But still both sides are unhappy. 

The problem lies in the poor quality of our education. Although we churn out a large number of graduates and postgraduates, their employability remains low. It is noteworthy that while the whole world has been talking of knowledge-based economy, those in charge of our State’s education system have not been listening. If anything, we have used globalisation as a pretext to lower our education standards still further. 

A serious consequence of this has gone largely unnoticed. IT is acting as a brain sink. Much of the Indian IT manpower is underemployed. That is, a large number of people are working beneath their intellect, training and capabilities for the sake of a pay packet, which though small in dollar terms becomes attractive when translated into rupees. 

This underemployment benefits foreign firms, which outsource petty jobs to India. This may well be the reason for the excessive Wes-tern praise heaped on the so-called Indian IT prowess, much to the delight of the appreciation-hungry India. 

The official and media hype notwithstanding, India’s IT sector has a long way to go. In this context, the figures provided by the Reserve Bank of India (RBI) are quite revealing. The earnings from software services, tourism, etc, are all grouped under invisible transactions. 

The net invisibles for 2004-05 stand as $31.7 billion, out of which as much as $20 billion comes from private transfers. The Reserve Bank does not give separate figures for IT, but according to NASSCOM, India’s earnings from IT are about $17 billion. Thus, even the gross revenue from the hi-tech IT sector is smaller than the money sent home by Indian workers employed abroad. This should be a sobering thought. 

India’s current share in the global IT market is 1-2 per cent. Our aim should be to push it to about 15 per cent, close to our share in the world population. 

If the IT sector is to grow globally and remain relevant socially, it must squarely address the manpower problem. So far, the IT firms have focused on building their own workplaces as international showpieces while asking the government to provide airports, roads, electricity, water, etc. Education has been nobody’s baby. 

IT firms should not mop up talent floating around the country, and lose it to one another. They should catch people young and train them to their own requirements. About 150 years ago, when British India was digging canals and building railways, its Public Works Department set up its own civil engineering school (which is now IIT Roorkee). 

In a similar manner, Bangalore-based IT firms should set up in Karnataka (but not in Bangalore) a training institute/university of their own. Students should be admitted after 12 years of schooling and trained for short or long periods to qualify for a certificate, diploma or a degree. Apart from technical subjects, they should be taught social and communication skills. It should be possible for a student to enter the job market and then return after a few years for further education. 

At present, the Indian IT sector is primarily operating at the low skill end. It should become broad-band. It should offer services at various levels of skill requirement so that it can offer jobs to a large number of people, consistent with their intellect and training. This way, while still retaining the low-end of the market, India can expand its presence to include higher and higher rungs on the value ladder. 

If the IT firms collectively start now, no one would be asking them for job reservations in three years’ time. In a democracy, it is good to have the people’s goodwill with you, especially when you are prosperous. 

( The writer is a former director of the National Institute of Science, Technology and Development Studies (NISTADS) in New Delhi).


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