India's Employability Gap and the IT industry

Last Saturday I was on a panel titled 'Plugging The Employability Gap', hosted by the two year startup NiceFit at the Centre for Organization Development. The topic is hot, with the economy grappling with shortage of skilled manpower as growth resumes. The focus was on the IT industry, as it is on of the largest sources of jobs in the organized sector. This industry has grown from $4b in 1998 (1% of GDP then) to 70b in 2010 (6% of GDP). It accounts for 16% of India's exports and exports 70% of its output. More than 2.3 million are directly employed (30% of them women) and another 9 million (4 x factor) are indirectly employed.

With growth kicking back in, the industry plans to hire 120,000 - 150,000 in the current fiscal year. If growth continues at the present rate of 20% per annum, the industry will employ a mind boggling 30 million by 2020! This year alone, AP's IT industry needs to hire 90,000 people to meet growth (20%) and attrition (10%). The obvious question is where will these future employees come from? India is witnessing a demographic dividend and will have several hundred million youth coming into the job market. But these statistics may not convey the true picture, as it is said that only 1 in 4 engineering graduates are actually employable today.

A closer look at the numbers in the Hyderabad region (AP state) show that there are 650 colleges graduating 250,000 engineers - 25% of India's output. AP also accounts for 30% of India's overall 3.5 million graduate output across streams. Of the engineering output, 25% get into campus jobs (yes, 1 in 4). Another 10-15% go for higher studies and 8 - 9% end up being self employed (some voluntarily, others due to lack of 'options'). That leaves a whopping more than 50% having nothing to do!

To sum, in the state of AP alone, there are 125,000 engineers (50% of the college output) without jobs while the local IT industry needs 90,000 people but can only hire 62,000 from colleges (25% of the output). This is a net shortfall of 30,000. If supply of talent cannot meet up with the demand, then the rosy growth story will not materialise.

The industry will be forced to ramp up in other geographies (China, Eastern Europe, Philippines etc). There will be more backward integration ie, industry will build its own education infrastructure. Infosys' Global Education Center is an example, 'graduating' 50000 people through its intense six month boot-camp over the last three years.

More in a subsequent post on what it takes to plug this 'Employability Gap'.

Cricket and Tongue Twisters

Yesterday I went with a group of friends to see the India New - Zealand cricket test match. Though Sachin Tendulkar got out almost as soon as entered the stadium, local boy VVS Laxman (a true hero and a humble man) held the fort and pushed India's score along. This was my first international live match in a stadium and i was impressed, even without the zing-bang of a T-20 match (DJs. dancers, music etc). We were seated not very far from the commentary box and the view of the pitch and batsmen was close enough and the weather initially was good.

A welcome break to the match viewing (just as the weather got really hot, and Rahul 'The Wall' Dravid started to make the match boring), was the Intel 'Toungue Twister challenge. A television crew from Neosports which is running a promo for Intel spotted our group and called us in for the contest. Perhaps they chose us since were the only few in the crowd, not salivating at the sight of the actress Priyamani, who was seated in the box directly behind us. Such 'segmentation' could be topic of another post!

They made us sign 'waiver of rights' forms for the video shoots they were about to take - very professional indeed. The anchor walked in - dressed in all red and black. Thanks to the show i was able to discover a talent in me - that of reeling out tongue twisters. We were given three tongue twisters, in increasing order of difficulty (starting with "Fast faster fastest Smartest Smarter Smart"). I managed to reel them out and the prize was free tickets to the remaining two days of the test match. Good fun, and i tried some with my daughter when i was back home (say "English engine" ten times)!

Go for the difficult option

Love this gem from Paul Graham:

Use difficulty as a guide not just in selecting the overall aim of your company, but also at decision points along the way. At Viaweb one of our rules of thumb was run upstairs. Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase. Do you go up or down? I say up. The bully can probably run downstairs as fast as you can. Going upstairs his bulk will be more of a disadvantage. Running upstairs is hard for you but even harder for him.

What this meant in practice was that we deliberately sought hard problems. If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we'd always take the harder one. Not just because it was more valuable, but because it was harder. We delighted in forcing bigger, slower competitors to follow us over difficult ground. Like guerillas, startups prefer the difficult terrain of the mountains, where the troops of the central government can't follow. I can remember times when we were just exhausted after wrestling all day with some horrible technical problem. And I'd be delighted, because something that was hard for us would be impossible for our competitors.

Here, as so often, the best defense is a good offense. If you can develop technology that's simply too hard for competitors to duplicate, you don't need to rely on other defenses. Start by picking a hard problem, and then at every decision point, take the harder choice.

This is a good plan for life in general. If you have two choices, choose the harder. If you're trying to decide whether to go out running or sit home and watch TV, go running. Probably the reason this trick works so well is that when you have two choices and one is harder, the only reason you're even considering the other is laziness. You know in the back of your mind what's the right thing to do, and this trick merely forces you to acknowledge it.

 

Full piece at http://paulgraham.com/wealth.html 

What Will Revitalize Education in India

None would disagree that education is the key to progress, be it for an individual and for a nation. Obama's speeches and Tom Friedman's columns harp on this all the time. Many youngsters (i know one personally) are quitting lucrative corporate careers to pitch in and revitalise the state of education in India. There are many NGOs active - Azim Premji's foundation, Pratham, Teach for India etc.

The hardened political establishment doesn't inspire much on how the education sector can be reformed. I tend to believe that charity and mere volunteering will not change things. The corrupt will continue to divert funds menat for education, unless there is reform in the system and people start demanding for more. Fortunately there are some trends that could engender a tipping point.

There are 650 million mobile phones in India now, a huge number. The price of handsets is steadily dropping and now there are now mass-smartphones in the $100 price range, powered by Android. This with the upcoming 3G network launches by many telecom companies will usher in the era of rich content on a simple mobile device.

The applications and implications of this could be far reaching; classrooms in remote areas could easily stream in lectures and experiments by the best teachers around the world. This without installing costly computers that are also come with maintenance costs. Imagine the experience with a cheaper iPad like Indian device! The form factor and the content could easily beat the One Laptop Per Child device which was started with an aim to help education in poor countries. The net impact will be people demanding quality education right on their mobile phone.

Keeping technology aside, if the education establishment were reformed even a wee bit, then the potential impact on the nation will be humongous. If the reform moves towards enabling parents decide the quality of education services that their kids get, then the impact will be dramatic. This could be done by giving the parents vouchers that they then choose to 'spend' on schools and teachers of their choice. The revolutionary impact of Public Delivery System reform in Chattisgarh, where the onus of the delivery was entrusted to the local bodies shows the way. If one can get better and assured delivery of rice and wheat from the government, why not better education?