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'.

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?

Grid Computing Funda For Education?

Of late, there is a lot getting published on the sad state of Primary Education in India, how neglected it is, yet how it holds the key to India's future growth etc. The Economist argues in its latest lead/cover article that unless major supply side constraints like Primary Education are not solved, increasing demand in the fast growing Indian economy will lead to overheating and even a meltdown.

However what has now set me thinking impromptu is this post by Shekhar Kapur on primary education. How about starting a network that taps the computer that exists in each of our brains. Kind of like the fancied grid-computing concept in computer technology? A grid of people, who will visit villages or slums to teach for half a day on weekends and holidays.

So what do we need to get this going?

• A team of half a dozen dedicated folks interested in teaching part-time.
  
• Algorithms to form virtual classes attaching teachers to specific villages and classes. Meet 'supply' of teachers (time slices) with 'demand' from the needy children leveraging technology.
  
• Course material (follow the 'prescribed syllabus of the regular school' or enhance it) or leverage some of the e-Learning material CDs that are developed
• Ideas on deploying technology (some old computers, some CDs with good material). One could later on leverage satellite communications to download study material real time or have some 'remote classes' during evenings of weekdays.

The IT industry is 1 million strong and using some 'Chinese Math', 1% of this million will mean 10,000 teachers. Even 1% of this 1% ~ about 100 teachers and will take this idea well past its critical mass.