The spectre that has always threatened to spoil the Indian IT and BPO party has been that of economic and social protectionism in the key Western markets which deliver over 80% of the revenues for the exports industry. At a time when the economic recovery in the US is being shaken by the unpredictable impact of the Gulf Coast oil spill and the prospects of a continuing sluggishness in UK and Europe with the Greek crisis still to be resolved worries all economic planners, it is difficult to argue passionately for the virtues of free trade over economic nationalism. We have to avoid getting carried away by the hubris of our own industry?s double digit growth projections for the present fiscal year and stay watchful for global trends in the coming months.
The Economist magazine in an incisive analysis of America?s labour market, has pointed out that the empirically regular correlation between GDP growth and job creation has been defied by the current recession and recovery. The first phase of rapid decline in the second half of 2008 brought about rapid job losses and while layoff rates peaked and then declined in the first half of 2009, firms evinced little interest in hiring. The surprising reality has been that in the recovery which commenced in the latter half of 2009, there did not appear to be any great urgency on the part of employers to dip into the huge talent pool and create jobs at a rapid clip. The worrisome data of 15 million Americans out of work and an unemployment rate that continues to hover around the 10% mark is symptomatic of a larger malaise that pervades all economies.
The concern for the Indian IT sector will be the nature and extent of the response that policy makers mindful of the sentiments of their voters will come up with?in enacting legislation that makes both outsourcing of work to overseas locations and free movement of people across country barriers difficult or even impossible. Over the last two election campaigns in the US, we have seen the anti outsourcing rhetoric erupt only to subside in the face of the globalisation imperative for most large corporations, but the alignment of objectives between Indian and foreign corporations seeking to do work where it makes sense and enabling the best skilled engineers to find jobs all over the world might come under threat if there are moves to limit the percentage of foreign workers that companies could use.
While the stimulus packages in the US, UK, China and even our own country?s NREGA initiative might have propped up job creation to some extent, it is important to consider how jobless economic recoveries can be avoided and the vast entrepreneurial surplus in both developed and developing nations can be harnessed to build more productive societies and nations. The solution of course, in
India as well as in the countries we seek to serve is a broad basing of the skills development initiatives to ensure that the entrepreneurial surplus truly becomes a talent dividend rather than an albatross around the neck of social planners.
In the US, the rapid decline of home prices has made it difficult for displaced workers to move to other parts of the country where their skills may be more in demand, but in our country, a mobile population will gravitate towards the magnet cities to find rewards for their talents while the less fortunate will be left behind and perpetuate the digital divide that is already in evidence. No wonder then that the unfortunate reality persists of over 95% of software and BPO exports being concentrated in seven Indian cities.
J&K chief minister Omar Abdullah and the University of Srinagar have embarked on a skills development mission for youth in key services segments, seeking not just to make a few thousand young Kashmiris employable, but eventually to create a talent pool that will encourage industry to invest in the State, and many more such skill building initiatives are required?in all the North East states and even in the Hindi heartland of our country to enable employment potential to overcome the Maoist and Naxalite movements and many other disturbing trends that can only be arrested by generating employment for the youth.
A state wide or nation-wide skills building programme is never easy to conceptualise or implement but this is one imperative that has to be addressed through a judicious mix of public and private initiatives, classroom teaching and technology enabled learning mechanisms and the unleashing of various funding sources?from governments to Universities to industry scholarships till such time that the prospects of jobs encourages families to invest in worthwhile skills development programs that generate employability. It is futile to blame the colleges of today for their inability to produce the right talent for industry. Rather it may be worthwhile for all thinkers and doers to come together for a worthwhile cause? skilled societies, capable of filling existing jobs and creating new ones are the only solution and it will need a determined effort in all countries to make that happen!