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Tuesday, December 13, 2005

Running out of knowledge workers

The Hindustan Times reports:
India contributes 28 per cent to the total talent pool of knowledge workers in the world. This has helped it corner 65 per cent of the information technology business and 46 per cent of the ITES market. But the greatest challenge staring the software services exports in the face is skill shortage. The country will face a shortage of 500,000 knowledge workers by 2010. The IT services sector will need 150,000 employees while the BPO sector will need 350,000 trained personnel.

According to Nasscom-McKinsey Report 2005, the problem is more of suitability than of availability of labour since India is at the right side of demographic divide. According to the report 2005, “The country will need 2.3 million professionals to meet the $60 billion export revenue target by then. But the present education system will be able to churn out only 7,00,000.

“The country needs to do with higher education what it did with telecom. Deregulate the sector so that some universities are given a deemed university status, allow flexibility in curriculum, funding, and teachers salaries,” says McKinsey & Co partner Noshir Kaka.
Quite. As I'd mentioned here, our strengths are much more suited to labour-intensive manufacture than services exports, and our resources in the latter sector are already being stretched. And Kaka is bang on about the need to reform our education system. More on that some other time.


Cross-posted on The Indian Economy Blog, where comments are open.
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