G Krishna Kumar, Jul 11 2017, 0:03 IST
A recent news report indicating grim outlook for the Indian information technology industry this year, adds to the negative news flow on the industry. This comes in the backdrop of reports suggesting that one lakh IT employees could be laid off. “Uberisation” (a new term coined to indicate freelance work as opposed to permanent jobs) of workforce has just added to the anxiety amongst the techies.
Despite the current turmoil, IT jobs are still the most sought after. The IT industry provides employment to 40 lakh people, or 5-6% of the organised workforce. It also provides indirect employment to about 1.4 crore people.
The layoffs are attributed to the possible reduction in IT outsourcing and the need for highly productive work force (weaker hands fall aside). Further, the threat of automation (robots taking over jobs, leaving many people jobless) just adds to the uncertainty.
Also, the challenge faced by IT companies to remain profitable, where the average salary has gone up by two to 2.5 times over the past 15 years. However, the revenue that the organisation generates per engineer has remained constant or in most cases has dropped over 25% during this period adding to the woes of the industry.
The IT industry had witnessed two major downturns in the past — the dot com bubble of 2000-01 and the global recession of 2008-09. Will 2017-18 be the next major downturn? May be it is a sheer coincidence that every eighth year the industry witnesses a downturn.
The good news is that in both the previous two cases, the sector demonstrated resolve and grew post the event. Incidentally, IT Minister Ravishankar Prasad has categorically denied any IT downturn now and predicted an addition of three million workforce into the industry over the next five years.
With the fast-changing technology landscape, employees can become redundant rather quickly if they don’t reskill themselves. But then, reskilling is not new to the Indian IT industry. During 1998-99, thousands of people trained themselves on Y2K, and post 2000-01 the same set of people learnt and adapted to newer technologies.
Over the past few years, easy access to broadband internet coupled with the availability of online platforms for learning like online video tutorials, the MOOC (Massive Open Online Courses), mobile apps etc, has definitely helped the motivated and self-driven employees to reskill themselves.
Over the past 1-2 years, many companies have undertaken large scale re-skilling efforts to ensure the employees stay relevant. A report from the IT industry body Nasscom indicated that 40% of India’s IT work force must reskill themselves. It has also identified 55 new job roles across various technologies. It is predicted that 50-60% of the skills will be around the new technology areas.
It is not just about reskilling, the need for competent and highly productive people is even more important now as the knowledge level required is high in order to meet the customers’ time-to-market requirements and to drive innovation. A highly productive team would mean fewer people and faster completion of tasks.
Over the past 15 years, software automation has helped in improving efficiency, especially in the areas of software testing. Availability of productivity/collaboration platforms is allowing people to work from remote locations. Here, uberisation can play an important role by addressing the supply of expertise just-in-time. However, this needs maturity from the organisation as well as the freelance experts.
While the IT industry finds its way through reskilling and uberisation, we have a problem with the talent pool from engineering colleges. Sample this: 3,000 engineering colleges, eight lakh students passing out every year, 55% of the students aspiring for software employment while only 3% of them are ready for such jobs.
Mindless mushrooming of engineering colleges over the past 15-20 years piggybacking on the IT industry has resulted in a near catastrophe in terms of quality of engineering graduates. The Ministry of Human Resource Development should tighten entry criteria for students entering into the engineering stream while some serious action is needed to upgrade the infrastructure and teaching staff in the colleges.
The other area of focus should be on industry exposure to the students. We need a sustainable model that can encourage industry-academia co-working and can add value to the students.
Alternative industry
India’s over-dependence on the IT sector for employment generation must stop. The biggest challenge is that we don’t have an alternative industry that can offer employment to a large pool of people.
While we are proud of the demographic dividend, with India set to become the youngest country by 2020 with an average age of 29, job creation is going to be the biggest challenge for the country. We need alternative industries, be in manufacturing, infrastructure or agriculture to pick up and thereby enable large scale employment.
In addition, to benefit from demographic dividend, encouraging entrepreneurship is much needed. In advanced countries, it is established that entrepreneurship has a strong correlation with job creation. Entrepreneurship is still a developing theme in India. Many educational institutions have started entrepreneurship cells or E-cells to inspire students, but the success rate has been patchy.
The National Entrepreneurship Network is supporting the Pradhan Mantri Yuva (Yuva Udyamita Vikas Abhiyan) Yojana under the Ministry of Skill Development and Entrepreneurship for formally teaching entrepreneurship. The government’s Mudra scheme for encouraging entrepreneurs has resulted in over seven crore people getting loans totalling 3.2 lakh crore. This is a step in the right direction but awareness campaigns on the employment generated through this scheme is needed to attract youngsters to embrace entrepreneurship.
While the IT industry is attempting to come out of the current turmoil, we need a robust ecosystem that goes beyond IT if India has to benefit from demographic dividend.
(The writer is Adviser, Centre for Educational and Social Studies, Bengaluru)
A recent news report indicating grim outlook for the Indian information technology industry this year, adds to the negative news flow on the industry. This comes in the backdrop of reports suggesting that one lakh IT employees could be laid off. “Uberisation” (a new term coined to indicate freelance work as opposed to permanent jobs) of workforce has just added to the anxiety amongst the techies.
Despite the current turmoil, IT jobs are still the most sought after. The IT industry provides employment to 40 lakh people, or 5-6% of the organised workforce. It also provides indirect employment to about 1.4 crore people.
The layoffs are attributed to the possible reduction in IT outsourcing and the need for highly productive work force (weaker hands fall aside). Further, the threat of automation (robots taking over jobs, leaving many people jobless) just adds to the uncertainty.
Also, the challenge faced by IT companies to remain profitable, where the average salary has gone up by two to 2.5 times over the past 15 years. However, the revenue that the organisation generates per engineer has remained constant or in most cases has dropped over 25% during this period adding to the woes of the industry.
The IT industry had witnessed two major downturns in the past — the dot com bubble of 2000-01 and the global recession of 2008-09. Will 2017-18 be the next major downturn? May be it is a sheer coincidence that every eighth year the industry witnesses a downturn.
The good news is that in both the previous two cases, the sector demonstrated resolve and grew post the event. Incidentally, IT Minister Ravishankar Prasad has categorically denied any IT downturn now and predicted an addition of three million workforce into the industry over the next five years.
With the fast-changing technology landscape, employees can become redundant rather quickly if they don’t reskill themselves. But then, reskilling is not new to the Indian IT industry. During 1998-99, thousands of people trained themselves on Y2K, and post 2000-01 the same set of people learnt and adapted to newer technologies.
Over the past few years, easy access to broadband internet coupled with the availability of online platforms for learning like online video tutorials, the MOOC (Massive Open Online Courses), mobile apps etc, has definitely helped the motivated and self-driven employees to reskill themselves.
Over the past 1-2 years, many companies have undertaken large scale re-skilling efforts to ensure the employees stay relevant. A report from the IT industry body Nasscom indicated that 40% of India’s IT work force must reskill themselves. It has also identified 55 new job roles across various technologies. It is predicted that 50-60% of the skills will be around the new technology areas.
It is not just about reskilling, the need for competent and highly productive people is even more important now as the knowledge level required is high in order to meet the customers’ time-to-market requirements and to drive innovation. A highly productive team would mean fewer people and faster completion of tasks.
Over the past 15 years, software automation has helped in improving efficiency, especially in the areas of software testing. Availability of productivity/collaboration platforms is allowing people to work from remote locations. Here, uberisation can play an important role by addressing the supply of expertise just-in-time. However, this needs maturity from the organisation as well as the freelance experts.
While the IT industry finds its way through reskilling and uberisation, we have a problem with the talent pool from engineering colleges. Sample this: 3,000 engineering colleges, eight lakh students passing out every year, 55% of the students aspiring for software employment while only 3% of them are ready for such jobs.
Mindless mushrooming of engineering colleges over the past 15-20 years piggybacking on the IT industry has resulted in a near catastrophe in terms of quality of engineering graduates. The Ministry of Human Resource Development should tighten entry criteria for students entering into the engineering stream while some serious action is needed to upgrade the infrastructure and teaching staff in the colleges.
The other area of focus should be on industry exposure to the students. We need a sustainable model that can encourage industry-academia co-working and can add value to the students.
Alternative industry
India’s over-dependence on the IT sector for employment generation must stop. The biggest challenge is that we don’t have an alternative industry that can offer employment to a large pool of people.
While we are proud of the demographic dividend, with India set to become the youngest country by 2020 with an average age of 29, job creation is going to be the biggest challenge for the country. We need alternative industries, be in manufacturing, infrastructure or agriculture to pick up and thereby enable large scale employment.
In addition, to benefit from demographic dividend, encouraging entrepreneurship is much needed. In advanced countries, it is established that entrepreneurship has a strong correlation with job creation. Entrepreneurship is still a developing theme in India. Many educational institutions have started entrepreneurship cells or E-cells to inspire students, but the success rate has been patchy.
The National Entrepreneurship Network is supporting the Pradhan Mantri Yuva (Yuva Udyamita Vikas Abhiyan) Yojana under the Ministry of Skill Development and Entrepreneurship for formally teaching entrepreneurship. The government’s Mudra scheme for encouraging entrepreneurs has resulted in over seven crore people getting loans totalling 3.2 lakh crore. This is a step in the right direction but awareness campaigns on the employment generated through this scheme is needed to attract youngsters to embrace entrepreneurship.
While the IT industry is attempting to come out of the current turmoil, we need a robust ecosystem that goes beyond IT if India has to benefit from demographic dividend.
(The writer is Adviser, Centre for Educational and Social Studies, Bengaluru)
