Looking Beyond the Billion – The Indian Context

Snapshot

• Demographics

• Talent Availability Vs Talent Acquisition Myth

• India – Way Forward

Demographics

 

India OverviewPopulation (July 2006 est.) 1,095,351,995

Per Capita Income US$ 800

Per Capita GDP US$ 543

GDP % growth 8.6% Composition of GDP Services : 51.4 %

Industry : 28.1%

Agriculture:20.6% Inflation % (CPI) 4.1 %

Foreign Exchange Reserves US $1,51,622 million

Literacy Total literate Population – 65.38 %

• Female – 54.16 %

• Male – 75.85 %

*Source: Census 2001

India #3 – Agricultural India• 300 M adults• Mostly involved in farming; • 50 M literate; 250 M illiterate• Vote bank of India • Heavy migration towards urban regions

India #1 – Educated India• 100 M adults • Professionals, Business people, Govt. officers • Mostly based in Urban areas

India #2 – Middle India• 200 M adults• Semi-educated; mostly living in urban areas• Semi-skilled labor; Manufacturing technician; Armed forces; Port workers

India #4 – Young India• 300 M under the age of 18• Youngest country in the world• Have exposure to urban life and education• Huge potential to add to the bank of IT professionals

Multiple Indias

Favorable age split of the population,

60 % of India’s population between the ages 15-59, and more than half below the age of 25

In contrast, countries including the US, Europe, Japan and China have a more aged population with dependency ratios likely to increase over the same period

Potential surplus population in working age group (2020)

Global Labour Shortages & Supply Sources

Note: Potential surplus is calculated keeping the ratio of working population (age group 15 – 59) to total population constant; Source: U.S. Bureau of the Census International Data Base; BCG Analysis

47Mn

19Mn 7

Mn

3Mn

5Mn

3Mn

India

Bangladesh

PakistanIran

Brazil

Mexico(1)

Philippines

5Mn

4MnVietnam

2Mn

Turkey

-10Mn

China

-6Mn

Russia

5Mn

Indonesia

1MnMalaysia

0MnIreland

Israel0Mn

Russia and China will compete in

specific segments

Iraq

2Mn

-1Mn

CzechRepublic

4Mn

Egypt

-17MnUS

-2 MnUK-2 MnItaly

-3 Mn

France

-9 Mn Japan

0

500

1,000

1,500

2,000

2,500

0 5,000 10,000 15,000 20,000 25,000

Make India the largest opportunityEnglish-speaking graduates and postgraduatesThousands PA

Annual wage costsUS$ PA

Ireland

India

Philippines

ChinaMalaysiaMexico

Egypt

Massive skilled labour surplus

U.S.

Caribbean**

Talent Availability vsTalent Acquisition Myth

Despite Academic Infrastructure &....

*According to data released by the Department of Secondary and Higher Education, Ministry of Human Resource Development, and Government Of India

Tier I:6 IITs, 2 IIITs, 6 IIMs, IISc

Tier II:17 RECs, 33 others

Tier III:191 Govt Funded 520 Self Financed

Availability of Hi-Tech students(Source: TaskForce on HRD in IT - Govt. of India, Dec

2000)

As of March 2005

343 institutes of higher education 16,000 collegesEnrollment of 9.3 million441,000 technical graduates2.3 million other graduates 300,000 post-graduates each yearEnglish being the accepted medium of instruction, a large proportion of the graduate pool is proficient in English.

.....Indian Engineering Talent Growth

  2003-04 2004-05 2005-06F 2006-07 F 2007-08 F

No of engineering graduates

316,000 365,000 441,000 501,000 536,000

Degree (four years) 139,000 170,000 222,000 270,000 290,000

Diploma & MCA (three years)

177,000 195,000 219,000 231,000 246,000

*No of IT professionals

179,000 201,000 246,000 280,000 303,000

Engineering IT graduates (degree)

84,000 102,000 133,000 162,000 180,000

Engineering IT graduates (diploma)

95,000 99,000 113,000 118,000 123,000

* IT professionals include Comp Science, Electronic and Telecom professionals.

….Expected Skill & Competency Shortfall

• Number of qualified graduates not keeping pace with booming demand.

• According to Nasscom just one in four of technical professionals possess the skills required for employment, while tech jobs are expected to double to over 2 million by 2010.

• Nasscom projects a shortfall of a half-million tech workers by 2010.

• Availability of Leaders, Managers, Leadership and Management skills being keenly felt

Although India scores high on loyalty….

Low Disloyalty

35

31

35 35

29

202224262830323436

Global Americas Asia Pacific Europe&West Asia

India

Regions

per

cen

tag

e

High Loyalty

44 46 44 43

54

202530354045505560

Global Americas Asia Pacific Europe&West Asia

India

Regions

Employees in India more likely to speak well of their companies and be enthusiastic about their work Employees working for some of the world’s largest corporations are more likely to be ambassadors.

…Attrition rates are high with rates varying from 10% to 60% in Technology and other High Growth Areas

India – The Way Forward

OPPORTUNITIES EVOLVING IN MULTIPLE DOMAINS

Established opportunities

Cust. interaction services

Finance and accounting serv.

Engineering and design services

HR services

Animation

Translation, transcription and localisation

Rapidly evolving opportunities

Latent opportunities

Network consulting and management

Data search, integration and analysis

Market research services

Website services

Remote education

Logistics management

Consulting services

Monitoring services

Legal advice

Distributed product development

Secretarial services

Higher value added, higher complexity

• India Business Entry Strategies to plan & operationalise these factors

• Focus on Transfer of Knowledge Process, Patience in Execution

• Investing in and Building local Leaders and Leadership competencies

• Partnering Universities and Colleges in bridging demand shortfall wrt skills and competencies

• Partnering Local Government and other Industries in evolving sustainable growth

• Cultural Sensitisation of assigned staff

• Remote Management Operationalisation/Optimisation

• Risk Optimisation through Business Continuity planning

• Creative Solutions (like home office etc)

India – The Way Forward

Thank You