What India should do with it’s demographic dividends? Youth in India and future courses

What happens when a country has half of the population as ‘youth’ and other half still aspires to remain ‘young’ (by wearing denim and shorts, eating pizza, visiting Comic Con, playing with X box and getting addicted to Facebook)? The demographic dividend sounds ‘cute’ and promising indeed, but the real picture might be scary, unless attended immediately.

In 2011 Havard review stated “Although the Indian economy has grown robustly in recent years, many Indians continue to be engaged in farming and the unorganized, low-wage services sector with poor working conditions. Higher education enrollment has grown more than seven percent per year recently, but the problem of graduate unemployment has worsened. The relatively small number of decent jobs created by the expanding information technology (IT) services and business-processing sectors masks the grim realities of high educated youth unemployment. Though IT spinoffs and growth have created jobs in sectors like real estate, infrastructure, financial services, retail, and textiles, such sectors now require a different sort of skilled manpower: not necessarily college graduates, but mostly people with basic or intermediate skills. The country’s education and training system is ill-equipped to cater to this demand.” 

The truth has worsened after that. The educated youth are forced to take up works that neither requires brain nor involves any creative ideation. The Economist recently wrote “set alongside other fast-emerging Asian countries, India has too few of the right sort of firms or workers and too many of the wrong rules. There are certainly some impressive Indian manufacturers, especially in car making. But the likes of Bharat Forge and Mahindra & Mahindra prefer to employ sophisticated machinery rather than abundant labour. At the other end of the spectrum are innumerable tin pot workshops, employing handfuls of people and outdated methods. What India lacks is a Mittelstand of midsized, labour-hungry firms. Even during the boom years, it created many more jobs in construction than in manufacturing. It is hard for India’s young to raise their sights when they are carrying bricks on their heads.” Imagine a generation that’s so used to with multi tasking, fast thinking, lifestyle options and pampered by media lands up in a job that certainly doesn’t need brain but mechanical works (which easily can be executed by a machine).

Moreover, the socio economic power is misbalanced and not even equally distributed in parts of the country (even among cities). Interestingly, In 1757, just before the beginning of the British military occupation, India’s shareof world manufacturing was 24.5 percent while the share of Europe and the United States combined was 21.4 percent. India was the world’s largest exporter of manufactured goods, and it had developed advanced crucible steel (wootz), shipping, and textile industries that were developed after decades of experimentation. Half of India’s agriculture output was surplus. Although this prosperous India was not egalitarian with its feudal polity, caste system, and apartheid against the Dalits, there is no evidence of large-scale extreme poverty. The whole scenario changed after occupation. and recently, the power is clustered among lucky few.

Along with other industries, the service industry is also slugging off . The India Today magazine wrote “… call centre culture, that mushroomed in Indian cities like Bangalore, Mumbai, Gurgaon and Pune in the early 2000s, is dying a slow death. After a boom in the 2004-06 period, which saw business margins, a measure of a company's profitability, as high as 40 per cent of total revenue, the sector has slowed down to modest margins of 15 per cent of revenue. Many Indian bpo companies have scaled down their 'voice' business by as much as 60 per cent. Others have shifted their English language call centres, servicing US clients, to countries such as the Philippines, Malaysia and China. Almost all of them have turned focus to more value-added 'non-voice' work that includes high-end analytics, it services bundled with BPO, and cloud computing offerings. The industry likes to call this a transformation for the better, but it is painful for the thousands of young people without job prospects… In the last five years, India has lost one million jobs in the customer contact business to countries like the Philippines," says T.V. Mohandas Pai, former director of human resources at Infosys Technologies, which started a BPO arm in 2002 in Bangalore. For a sector that employs 1.98 million directly and 7.5 million by indirect means like those providing transport and security services, the loss is significant. This has had an impact on the combined IT-BPO space too, whose growth slowed to just 6 per cent in 2009-10. Although it recovered to 10.9 per cent growth last year, it is still a far cry from the 30 per cent-plus growth in the pre-Lehman Brothers collapse days… "India as a delivery location is still challenged by English being spoken with strong accents, which can sometimes be hard to understand," says Cathy Tornbohm, vice-president, BPO research, at Gartner, based in the UK. Countries like the Philippines, on the other hand, have had a history of cultural exchanges with the US and are becoming a better choice for call centre operations, despite high staff cost. While an entry level BPO worker in an international call centre in India would earn Rs.17,000 to Rs.18,000 a month, a Filipino worker would get 15 per cent higher. At team leader levels, comparative salaries would be 20-25 per cent more in that country, and at senior management levels, as much as 50 per cent higher. "Each country has its own location-specific differentiators," says Keshav R. Murugesh, Group CEO, wns, a bpo firm based in Mumbai. In the last two years, India has lost 75,000 jobs in the BPO space to the Philippines alone…. Pradeep Udhas, head of IT-ITes at KPMG in India, says that rising wage inflation, declining quality of the talent pool and rising infrastructure cost have dimmed the lure of India as a bpo destination. "If the trend continues, it can have a massive impact on those employed in the sector, as well as people who see the BPO industry as a future employer," he adds. Recent reports say Vodafone is shifting 750 call centre jobs from Mumbai to Kingston in Australia, the largest BPO market in the Asia-Pacific….”

The experts across the world suggested Indian govt. to focus on manufacturing based industry rather than service industries.  But, in my opinion, the problem lies at a different sphere. It’s the Mindset of people that has to be mutated. We, being Indian were strategically educated to become excellent servers (by the colonial education system), which unfortunately being carried on by the post-independence government and the encouragement for entrepreneurship was minimal. The strength of India lies in its diversity. And the youth should be educated to think ‘out of the box’ to ideate, conceptualize and start their own. The micro and medium scale enterprises should be encouraged.  India can be an excellent ground for all R&D of the world. A low cost talent pool to think diversely, finding solutions of existing problems etc. Remember, we are the country famous for its “Jugad” and DIY inertia (even among the grass roots). Unfortunately, the premier institutions are spending peanuts in research and creativity.

Internationally, with all the chest-thumping in India about being premier, IITs  (Indian Institute of Technology) don't figure in the list of top 200 universities in the world. As per QS World University Ranking 2012/13, which evaluates 700 universities in the world, the best rank was of IIT Delhi at 212! Bombay (227), Kanpur (278), Madras (312) and Kharagpur (349) followed. The National University of Singapore was ranked 25th, Hong Kong University of Science (which started much later than IIT) was ranked 33rd and Nanyang 47th. (data source Business Today May 12th 2013). 

The IITs were supposed to lead the nation in R&D by focusing on ways to build a prosperous India by raising the incomes of the poor. And they were supposed to educate PhD students who would lead R&D in India’s industries and serve on the faculties of India’s other technical institutions. The IITs would thus have created a multiplier effect and a culture of innovation throughout the country. Despite the kudos showered on the IITs’ undergraduate education and the ensuing euphoria, none of the IITs rank in the top 100 institutions in the world in research based on any measure, and IIT professors and graduates hold few significant patents in India. MIT’s annual research output dwarfs that of all the IITs combined. Most of India’s public- and private-sector organizations continue to rely on off-the-shelf technologies.Nor are the IITs graduating enough PhD students to meet the faculty needs of their sister IITs and other engineering colleges and technical institutions, let alone create a national culture of innovation. About 25 percent of the faculty positions in the IITs and 50 percent of the faculty positions in other engineering colleges remain vacant. Several IIT professors reported that they were unable to attract students with high academic credentials for postgraduate work and that those who get their undergraduate degrees from the IITs almost never pursue postgraduate engineering degrees in India.

Had the IITs followed their original mission and had their work raised the productivity of the adults in the 77 percent of the population that are unorganized laborers to even half of the level of the leading industrialized countries with improvements in products, processes, and infrastructure, supported by education and training, India’s gross national product would have increased over ten times. This goal was central to the IITs’ mission of creating a prosperous nation.

Something has to be done fast and effectively before the educated youth gets frustrated and takes different path to protest, propagate terrorism, brain drain.