Essay on the new evolving India by Murari.agarwal1819


									India is evolving from its role as the world's back office into a
knowledge and innovation hub, despite the limitations imposed by the
country's weak infrastructure and antiquated education system. Indian
outsourcers have also evolved into world-class research and development
(R&D) centers.

As a result, the call centre operators in India can now found to be
helping enhance patient care for US hospitals, optimize financial
transactions for Australian banks and streamline parts management for
European engineering firms.

Similarly, the Indian IT companies can be found developing mission-
critical avionics systems, next-generation telecom technologies and
complex medical devices. This is bound to benefit not just India but the
global economy as well.

This is a   far story from about a decade ago, when prominent Indian IT
companies   such as Infosys Technologies Ltd, Tata Consultancy Services Ltd
(TCS) and   Wipro Ltd were bidding for small contracts to help Western
companies   fix the Y2K bug in their computer systems.

Despite severe hesitations, Western companies sent their mission-critical
systems to India for repair as they did not have the manpower or skill to
fix the time ticking bomb.

This opportunity was used by Indian outsourcers to expand operations,
build new skills and, most importantly, get to know their customers.
However, it was not easy as the Indian industry had to hire hundreds of
thousands of engineers at a time when the output of its engineering
colleges was severely limited.

In 1999, India graduated only 76,000 engineers, and most did not receive
high-quality education. The Indian Institutes of Technology (IITs), no
doubt, produce world-class engineers but they graduate less than 5,000
engineers in all every year.

To make matters worse, the advanced types of engineering jobs Indian
companies were bidding for required engineers with Master's and Ph.D. -
level degrees. Anyway, the Indian companies met the challenge head- on
and the Y2K catastrophe was averted.

This benefited both sides. Indian firms used this as a launching pad for
bigger projects and entry into more strategic ventures. This, in turn,
increased the demand for engineers and by 2004 India doubled the number
of graduating engineers it produced in 1999. However, this gave rise to
another problem the number of Ph.D.s was not even enough o staff its
growing universities.

In 2004, India graduated only 17,000 Master's and 900 Ph.D.s in
engineering. This resulted in fierce competition for experienced talent
and caused huge increases in salaries and attrition rates.

For a while, it looked like the Indian outsourcing industry would
implode, like it had just been a flash in the pan. But it was not so. By
2006, India started graduating at around 222,000 engineers. In 2007
itself, India's top five IT companies TCS, Infosys, Wipro, Mahindra
Satyam and HCL added around 120,000 engineers.

Accenture and IBM India Pvt. Ltd added 14,000 each. Thousands of other
smaller companies also expanded and recruited. That is to say, such a
huge number of engineers were absorbed which indicates the extent of
growth of IT companies in India.

It became possible due to the ability of Indian entrepreneurs to overcome
all the hurdles that are thrown at them by the government and the
society. Just as they were figuring out about installing their own power
generators to deal with supply problems and purification plants to
provide clean water, they had to figure out how to build their own
surrogate education system.

And it is here that the Indian companies have made their greatest
innovation, i.e., they have developed the ability to take the output of a
weak education system and turn these workers into R&D specialists who can
compete in the global arena.

In the process, the Indian industry changed the way it recruited,
trained, developed and retained its workforce. It not only adapted the
best practices of companies that were outsourcing R&D to India, but even
started improving on these techniques and methods; refining and
integrating them into a unified system.

It was not an easy task in light of the fact the Indian industry was
faced with severe talent shortages, escalating salaries and a lagging
education system.

The Indian industry, however, made some changes. They started hiring for
competence rather than skill, i.e. ability and aptitude was given
preferred rather than only specialized technical skills. They invested
substantial time, money and effort in providing employee training to
bridge skill gaps. Leading companies mandated that employees receive
between one and three weeks of training every year in areas where they
are weak.

Many companies tied salary increases and promotions to the completion of
such training modules. Most companies also offered extensive management
training, internally and externally, especially through MBA-type
programmes, to meet shortages in managerial talent by building pools of
potential managers internally.

Companies like HCL introduced performance management system which
included parameters like performance, strategic vision, ability to
communicate, problem-solving skills and responsiveness. All these changes
led to the Indian IT firms witnessing one of the lowest attrition rates
in the industry.

It also explains how firms in India are able to hire bright but largely
inexperienced talent to successfully engage in R&D and other innovation.
Even during the economic slowdown, Indian talent supply has been able to
catch up with demand. This has led the Western companies, which are more
desperate than ever to cut costs, to consider outsourcing option to
India. Considering the fact that outsourcing to India can offer them 30
to 40 per cent cost savings, they are now outsourcing their most
strategic internal systems.

In addition, due to a combination of the recession in the US and that
country's flawed immigration policies, a flood of highly educated and
skilled talent is returning home to India. Those who see more opportunity
in India than abroad, and want to be near family and friends, are
returning with the latest skills and an understanding of foreign markets.

Thus, the Indian outsourcing industry is gaining a second wind. If the
process continues, it will not take more than a decade for India to
become the world's second-largest R&D centre after the US.

A new India, symbolized by information technology and its possibilities,
can also be seen evolving in other sectors such as automobiles, chemicals
and telecom. Indeed, innovation has rapidly acquired a status of a
business concept, which is not only allowing previously timorous Indian
firms to go global, but also persuading previously imperious global firms
to move into India.

The journey of India's new approach to innovation has just begun. People
and companies are silently giving India a steely new cutting edge with
its laboratories, offices and minds working to achieve its ever-expanding
ambitions to the personal dreams of those who make it happen.

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