Ready for the Tipping Point?
But is India ready for the big growth that Nasscom is talking about?
It sure has the single largest pool of engineering talent among the emerging countries capable of taking on this kind of work — more than even Russia and China combined — reveals the study. The present graduate talent pool suitable for Engineering Service Outsourcing (ESO) and ITO/BPO work in India represents 28% of the total in low-cost countries. Thanks to the outsourcing boom, it also has extensive experience in forging strong client partnerships; building strong and technically focused organizations; competing in the fast-changing global market and in creating the business model necessary to deliver value to clients anywhere in the world.
However, the two restricting factors could be the further growth of the talent pool and infrastructure.
Currently around 35,000 engineers work in engineering services in India. To take on the kind of growth expected in this market, the number required is a staggering 250,000! Will India be able to produce this kind of talent pool is surely a matter of debate. Out of the approximately 1,400 engineering schools it has, only a handful can be touted as world-class. Also, admissions into these “world-class” institutes like the Indian Institute of Technology or the Regional Engineering colleges are a herculean task.
The other limiting factor — infrastructure — is where China can be serious competitor to India. India has to develop world-class infrastructure in at least five to seven cities to be able to capture the market share estimated. Will the Indian government realize the potential and take immediate action is another debate…. “Today globalization of innovation is being spearheaded by the largest spenders on innovation, in terms of both regions and sectors…. To target the maximum potential revenue of $40 billion by 2020, all important stakeholders including the Government of India, academic institutions, service providers and trade bodies such as Nasscom will need to undertake serious measures,” said B. Ramalinga Raju, Founder and Chairman, Satyam Computer Services and Chairman, Nasscom.
There are a number of low-cost countries that will compete with India sensing the opportunity that ESO offers. These countries are likely to include small countries unfamiliar to players in the BPO markets, such as Nigeria and Vietnam. However, when the battle is for high-end, complex tasks, there could hardly be a threat to India and China, considering the scale they are capable of.
The five key strategies identified by the study for India to realize the opportunity ahead of it include: Building the “Engineered in India” brand; build domain expertise; focus on infrastructure creation; undertake initiatives to improve workforce; leverage local industry “offsets” and align government policies and incentives.
With additional reporting by Imrana Khan
