Having just returned from another trip to India we’re as confident as ever in the future of the subcontinent as a major international player in the services area, and are particularly impressed by the advances in private health care.

We were less thrilled, however, by the spiraling costs of doing business in India. This was our fourth trip in 24 months. Over that period of time, hotel prices have increased by more than 25 percent; luxury hotels and restaurants are charging up to $35 for basic entrees and we paid $170 for a boxed lunch for four. With India’s massive hotel shortage, there’s no end in sight to these spiraling costs — American Express predicts that India will see the world’s largest increases in room rates in 2008.

For the business and luxury traveler, India is becoming more expensive than almost any country in the developed world. The customer base for this market is not restricted to westerners. Many Indians traveling for pleasure and business are spending the $500 per night necessary to stay in five-star hotels. As the Indian upper-middle classes swell, a pent up demand for the finer things in life is being satisfied.

Our visit included meetings with several of India’s top surgeons and tours of some of the leading private hospitals. To say we were impressed is an understatement. Visionaries, such as Dr. Shetty of Bangalore’s Narayana Health City opened our eyes to the possibilities of a revolution in the health care sector, not only in India but worldwide. Dr. Chowbey of Delhi’s Sir Ganga Ram Hospital took the time to demonstrate the intense commitment to quality and attention to detail typical of India’s best hospitals. At Max Healthcare in Delhi, we saw a customer-focused mindset beyond anything we’ve experienced in North America. Dr. Shetty and Dr. Trehan of Apollo Healthcare are finding ways to reduce health-care costs, and expanding accessibility to more of the population.

India’s business hotels and private hospitals represent the country’s unfolding economic miracle and demonstrate the quality of life available to its fortunate classes. But the miracle must be expanded to the “other” India — almost 75 percent of its population lives in rural communities that typically have no hospital and vastly inadequate government schools. Yet here is where the youth, representing India’s future, largely resides.

The McKinsey Global Institute has declared that only about 25 percent of Indian university graduates are capable of working in the global economy. In rural India, less than 25 percent can even hope to attain a legitimate primary school education. In many ways, the health-care infrastructure is even worse. Where health care is available in rural India, it is universally inadequate and poorly staffed. New physicians often earn less in a month than a westerner pays for cab fare from Delhi’s airport to one of its five-star hotels.
Solid primary and secondary education, combined with basic but adequate health care and nutrition, are fundamental needs in creating the conditions for India’s youth to drive the nation’s economy to its potential. India’s youth of today must become its talent of tomorrow. The signs of an overtaxed market for skilled workers are already evident in India. In a workshop for HR leaders that we conducted in Mumbai, among the 17 companies represented, more than 150,000 vacancies are outstanding. And Indian firms are beginning to accelerate their recruitment of talent from the west, despite higher wage demands.
While our bets are on India, the world’s largest pool of HR will be economically irrelevant if it remains largely uneducated and unhealthy. 

Lori Blackman is Founder and President, DNL Global, a talent-management solutions provider. Allan Schweyer is President and Executive Director, Human Capital Institute.