Vviewpoints
DOI: 10.1145/1409360.1409369
emerging Markets
labor supply in the
indian iT industry
Exploring the evolving dynamics and interconnectedness
of India’s educational system and its IT work force.
INDia is a country ofextrem es: for
everything that exists in its socioeconomic structure, there exists
an opposite somewhere close
by. On one hand, the wealthiest
family in India is in the process of building a billion-dollar mansion-house; on
the other, approximately 10 million
families live on government-owned
land in shanties that each cost less than
$100.a Similarly, although the seven
Indian Institutes of Technology (IITs)
produce approximately 4,000 graduates
in engineering and computer science
that are among the best in the world, approximately one-fourth of all high school
graduates who want to pursue engineering or computer science are unable to do
so, primarily because of cost.
iLLus Tra TioN by Eskimo sQuarE
According to research conducted by
global research and analytics firm Evalueserve ( www.evalueserve.com) approximately 85% of the labor supply for the
IT industry (both exports and domestic)
in India is composed of engineers (with
four-year degree courses) and Master of
a All dollar amounts cited in this column are
expressed in U. S. currency.
Computer Applications (MCA) graduates (with five-year degree courses). The
remaining 15% comprises graduates
(both five-year master’s and three-year
bachelor’s) in mathematics, commerce,
and sciences. During 1998 and 2008, after including inflation, the total amount
spent on technical and IT education for
such graduates grew by 17% every year.
Whereas the class of 2004 had approximately 273,300 engineering and MCA
degree graduates, the class of 2008 had
approximately 454,200. During 1998
and 2008, the number of engineering
and MCA graduates grew at an annual
rate of 13.5%. Even if this growth rate
can be maintained, the demand for
such professionals is likely to increase
at an annual rate of 15.5% until 2016 (see
my July column), and hence there would
be a cumulative shortage of 100,000 to
150,000 such graduates by 2016 (where
no such shortage exists today).
The expenditure by the Indian
government on technical and IT education increased from $375 million
in 1996 to $830 million in 2006. Although the Indian government’s overall expenditure grew at an annual rate
of 8.4%, this rate is only half the overall
growth rate of 17% mentioned earlier.
More disconcerting is the fact that the
Indian government’s technical education expenditure as a percentage of total education expenditure decreased
from 4.1% in 1996 to 3.9% in 2006. Furthermore, according to the National
Knowledge Commission ( www.knowl-
edgecommission.gov.in) that advises
the prime minister of India, approximately 75% of the current funds go toward salaries and benefits, 15% toward
rent and utilities, and the remaining
10% are not even sufficient to main-