Tuesday, January 24, 2012

What after IT growth declines?


The past decade in India has been majorly driven by the growth in IT and ITes. This sector has been the job creator for the last decade especially among the rising number of engineers. The IT companies have been well known to provide jobs to college graduates of any engineering field as long as he/she is able to read and write properly :P. But son a serious note, the majority of the employment generated during the past decade has been in this field. However, the future growth of this sector is not looking that strong, Like everything has an expiry date, even the growth of this sector has been and the growth rate in this sector is now falling. Going by reports of Infosys and some Indian major IT companies, the forecast for the next year is bleak and growth shall be tepid in the future.
Lower growth means less hiring and as a result shall lead to unemployment amongst educated Indians. India desperately needs a new sector where the graduates from colleges can be placed like the IT companies. So, which sector shall replace the IT sector? Where shall majority of employment be generated in the future? I ponder over such questions at times.

The new manufacturing policy announced by GOI seems to be the answer to this. The aim of the policy is to generate 100 million jobs in the next decade. While the intention of the policy seems to be right and also the approach seems right, I doubt whether the target of generating 100 million jobs shall be met.

I think that the following reasons will act as a deterent for youths, specially engineers to join manufacturing:
1. Physically tough conditions - Manufacturing generally involves working in industrial areas under tough physical conditions like noise, vibrations, pollution, etc
2. Shifts in factories - Manufacturing generally is ta 24 x 7 continuous job which might involve working in shifts at factories which acts as a big deterent
3. The missing glamour of IT - Factory life doesn't have glamour of the IT grand offices and involves handling unskilled labour.
4. Outside city limits - Factories are geerally situated in industrial areas outside the cities whereas IT jobs could be in the cities as well.
5. Emergence of higher studies - Due to the emergence of higher education centres for management studies, people shall prefer to join some other sector.

The jump by Indians directly to services bypassing manufacturing initially also is a big factor behind rendering manufacturing sector unattractive as an employment sector for engineering youth.
An article from New York times describes a situation in US about lack of sufficient middle class technical manpower to execute big engineering and logistical projects.


I think a similar threat also exists in India if we do not concentrate on building and harnessing sufficient technical skills in this field.
The rising expectations, the growing impatience of the youth,  the want for easy money wihout toiling hard could also turn youth towards service sector like that in US.

Maybe it is time, we focus on developing technical skills necessary to implement and execute the manufacturing policy.

P.S:- In case any person reading have any idea, kindly let me know why is this blog viewed more in countries like Russia, Canada, Lativa and a host of countries where I know no body. I would like the blog to be read by people rather than BOTS.

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