'Demographic sweet spot to sharpen India's IT edge'

None | ByPrerna K Mishra, New Delhi
Nov 28, 2006 06:39 PM IST

In the next 10 years, India will have a surplus of 47 mn people in the productive age-group, reports Prerna K Mishra.

The past decade of software services and telecom successes in India gave countries like China, Russia and Brazil the aspiration to have a Bangalore. But the good news is that the leadership does not end there.

HT Image
HT Image

In the next ten years, India will have a surplus of 47 million people in the productive age-group vis-à-vis a shortage of about 50 million such workers in the developed world.

This demographic edge will certainly give India a handle to hold the world to its advantage, according to the consensus that emerged at a panel discussion on IT and Telecommunication, held at the WEF in Tuesday.

"We have only touched the tip of the iceberg as the total size of the global opportunity in IT services is $1 trillion. Our exports in 2007 will be about $30 billion which is about three percentage points of the larger potential. So we have only scratched the surface yet."

The salary of a fresh engineer in India is about $8,000 while in US it is between $45,000 and $55,000. Even with 12-14 per cent salary escalation in India vis-à-vis the four per cent in the US, it will take US more than a decade to deplete India's cost advantage as a software and services destination," he added.

With Infosys, TCS and Wipro making it to the top 10 global services companies by market capitalisation, Indian companies are becoming strong contenders for the top five slots.

"Everybody wants to catch up with India because of its IT prowess. The breakthrough for India will come when the access issue is addressed by having broadband connectivity like an electricity and water connection," said BT International (UK) President Francois Barrault.

Commenting on the role of government in taking India to the next level in IT and telecom leadership, NIIT Group Chairman Rajendra S Pawar said: "This is the century of the mind and our population has become an asset. But little can be done with it unless the government steps in to facilitate the entry of the private sector into higher education. Unless this is done, India will have a huge undereducated labour force that can become a liability in the long run."

Pawar underlined the need for the government to limit its exposure to higher education and leave it open for the private sector to fill in the gaps. "There is also a serious need to ease the purchasing norms for the roll out of e-governance infrastructure in India in order to attach value to intangibles. In the absence of this, India will have a sub-standard e-governance delivery model," he added.

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