India: A Services Based Economy
More Kiran Karnik, who as I mentioned in my previous post, was the closing keynote speaker at the Indian Business Conference 2008.
As the former President of Nasscom, Karnik focussed on IT and its benefit to society and also on India’s attempt at shifting from a service based economy toward manufacturing.
India’s GDP: 22% agriculture, 54% services
IT-BPO exports = 40 billion dollars = 5.5% of GDP
Distribution of exports by region: Bangalore 36%, Delhi/Noida/Gurgaon 17%, Mumbai/Pune 15%
How is IT benefiting the Indian society?
* Gender Equality: Young women earning at par with male counterparts.
* Good work ethic: Long working hours in a professional work environment.
* Application towards public service and social causes: NGO emergency services, online payment of bills, online rail reservation, etc.
Total organized labor force in India = 15M; IT accounts for nearly 2M direct jobs, and 7-8M indirect jobs (support/household services).
As a services-based economy, India is losing out on its two competitive advantages:
* Rupee getting stronger against the dollar.
* Wage inflation – salaries rising 15-20% every year.
Problems with the education system in India:
* Individualized – no group projects or class discussions; the only team work is when students decide to collaborate during exams (cheat)!
* Poor talent pool – Only 25% grads are suitable for direct employment, the remaining 75% varying degrees of training.
Photo courtesy: NYTimes.com from a recent article about debt collection services moving to India.
Facebook comments:
Niva on January 15th, 2009
You could have discussed in detail taking any service industry for example – IT industry and talked about the industry getting affected through the slump/meltdown/recession !
That would have been more informatory and useful.