Decent Work: Concept, Theory and Measurement by Nausheen Nizami & Narayan Prasad

Author:Nausheen Nizami & Narayan Prasad
Language: eng
Format: epub
Publisher: Springer Singapore, Singapore

18.2.5 Issue of Demand-Supply Gap in IT Industry

What are the long-term consequences of the fast changing demand-supply gaps in the labour market and does India’s professionalisation of education lack the ingredients in enabling India earn the demographic dividends? K.G. Radhakrishnan (2005), in his noteworthy article ‘ Some notes on India ’s software manpower strategy’, has identified some various important issues concerning the quality profile of software manpower in India while noting the predominance of low-end custom software activities due to this. He notes that while on one hand the human resource holds the key to India’s dream of turning into an IT software and services superpower, on the other hand, what holds this back is the labour-intensive software services and the major focus on low end of the value chain. The author has drawn attention to few mismatches affecting the growth of IT industry such as (1) mismatch between skill requirement and academic skills (training deficits) and (2) per worker productivity and skill requirement (this is so because per worker productivity varies according to the employee’s skill levels). Moreover, the industry is currently plagued with manpower shortage and job hopping. This is in turn pushing up the salaries in the software industry steadily which may reduce the country’s cost advantage in the long run. Also, the thrust is moving from cost to quality of labour. In the long term, the country will have to compete in quality of service rather than cost of labour. So the Indian companies need to acquire domain expertise through quality manpower. The author has suggested regular updating of curriculum in consultation with industry experts, incentives for research and development and proactive role of the government in the growth of IT industry in order to reap the ‘population opportunities’ which India shall have in the coming years. M.K. Datar (2004), in his article ‘ Human capital approach and Indian labour market: The case of information technology industry’, has studied the likely effects of increased heterogeneity of labour and demand-supply trends arising due to technological changes in the nature and structure of labour market institutions in India . The theoretical understanding of human capital approach (HCA) has been linked with the current labour market of Indian IT industry. The main lessons imbibed from the paper are: Clubbing the technically specialised labour such as doctors, lawyers, chartered accountants and so on into one category (denoted by professional managerial class, i.e. PMC); the author has drawn attention to PMC and questioned its implications for the labour market and their vested interests. Secondly, the author has highlighted a peculiar feature of this knowledge-intensive industry underlining the point that the nature of work is undergoing a drastic shift from high-volume activities to high-value activities. Thirdly, a new perspective of HCA has been discussed and that is from the employer’s side. The returns on human capital from the employer’s side would not only be guided by technological changes, relative cost differential of similar skills in the domestic or overseas market, but also by the exchange rate movements between the two countries.

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