Sunday, December 17, 2006

India and its People Exports

Our People Count!

By Harish Bijoor

India has exported brawn and brain alike for hundreds of years. Our numbers, in many ways have been our biggest assets. We failed to realize it for many, many years though. We lived within a paradigm of our own creation. A paradigm that got besotted with the short-term issues that plagued our nation at large in the early decades of independence.

The paradigm was a simple and straight-forward one. A paradigm drawn and dictated by the immediate. Our population numbers to begin with were large. Our resources to cater to the needs of this large population were just not enough. What’s more, year after year, the population growth rates that stared back at us were worrisome indeed. We were short in terms of everything but water. There was a shortage of food. A shortage of medicines and a shortage of everything that a growing population would clamor for.

The times have changed. Time to re-draw and stretch the lines of the paradigm we work with. Time to raise a toast and cheer to the growing numbers in our population. Time to explore the wealth represented by the large numbers of people we boast of.

Time to crunch world numbers as well. Time to peek into the crystal ball and look at people-wealth across the nations that will dominate the years and decades ahead of us. Let me start by taking a peek at what our renowned demographer Mr. AR Nanda has to say about it.

According to Mr.Nanda, India is all set to become the world’s youngest nation with the largest workforce in the world by 2020! India will boast of a working population between the age group of 15 and 59 numbering 820 million (up from the current 402 million) by 2020.

Let’s take this number for a start. This simply means that India would boast a surplus working manpower by 2020. Current plans on the anvil within the Indian context will however not have enough jobs to offer within the country. A point to worry?

Not really! Look around at the people-wealth prognosis across the commercial world that beckons us. The US will be very, very short on this count. There will be a shortage of 17 million working people out there! China will be short by 10 million and Japan will scream for 9 million more! Even Soviet Russia will be short by 6 million folk required to run the commerce of the country.

In this prognosis built on the current rate of growth of populations as per country trends, India emerges the only one with the big surplus. This surplus manpower will therefore very reasonably gravitate to these people-short countries, running the enterprise of business and commerce all around. A ready market for 42 million people of working age in just these 4 countries listed as an example!

A History of people export

India has indeed a history of people export. We started with brawn and have moved on to brain. Look keenly at our early years of people export. We have fortunately always had enough people. So many people around that there were not enough jobs for everyone to handle. In the very early years our first people exports started at the end of sending labour out to the plantations of the East and West alike. Look at the populations that moved base into Sri Lanka. Into the terrains of the African continent and into the gut of the plantations of Singapore and Malaysia.

This was the early export of labour form a labour (people) surplus country to a people-short geography like the ones represented by the hostile territory of plantation life in rubber and timber and coffee alike.

The times changed. We still had lots of people to export. In came the need from newer rich economies such as the Middle East and so also the clamor for cheap labour from the thriving economies of Hong Kong and Singapore alike. We exported our skilled labour now. We had climbed a notch higher. The skills we exported were those of the mason, the carpenter and the butcher alike.

The times kept changing. We kept evolving in our response to the people needs all around. The higher skill was in demand. We were just about moving from brawn power to brain power. The doctor was in demand. We educated them out here and exported them. Not at the will and volition of the government as much as at the will and volition of the individual seeking prospects that were monetarily enticing. We exported our doctors to the UK, just as we sent our engineers to the US. The architect and the scientist of many a hue came from India and found herself populating the commercial enterprise of many a nation.

We kept evolving. We kept climbing the ladder till we reached the top. The doctor, the engineer and the teacher (academic gurus of every kind) occupied pedestals in every market we sent them to.

Today, we come a full circle. We still export our folk, but the trend seems to have taken a wee bit of a reverse. What we export today is possibly climbing down the hierarchy. Up the down staircase in many, many ways! These people we ‘export’ actually live in the country but work for the enterprise of many a nation outside the territorial boundaries of India. The BPO revolution as we call it today is an articulation of this trend at large that we live with and thrive in today.

The year is 2005. The year of the BPO challenge at large!

In this piece, I explore the key challenges and issues that face the country at large as we enter the world of the ITEs. An era in which India continues to dominate the space of people surplus solutions. The BPO is one such space. A space progressively getting occupied by the Indian at large, leveraging on the sheer numbers of our people and their educational levels, which are looking all the more exciting a reserve than we ever imagined it to be.

The BPO Revolution

The BPO revolution that has hit the shores of India is throwing up its own set of challenges. Internal and external. The buzz in the metros of Delhi-Noida-Gurgaon (should we not fuse the three?), Bangalore, Mumbai, Hyderabad, Chennai, Pune and a Kolkata in that order, is palpable. It cuts through thick. These early adopter BPO towns are islands of early prosperity that stand out like sore thumbs in the Indian landscape.

In an economy that has seen the services sector as the fastest growing of them all in recent times, the ITES segment contributes a brisk number. An interesting number of new jobs being created all the time and with it an interesting set of issues that stare back at us.

Even as the hue and cry on Outsourcing is dying out in the US and UK, there are interesting challenges that stare back at the industry and the people it employs. I peek at a few of these challenges. Only a few!

1. This completely foreign and alien business of BPO:

The BPO industry is completely extrinsic to country in its focus. Literally all of the business that is catered to out of the hubs of a Domlur or a Gurgaon or whatever, is all about businesses that seek the foreign accent at play. India is not a point of focus at all. ITES is all about servicing the outsider out of a cheaper-labor location. Enter any BPO outfit. The English is accented. The dress is getting more and more accented as well. The BPO outfit in the country might as well be territorial outposts of the foreign land being serviced.

Business is tough. A business that focuses completely on the export market is a business that is at the mercy of the volatile international environment in this commodity space of low-tech BPO! The barriers to entry in this business are going lower and lower and the success of the early settlers is creating a whole mass of salivating folks who are just wanting to do the same. BPO is commodity!

2. Price goes down and cost goes up:

Right at the start of the first trickle in of business in this segment, the early business development folk of the BPO start-ups procured business at prices that were exciting. As the days went by, and as competition within India itself increased, the price pressures started. Add to this the emerging competition from countries such as Vietnam, which wants to clone the Indian BPO experience, and China, Mauritius, Sri Lanka and Namibia, if you please! The price pressures are apparent. Businesses are flowing in at a lower unit price than what the early birds in the game were used to.

At the other end of servicing the business that has been procured, there are cost pressures at play as well. In the early days, the first sets of folk to wear the headset and sit in front of the monitor came in at salaries that were even as low as Rs.4,000 a month. Today, the same job goes at 12,000! There is a heady upswing in salaries in the segment.

There is certainly margin pressure at play. Peek keenly at the financials of many an enterprise in the game, and there seems to be a yen to look at the volume of business and ignore the margin-trends at play. Many a player seems to be around waiting to be picked up by the big MNC interest at a valuation that will go higher and higher with the brand name at play and the number of seats that accommodate the tired butts of call center operators.

Is there a bust ahead?

Sykes has just cut jobs 50%. Is this the beginning? Is this a bubble?

3. The social tumult:

Now this is something business seldom cares about. Not in India for sure.

Wealth must be created. Money must be made. Economic prosperity must be aimed at. And all this needs to be done keeping in mind the medium and long-term social good in mind.

Watch BPO space. This is space of tumult on that score for sure.

BPO space is completely western space. In India of yore, the son and daughter of an educated man aspired to study. Education has always occupied prime status in the Indian home for boy and girl alike in urban areas, and certainly for the boy child in semi-urban clusters. Saraswathi, the patron goddess of education is a point of worship.

Today, things are a wee bit different. Young folk, all of 18-19 aspire to get a BPO job. Youngsters under the stress of hormonal pressures are keen to get going with the business of making their own money. Truncating education at the Pre-university level is an option today. The BPO provides an option to earn good money at a young age, even without the degrees in hand.

I believe young India is going to get less and less educated. We are going to clone the US model here. Urban young education is on a decline. When the opportunity to earn without the requisite degrees in hand were not there, by default, education happened. Today, it will not.

The BPO enterprise is a specialist skill of low value. India is building an army of inadequately educated telephone operators. Till the business flows in, this is fine. God forbid! If and when it stops, there will be tumult. What will we do with two million, single-skilled, highly accented and inadequately educated telephone operators in this country? And that too folk used to an aberrantly high monthly income!

Add to this dilemma of the years ahead, a dilemma of today itself. Young folk are following an exciting lifestyle at a very very young age. This is fast-tracked by money in the hands and the freedom of a working person. Add to it night-time work, the ennui of a boring job and the proximity of the two sexes in a happening fun environment!

Sexual harassment at the workplace is old hat. Today no one is harassed. Today, everything is consensual. Sex is discovered earlier than before and promiscuity happens young! A Surya Ramamurthy is a Sue and a Sampath Krishnan from Adyar is an easy Sam!

The roads that lead to the BPO hubs of the day are a hell to traverse physically. The Toyota Qualis revolution is also here. Drivers are in big demand as well. Most drivers work 18 hour driving days and nights. And no one bothers. There is prosperity all around.

People living outside of the BPO island smirk at the sector. BPO is today a sub-culture in itself! Spot a BPO-type, and you will recognize him and her instantly!

The societal challenge remains as well!

Many more challenges ahead….but this time round, there is space for just this much! Till then, let prosperity prevail!

The author is a brand-domain specialist and CEO, Harish Bijoor Consults Inc, a private-label consulting outfit with a presence in the markets of Hong Kong, UK, and the Indian sub-continent.



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