.......................But its
strange;
As oftentimes to win us to our harm.
The Instruments of Darkness tell us
truth;
Win us with honest trifles, to
betray's
In deepest consequence.--
--Banquo in 'Macbeth'.
There is
some turbulence in India's IT sector. The management of all the
giant IT companies are in an unenviable position of having to make
their employees face the facts. If you are discerning, you can read
the tea leaves. One big IT Company did announce to the media that it
is targeting about 25000 associates and that it will be less than
10% of its overall strength. Since there is no advantage in removing
juniors who , as new entrants into the work force, still provide the
edge in labour arbitrage, this 25000 will have to come from middle to
senior levels. If seen in this light, the reduction is not 10%; it
may as well be 25% to 30%! However, it is another matter that the
management has now retracted much of what it said to the media and is
trying to give a different spin. Another Company has identified that
the way forward for them would be to hire more contract workers.
A
complete SWOT analysis of the Indian IT industry will reveal both Opportunities and Threats that the IT companies are facing.. Without
a University system or Government Labs to work with and co-create
value, it has to pull itself by its own shoe strings. This is not
how it is done elsewhere.
Leave
alone new Technology development, even Product development is not
possible under these circumstances. Moving up the value chain is
really difficult. So growth is achieved by increasing numbers (
'linear growth' in management parlance) and playing on labour
arbitrage. Thus the only real strength is the availability of large
number of English speaking labour force from the middle class where
academic pursuit is a core component of the value system.
They used
say this of Tamil TV Channels-- "if you have seen one, you have seen
them all". The same could be said of our big IT companies. Focused
as they are on their keeping-up-with-the-Jones act , trot out
quarter-to-quarter numbers that resemble each others.
The
Indian IT industry knows that labour arbitrage will only go this far
and no further. Hence the moves to trim the expanding middle layers
of the organization and make it more pyramid like than the balloon
shape it has now assumed. This has created a huge furore. IT
workers, in their middle age, with growing children and the ubiquitous EMIs at the beginning of each month, are feeling tight in
their bellies. Many of them have stopped 'learning' long time ago.
They have become managers and have not updated themselves with the
new technologies that are gaining ground. The management has
distributed pink slips and there is widespread anger and dismay from
the unsuspecting middle management who had taken continuity
for granted. The Trade Union commies are salivating at the prospect
of sinking their teeth into a sector where their disruptive value
will be at the maximum. So far IT sector has been a no-go zone for
them. They are crowing “Sangam charanam gachammi” paraphrasing
the Buddhist chant. According to them that one day IT workers will have to
seek refugee in Trade Unions is fully vindicated. Nothing is more disastrous to the Indian IT industry than the entry of Unions. The
Indian IT workers are sure to find their slogans very attractive,
especially when they see that the companies on the one hand
announce large hiring plans also push for lay offs targeting the
middle layer. After all, their fathers and mothers, more likely than
not, come from the much pampered rent-seeking members of the
organized work forces in the Government, Semi-Government and Public
Sector of the country. Till the advent of IT and ITES sectors ,
Indian organized sector employment, could arguably be labelled as
“disguised unemployment”, a pet phrase of our economists of yesteryear when they wanted to describe the phenomenon where 5
people are employed to do the work of 2 people. For the first time,
in post independent India, we saw “undisguised employment” in
Indian IT and ITES sector where you had to work to earn your daily
bread and no fake socialist comrades were around to hold the industry
to ransom and extract concessions to the detriment of larger
interests of employment, equity and wealth generation. We missed the
bus of Industrialization because of these worthies. Even our agriculture has
been rendered uneconomical with continuous fragmentation of land
holding that successive generations have been forced to depend upon.
As an answer to all this self-imposed misery, they want to promote
programs like MNREGA that can even make Sahara run out of sand.
I wish
the younger generation of India, specially those who entered the
workforce post 1995 learn the post-independent economic history of
India. The dalliance with “socialistic pattern of society” and
the free rein given to these 'running dogs' of Soviet and Chinese
imperialism are responsible for why we are still one of the poorest
countries of the world with 700 million poor people still eking out a
meagre existence.
Labour
arbitrage in IT will not take us any further. Countries like Philippines and China are waiting in the wings. China has a superior
University System and with the spread of English, can beat us hollow.
The answer is blowing in the wind; hard work, keeping updated and
delivering value all the time. There is no escaping this fact.
Then how
to reconcile the humane arguments of the middle aged work force in IT
with the existential problem the Indian IT industry. The first step
is for all stake holders, the government, employees and IT companies,
to agree on the problem statement.
Indian IT
has not moved up the value chain. It is also very much dependent
on western countries to give us work and Visas and the only thing on
offer from our side is cheap and dedicated labour. Western nations
equate Visas with immigration, rightly so. As the western nations
reeling under high unemployment for their white collared, the VISA
regimes are bound to become tougher and tougher.
This
means that the linear growth that the industry has been enjoying will
no longer be possible. Value addition has to come from innovation,
innovation with focus on India. IT can be a big boon in administering
this large and diverse country. If you innovate for the sake of
India, you will find application across the Globe. For example, any
IT solution that caters to India's scale and complexity must set us
apart in the world. ISRO has done a better job than the Corporate
sector in this regard. They have proved to the world through
innovation and sheer hard work that they can best the advanced
countries. Corporate leadership should invest in innovation and
refrain from playing to the galleries of stock market sentiments and pink papers.Mr. Vishal Sikka is moving in the direction, more strength to his
hands.
The
Government has to push for broad band connectivity without any second
thoughts. Delivery of Government's services thru the digital medium
holds enormous promise, witness the LPG subsidy targeting using
Aadhar is a case in point.
Lastly,
the IT sector employees have to understand where we stand in our
evolution. We are by no means an IT super power. There can be no
rent-seeking in IT sector. If they do not have the stomach for this
long distance race, the early they quit the better. IT companies for
their part should focus on identifying, preserving and nurturing
talent. I say 'preserving' with a lot of meaning for I have seen lot
of precious talent thrown by the way side, kicked upstairs to become
managers or generally degraded to cultivating connections in the
organization just to cling to the job.
Are Trade
Unions any stakeholders? No, not at all. We have the twin monsters
of pseudo-secularism and pseudo-socialism to slay. Of the two ,
believe me, pseudo-socialism as perpetuated by the leftists and their
Unions is more devious as it dons the garb of equity,being
pro-poor and anti-big guy. They are like carrion eating vultures, waiting for their picking amongst death and destruction.
By giving employment to large number of educated youth, Indian IT given us social stability. IT exports from India are expected to reach 99 billion this year. Imagine the exchange rate of rupee without IT exports last 20 years or so. India would have been running to IMF and seen devaluing its currency many times during this 20 year period. Strange it may seem, this is precisely what these carrion-eaters want. Global IT spend is 3.8 trillion dollars. What is 99 billion against 3.8 trillion ? We are like children collecting shells on the sea shore when the whole deep sea is in front of us ( don't remember whose quotable quote it was!).
It is for the sake of the poor, we should keep
these 'Instruments of Darkness' at bay, for they can win us with
honest trifles, only to betray us in deepest consequence, as the Bard of Avon succinctly put it.