Indians Are Coming! Leveraging Looming Global Skills Shortage
“The country that doesn’t create children is destined to die.” Matteo Salvini, former Italian deputy prime minister.
Today, talent-driven innovation drives the economic engine of the global economy. The population of the G-8 which has driven industrial power in the 21st century is declining. This has caused worry among the leaders of these countries that unless they have a larger share of the working population in their demographics, their innovation-based economies will lose their competitiveness.
A recent article in TIME magazine by Parag Khanna, a geopolitics & globalisation expert and author of award-winning book MOVE: Where People Are Going for a Better Future talks of the global war for talent shortage, which will shape the world. The economic success of the United States, to a substantial extent, has been the result of large-scale immigration over the past 100 years. As the TIME article states, “As birth rates decline and the workforce ages, economic success will hinge on whether governments are able to recruit a share of the finite pool of mobile youth to their country.” Besides a shortage of revenue-generating population, the countries will be increasingly left with an older resource-soaking population.
Japan’s population is ageing fastest. More than a third of its population will be over 65 years old in 2030. Germany, Italy, and many other European countries have similar demographic profiles. Between 2021 and 2052, India is likely to have the highest share in terms of the working-age population. Coupled with the country’s large educational infrastructure, there is no doubt that India can export the maximum skilled professionals abroad. There is even a shortage of half million truck drivers in Europe and hundreds of Indian drivers have already been recruited by Hungary. Therefore, the country can expect rich hauling of rising remittances, much more than the current remittances of $100 billion. The only drawback is poor state of our educational system.
Technology is at the centre of a company’s and the nation’s competitiveness, propelling business performance, and improving people’s lives. Those countries at the forefront of technology such as Japan, South Korea, Taiwan, Germany, US, Canada etc. will be wooing the talent from throughout the world. Countries like Finland, Denmark, Sweden, Spain, Ireland, and Portugal are relaxing rules to attract more skilled workers. China is also ageing and cannot contribute to ease the world’s skills shortage.
In every VUCA (Volatile, Uncertain, Complex, Ambiguous) event, an opportunity is hidden and so is in this looming talent shortage.
According to a report “Global Talent Crunch” by Korn Ferry an internationally acknowledged staffing firm, in 12 years, demand for skilled talent will surpass supply with a global talent shortage of more than 85 million workers. This deficit is due to the gap between technological advances and the talent needed to leverage those advances. Africa can also supply young workforce in millions but its ability to generate educated & skilled people is limited by poor educational infrastructure.
It should also be noted that that innovation-driven economies need not only highly skilled migrants but also low-skilled from construction and manufacturing to farming, transport and nursing. Entire industries would halt without low-skilled immigrants. Already many industries such as cheesemaking in Italy is dependent upon labour from Punjab.
Today, Indian immigrants are not only among the most prosperous of the respective countries, but they are also increasingly sending larger remittances compared to the labour class which went to build the Middle East in the past. The country is already facing unemployment and with automation in manufacturing, this will only get worse. The solution is to prepare the students to conquer the world and fill the country’s coffers.
Currently, 800,000 students go abroad for higher studies, every year. According to a Redseer report, by 2026, this number will increase to two million. 70% of these will never return to India but a greater part of their earnings can.
By 2030, this foreign exchange earner can overtake our merchandise exports. The government should draw policies which will enable a larger percentage of the professional population to be trained to accept jobs abroad. The government has already initiated the process for employment in Japan and Germany on a small scale. This should be accelerated for other countries too. This requires not only technical and professional education but also proficiency in English and foreign languages.
The policy makers should look at the following suggestions to make Indian technical & managerial skills to be exported in larger numbers:
1. Establish Special Economic Zones (SEZ) for education where Indian and foreign Universities can open campuses for export of highly skilled professionals. It is a novel concept, which is now being tried in countries like South Korea and United Arab Emirates (UAE). This will also function as a catalyst for overall improvement in Indian educational standards at par with the best in the world.
2. Facilitate greater number of examination bodies in India such as Institute of Chartered Accountants of India (ICAI) to sign mutual recognition agreements with their foreign counterparts. Encourage & facilitate The Association to Advance Collegiate Schools of Business (AACSB) accreditation of business schools for business & accounting education. At present, 21 business schools have gained this accreditation. Other similar accreditations are EQUIS and AMBA.
3. Facilitate foreign language and culture sensitisation courses in Indian schools of higher learning.
4. Make ITIs and Polytechnics world-class. Many jobs will be created for these skills. In addition, open more Teachers Training Colleges to reduce number of teacher shortages in intermediate institutions.
5. It is not only that Indians will move abroad but, because of global skills shortage, increasingly greater number of companies will establish their knowledge outsourcing centres in India. According to a NASSCOM report, India will have 1900-2000+ Global Capability Centres (GCC) in India compared about 1450 today with employment of 1.8-2 Mn+ in FY2025. Many companies such as Pfizer are increasing their R&D spend in India and this trend will only accelerate. More than 70% of life sciences CEOs report difficulty recruiting talent with the skills they need.
As the climate change puts question mark on our export of agricultural commodities while a host of issues including near & back-shoring affect our garment exports we need a new source of foreign exchange earning to take their place. Greater number of skilled and trained Indian abroad would not only send a significant amount of foreign exchange but in times to come, they would also actively participate in the host country’s political and cultural life, bringing greater influence and fame to India’s shores.
