Sunday, January 29, 2006


Cotton, cars and the BPO/ITES industry

By 2020 India is estimated to have about 40 million people in the working age group as surplus manpower, while the rest of the world will be collectively under a shortage of employable-age workforce. BPO/ITES industry proponents point this out and ask the following questions? What is wrong with providing gainful employment to millions of young men and women, with excellent working conditions, good pay and dignity of labor? What is wrong if India utilises its excess manpower to become the back office for the world? We have already seen outsourcing of activities ranging from data entry, medical transcription, legal paperwork, accounting and audit paperwork. There is even outsourced remote front-office management, where a 'receptionist' sitting in India welcomes visitors to an office in the US and offers a seat, calls up the right person to meet the visitor, and offers some coffee!

Each of these individuals, currently armed with high school certificates, or an undergraduate degree, cannot find jobs that pay as much or provide as much work comforts and even social status. So what is wrong?

Export of raw cotton is a viable business, and could be a profitable business as well. By the late nineteenth century, British India was exporting huge amounts of cotton to be converted into textiles by the flourishing textile industry centered around Manchester, that supplied cotton textiles to the global market. By then, the once thriving textile industry of India, fabled for a thousand years or more was in shambles. Not only did the industry disappear, the fact of such preeminence in cotton and silk textiles that existed in India has itself been forgotten by the collective memories of the people of India. By imposing constraints and taxes on the local textile industry, the British systematically destroyed the local industry, and used the local labor to produce the cotton that powered the industrial revolution.

Instead of exporting cotton, we are now exporting the mental labor of millions of young men and women. instead of being forced by a colonising nation to export cotton, we are voluntarily exporting this mental labor. Just as cotton was cultivated at very low costs with the bulk of the profits of the finished textiles going to the owners of the Manchester factories, the cheap labor of the Indian youngsters is powering the creation and continuation of the lead in technology, and intellectual property of the developed nations. Instead of looking at the long term consequences of a generation of youngsters working cheaply to relieve the drudgery of citizens of another country, the sovereign government of India is quite pleased about the inflow into the exchequer and is happily planning to accelerate this 'positive' development.

The tragic plight of cotton farmers across the country only highlights the misplaced emphasis on the BPO/ITES sector by decision makers in government.

Of course increase in jobs in ITES/BPO sector is a welcome development. For the thousands of youngsters who cannot be employed elsewhere with their useless college degrees, this is a great opportunity for upward mobility. What is unwelcome is for governments to plan for the long term continuity and growth of this segment at the expense of planning for leadership in areas where we are lagging far behind. What is unwelcome is the promotion of these jobs as lifelong career options for youngsters, working on infrastructure to enable these industries to thrive, providing tax sops for outsourcing companies, and similar steps that entrench this as a long term dominant activity.

In contrast to the above, there is an ongoing revolution in the automotive spare parts industry in India, where we are rapidly becoming the suppliers of spare parts to every auto manufacturer in the world. Closely tied to this growth is the increasing presence of Indian made and branded automobiles in the global market. The example of Indian auto manufacturers rapidly rising to meet the global challenge is worthy of emulation by other industries.

Instead of providing incentives for cotton farming and disincentivising textile factories, should it not be our policy to promote textile industry with facilitation for import of cotton? Should we not promote creative entrepreneurship in diverse areas of trade, production and technology that will offer productive, enriching and rewarding employment opportunities to the same thousands of youngsters currently with unemployable degrees? Do we have a government sponsored entrepreneurship zone just like the proposed BPO/ITES technology(?) parks? Should we not have a lobby group that promotes such entrepreneurship in the lines of NASSCOM?

The question is who is setting the lead? Government or the individual?

A case in point is the progress made by the entrepreneurs in the garment export segment in Thirupur.

The success is the result of individual’s attitude and skill. Government’s support is incidental.

Government should have long range planning as suggested...but then the more important aspect is the attitude of people. How did BPO concept came about? Government did not promote it in the first place. Our people preferred this segment compared to taking the risks of being an entrepreneur or a technology leader. And THEN government has started supporting it.

The government can only provide support. The primary lead has to come from the individuals and due to the British Education System we prefer to be slaves (or employees rather than employers.... followers rather than leaders). Government can change this only by moving away from the education system originated by Thomas B. Macaulay.

It is agreed it is wrong to become a BPO center of the world. This has come about because our youth are pulled towards the western material life rather than Indian spiritual life. We need an education system that is centered around our religion. The only long-range plan/ action the government can do is to introduce religion as a compulsory subject starting from LKG as being done in Sri Lanka.
The difference between the cotton growers of the 19 century and today's BPO workers is the availability of information and the internet. Having said that, is the Internet making the real difference to the several thousand workers in the BPO segment - probably not.

The politicians who run Government want quick fixes on employment issues and the BPO industry becomes a darling immediately.

Whether it is the outsourcing software industry or the BPO/ITES business, the Government has a societal responsibility to govern for the well being of the country and this is definitely missing.

For instance, how many of the billion dollar outsourcers are investing in improving lives of ordinary Indians? How many of them are creating brands that will make India proud? This is where Governance must evolve. First with carrots, and then with sticks.

In the world of BPOs, the only way of improving lives is for the Government to regulate how these companies invest in their employees education. Education is the only thing that will free the BPO employees from this modern day bondage. Again a carrot and stick policy here must help.

Most of these policies can easily be achieved by way of tax cuts for companies that do what the government expects them to do. For instance, an outsourcers who invests in creating a software brand gets a higher tax break than his competitor who does not. There are definitely challenges in creating such a regulatory environment, but is entirely possible.
Government is facilitating the flow of wealth to specific three private corporation is not a crime so long their purpose is not to steal the country's wealth. It is not suggested in the article that NIIT, Microsoft and Intel are jointly planning a conspiracy which is supported by SBI to loot the public property. They are going to take 1000 crores for the services that they are going to render.

If there is a need in the society it is a welcome move that these corporate giants are offering to fulfill the need. Obviously we can not expect them to provide the service for free of any charges since they are commercial organizations working for generating profit.

Now the question may be on the ‘need’. Is there really need of computers in the schools? That is the question to be addressed.

There is a group of people belonging to ancient vedantic culture still surviving in Himalayas. Till date they are ‘illiterate’ in the sense that they do not know how to read and write. But they can recite all the 100000 and odd slokas of Mahabaratha. They rightly believe if they learn to read and write their capacity to memorize will be lost.

Reading and Writing skills are good or bad?

In the good old days when we were children we used to by-heart the math table and till date we are far superior and faster than the younger generation in solving simple math problems without using the calculator. It is a undisputable fact that introduction of calculators in the schools will remove the imbalance among the children. Those who can not solve 2 X 2 will be made equal to those who can solve 16 X 16.

Calculators are the boon or bane to the human society?

Let us stop with just these two examples of the impact of growth of science and technology on the advancement of human civilization. The point that is driven is computers are essential from the elementary school level onwards. It is just a question of affordability.

What is the reason for saying computers are essential from elementary school. Can we imagine a world without computers now? So obviously every child in the school need to get exposed to it as early as possible. Even before the child goes to school it is essential (if affordable) to encourage the child to play games on the computers.

‘Computer games’ is the modified version of ‘reading a story book’. In good old days parents keep the weekly magazines and story books away from the children fearing that it will divert them from the academic books. The fear continues even today but one need to appreciate the truth that the younger generation is far superior to the elder generation inspite of all sorts of diversion.

Let us look at the areas of concerns raised in the article.

1. Computer Science as an alternative to Biology.

This is apparently true. But in reality it is not. From the inception of the current educational system students choose between the two streams ‘engineering’ or ‘medical’. Those who want to be doctors avoid math and those who want to be engineers avoid biology. (Infact those who can not tolerate math convince themselves that they are destined to become doctors and those who can not draw a diagram of a plant decide to become engineers.)

Only those who can do both equally well (or equally bad) remain undecided and take both math and biology.

Computer Science as an optional subject has no influence on the above decision. Once the decision is made to opt out of biology or math people choose Computer Science not due to the love of the subject but it is one of the scoring subjects.

No one is planning to be a computer professional when opting for Computer Science. So it is not fair to blame the computer science subject for diverting people from taking biology.

2. Creativity Vs Rote Learning

This observation is quite valid but little to do with the current topic. The educational system has to be changed in general. The current system encourages rote learning and systematically attempts to kill the creativity and intelligence of the gifted students.

But then the gifted students do survive the system. The education system plays a very minor role in shaping the future of the child. The percentage of the knowledge provided by the system is very marginal compared to the knowledge that is inborn in the child. Therefore the only harm that is currently perpetuated by the education system is to shift the focus from spirituality to material growth. But then it provides quicker opportunity for people to realize the futility of the prosperity rather cursing their fate to poverty.

From that view point inclusion of Computer Science in schools facilitating ‘mass production’ of computer professionals is a very good news.

Coming back to the ‘conspiracy’ of the NIIT-MicroSoft-Intel, yes it is clearly the marketing gimmick to declare the computer systems as obsolete every three years. This need to be fought back by providing alternative solutions rather than saying ‘IT enabled education’ in the schools are not required.

The population of India justifies huge long term investment in developing alternatives to Intel-Microsoft. The government can definitely support the development of indigenous hardware/ software solutions rather then supporting the MNCs.
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