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India's biggest challenge to growth is the 'People Challenge'. TV Mohandas Pai, Chairman, Manipal Education, Drew Kalton, President, Airtel Enterprise Services, Vivek Kulkarni, CEO, Brickwork Ratings, Venkatesh Valluri, President, Ingersoll-Rand, Sripada Chandrasehkar, Vice President, HR, IBM and Villloo Morawalla Patell, Chairperson & MD, Avesthagen discuss the issue whether India Inc is ready for challenges that the Indian work force is throwing at them.
Mohandas Pai believes that the whole world faces the same challenge because there is a mismatch between what the economic growth requires and the capabilities of any system to produce the right kind of people.
"One of the biggest challenges we face in India is continued evolution because of stimulation of growth. Because of that economy, I think we have created an expectation around a young work force of continued growth of themselves without fully meeting, realizing their expectations," said Drew Kalton.
Below is an edited tramscript of the interview. Also watch the accompaying videos.
Q: The most basic law of economics says that if there is demand for talent that the system, the educational institutions, training institutes ought to throw up the talent. If it does not throw up the talent people from outside, the country will migrate into the country and fill those holes in talent. If we do not enough pilots, we import foreign pilots. Why is there such a talent crunch in India with 1.2 billion people?
TV Mohandas Pai: I think it is not about availability of people; it is about the growth of the economy. The economy is growing at 8-9%. It means that it may double in eight years and there is no system anywhere in the world. Any education system can cater with 8.5%-9% growth for 10-20 years or more.
If you go to China, there is a shortage of 500,000 CEOs. If you want to hire people in China, you have a challenge. United States had the same challenge at the beginning of the 20th century while Japan faced it in the '60s and '70s. South East Asia still has a challenge. The whole world faces the same challenge because there is a mismatch between what the economic growth requires and the capabilities of any system to produce the right kind of people.
Q: Mohandas Pai is saying that no system in the world can cope with this. We thought it is the unique vagaries of the Indian system bureaucracy. Is that disturbing for you that the system can actually never cope with this kind of growth we will always have a skill talent requirement mismatch?
Chandrasehkar: The other way of looking at it is when you have faced that kind of a challenge, some systems respond to it better than others. Let us hope that we could build a eco system in India where the economic growth that the private enterprises are seeing is a similar kind of a growth also is driven in the education and training sector. If those reforms happen and if we can bring similar accelerated growth in the education sector, the supply side will catch up with the demand side. I am aware that this is a universal challenge but I believe India will produce a unique answer to this.
Q: Is privatization that answer of education or will it make the problem worse?
Patell: I think it will make the problem worse. Today, certain private schools are ill-equipped in terms of infrastructure and don't have the right teachers. They are just popping up as a business. There has to be sufficient amount of regulation from the academia councils of the world whether it is an international baccalaureate or if it's an Indian School Certificate (ISC) or an SSC, the people who are giving out these kind of rights to these kind of start up educational institutes have to control what's being taught.
Q: Privatization of education is going to lead to the teaching shops that might make the problem worse compounded with the behavior of people who are actually giving you permissions to start these institutes. Do you see us going into the trap?
Valluri: There are two issues to this. I think we need to have investments in education and I don't believe that the government is capable of making those investments on its own. I agree that there has got to be a certain regulatory body, which says that when you privatize what are the controls and mechanisms.
Q: Nobody is arguing for unbridled privatization, nobody makes that case?
Valluri: The bigger piece is that even if you have got this control regulatory, the right kind of educational institutions that are being set up, the linkage between the growth statistics, the growth areas and how do you actually build that linkage between the education institutes, the training institutes and the growth areas is essential. I think that linkage is completely missing. We need to have that platform created quicker than just kind of leaving it there.
Q: A quick reaction from Mohandas Pai on this?
Pai: I don't believe the private sector is the answer to India's education challenge, absolutely not.
Q: Despite you being in the private sector in education?
Pai: Yes absolutely, I say it with full confidence. The solution to India's challenge is a liberalization education sector where universities get autonomy, our universities don't have autonomy. UGC and AICTE control everybody. A group of 10 people sitting in Delhi try to control every stream of activity. Our universities don't have money, they don't have the ability to hire faculty is a terrible situation. If you look at the private sector, they suffer from the same kind of an ecosystem, which is just not able to produce the best results. Right from the 1990s for the last 20 years, the best people have not gone to teaching, they have gone into industry. So when you don't have enough faculties coming there, privatization is not the solution.
Q: Merely because institutes don't pay good salaries?
Pai: Opening up the entire sector, giving the autonomy to various institutions to bloom and to come up, and allowing diversity is the solution.
Q: Why is it so hard for the government to de-control something so easy as education? There is nothing to be gained from holding control.
Kulkarni: I don't think there is any great law of economics; what is working in the country are laws of corruption. Now Mohandas Pai is talking of 8.5% growth, but what about the growth rate of engineering colleges? Engineering colleges have grown at 50%. There are engineering graduates everywhere.
Q: A lot of them owned by prominent politicians and associated families.
Kulkarni: In Andhra Pradesh, I think if there were hardly 50 colleges in 2000, today they have 700 colleges.
Q: Is that a demand answering a supply?
Kulkarni: The regulator of AICTE went to jail but he did give permission to many colleges. So at the cost of going to the jail, he has been giving the permission. So I think it's a kind of a mix of everything. There needs to be a little bit of control. But at the same time, I agree with Mohandas Pai that a lot of de-control is required so that good institutions are encouraged.
http://www.moneycontrol.com/news/business/find-out-india-incs-biggest-growth-challenge_678862.html
Mohandas Pai believes that the whole world faces the same challenge because there is a mismatch between what the economic growth requires and the capabilities of any system to produce the right kind of people.
"One of the biggest challenges we face in India is continued evolution because of stimulation of growth. Because of that economy, I think we have created an expectation around a young work force of continued growth of themselves without fully meeting, realizing their expectations," said Drew Kalton.
Below is an edited tramscript of the interview. Also watch the accompaying videos.
Q: The most basic law of economics says that if there is demand for talent that the system, the educational institutions, training institutes ought to throw up the talent. If it does not throw up the talent people from outside, the country will migrate into the country and fill those holes in talent. If we do not enough pilots, we import foreign pilots. Why is there such a talent crunch in India with 1.2 billion people?
TV Mohandas Pai: I think it is not about availability of people; it is about the growth of the economy. The economy is growing at 8-9%. It means that it may double in eight years and there is no system anywhere in the world. Any education system can cater with 8.5%-9% growth for 10-20 years or more.
If you go to China, there is a shortage of 500,000 CEOs. If you want to hire people in China, you have a challenge. United States had the same challenge at the beginning of the 20th century while Japan faced it in the '60s and '70s. South East Asia still has a challenge. The whole world faces the same challenge because there is a mismatch between what the economic growth requires and the capabilities of any system to produce the right kind of people.
Q: Mohandas Pai is saying that no system in the world can cope with this. We thought it is the unique vagaries of the Indian system bureaucracy. Is that disturbing for you that the system can actually never cope with this kind of growth we will always have a skill talent requirement mismatch?
Chandrasehkar: The other way of looking at it is when you have faced that kind of a challenge, some systems respond to it better than others. Let us hope that we could build a eco system in India where the economic growth that the private enterprises are seeing is a similar kind of a growth also is driven in the education and training sector. If those reforms happen and if we can bring similar accelerated growth in the education sector, the supply side will catch up with the demand side. I am aware that this is a universal challenge but I believe India will produce a unique answer to this.
Q: Is privatization that answer of education or will it make the problem worse?
Patell: I think it will make the problem worse. Today, certain private schools are ill-equipped in terms of infrastructure and don't have the right teachers. They are just popping up as a business. There has to be sufficient amount of regulation from the academia councils of the world whether it is an international baccalaureate or if it's an Indian School Certificate (ISC) or an SSC, the people who are giving out these kind of rights to these kind of start up educational institutes have to control what's being taught.
Q: Privatization of education is going to lead to the teaching shops that might make the problem worse compounded with the behavior of people who are actually giving you permissions to start these institutes. Do you see us going into the trap?
Valluri: There are two issues to this. I think we need to have investments in education and I don't believe that the government is capable of making those investments on its own. I agree that there has got to be a certain regulatory body, which says that when you privatize what are the controls and mechanisms.
Q: Nobody is arguing for unbridled privatization, nobody makes that case?
Valluri: The bigger piece is that even if you have got this control regulatory, the right kind of educational institutions that are being set up, the linkage between the growth statistics, the growth areas and how do you actually build that linkage between the education institutes, the training institutes and the growth areas is essential. I think that linkage is completely missing. We need to have that platform created quicker than just kind of leaving it there.
Q: A quick reaction from Mohandas Pai on this?
Pai: I don't believe the private sector is the answer to India's education challenge, absolutely not.
Q: Despite you being in the private sector in education?
Pai: Yes absolutely, I say it with full confidence. The solution to India's challenge is a liberalization education sector where universities get autonomy, our universities don't have autonomy. UGC and AICTE control everybody. A group of 10 people sitting in Delhi try to control every stream of activity. Our universities don't have money, they don't have the ability to hire faculty is a terrible situation. If you look at the private sector, they suffer from the same kind of an ecosystem, which is just not able to produce the best results. Right from the 1990s for the last 20 years, the best people have not gone to teaching, they have gone into industry. So when you don't have enough faculties coming there, privatization is not the solution.
Q: Merely because institutes don't pay good salaries?
Pai: Opening up the entire sector, giving the autonomy to various institutions to bloom and to come up, and allowing diversity is the solution.
Q: Why is it so hard for the government to de-control something so easy as education? There is nothing to be gained from holding control.
Kulkarni: I don't think there is any great law of economics; what is working in the country are laws of corruption. Now Mohandas Pai is talking of 8.5% growth, but what about the growth rate of engineering colleges? Engineering colleges have grown at 50%. There are engineering graduates everywhere.
Q: A lot of them owned by prominent politicians and associated families.
Kulkarni: In Andhra Pradesh, I think if there were hardly 50 colleges in 2000, today they have 700 colleges.
Q: Is that a demand answering a supply?
Kulkarni: The regulator of AICTE went to jail but he did give permission to many colleges. So at the cost of going to the jail, he has been giving the permission. So I think it's a kind of a mix of everything. There needs to be a little bit of control. But at the same time, I agree with Mohandas Pai that a lot of de-control is required so that good institutions are encouraged.
http://www.moneycontrol.com/news/business/find-out-india-incs-biggest-growth-challenge_678862.html
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