'You Can't Expect To Get Hot Potatoes From Colleges'

'It is the responsibility of industry to take the very bright talent whose knowledge of software engineering basics is very high, and then give them additional skills.'

According to the 2023-2024 Economic Survey, only 51.25% of graduates in India are considered employable.

This means about half of the graduates are not ready to enter the workforce after college.

Is the situation really that bad?

According to DPIIT Start up India, the country has the third largest start-up ecosystem in India.

Is India's start up ecosystem one of the best in the world?

Who else is more qualified to talk about the current trend in the IT industry and the start-up ecosystem than Dr Ganesh Natarajan who has mentored many young entrepreneurs, invested in five accelerator and venture funds and enabled more than 80 start-ups and high growth companies in the IT industry for more than three decades?

"India should not copy the American AI model, but concentrate on finding solutions for the problems the country faces. We should create our own models for AI which will become role models for the global South like the UPI has done," Dr Natarajan tells Rediff.com's Shobha Warrier.

The first of a two-part interview:

You were associated with Nasscom for 30 years. How much has the IT industry changed over the years?

I joined NASSCOM in the mid-1990s when I was the CEO of APTECH.

I can say that as an industry, we have matured very dramatically after 2005. The industry grew in three waves -- staffing services, offshore outsourcing and IT transformation till 2005.

After 2005 came Digital, AI, analytics, engineering, Business Process Management etc and the industry has proved to be a true transformation partners for businesses worldwide.

However in recent times, the growth of business has slowed because there are a number of point solutions needed by clients may not have large volumes.

While there is a fair amount of automation is happening in the industry, large contracts for offshore service providers are probably slowing down now.

Most of the offshore maintenance and migration work is already contracted to Indian IT and BPM firms and hence incremental growth is slower.

Another reason for the offshore slowing down is the emergence of GCCs (Global Capability Centres) which are in-house technology and business process centres that are captive to large companies and exceed 1,500 in number.

GCCs are taking up a lot of the action these days.

Because of this, the third-party providers may mature, but will not grow as fast as they were earlier.

Are the third-party providers disappearing altogether from India?

Not at all. If you look at how deeply they are embedded in the Fortune 500 companies of US and FTSE 100 companies of the UK, you will see that almost 90% of large corporations are working with some large Indian IT companies or mid-tier companies.

They will never disappear because they are critical to business continuity and growth.

These companies may do a lot of work in-house, but there will still be a lot of work for the third-party partners to do.

It is a core versus context equilibrium. While the core might move more and more in-house, the contextual applications will be with third-party for a large period of time.

Will the third-party work move from one country to another or one region to another?

Not really. In fact, most large corporations have multiple centres these days.

They may have a Latin America footprint, or an Eastern Europe footprint with centres coming up in Poland, Czech Republic, etc.

But with India's place in terms of scale and process maturity, 60% of global offshore outsourcing will still come to India.

But it might become more of maintenance, and migration for those who want to move to new solutions.

It will be less of core development, which is being taken over by Generative AI and other automation solutions, in any case.

My feeling is that when development work becomes more automated, you don't need a large offshore team to do that; you only need people to support the operations, infrastructure management, intelligent BPOs, etc.

The general complaint we have been hearing for more than two decades is that fresh engineering graduates are unemployable.
As a person who has been part of the industry as a mentor, investor and entrepreneur, what is your opinion?

I don't agree with the complaint. It is very easy to criticise.

Do you expect a fresh graduate from an IIT to know Oracle 13.x? It is an unfair expectation.

Engineering colleges are meant to teach students the fundamentals like Software Engineering, Data Structures and Computer Architecture.

Learning to code is an additional benefit. Once they learn the basics from college, it is easy to learn any new version of the technology.

You can't expect to get 'hot potatoes' from colleges.

You have to invest in continuous training for new skills.

I think it is the responsibility of industry to take the very bright talent whose knowledge of software engineering basics is very high, and then give them additional skills in a particular software.

Having said that, I would say, even a 20% of the 3 million people graduating annually are high potential for the industry. It is a huge number.

You are talking about 600,000 people which is more than adequate for the industry.

Yes, it is a perpetual argument between the industry and the academia, but I feel there is no dearth of talent.

For example, in the last ten years, the company my wife and I have built and run -- Global Talent Track -- has skilled and placed 2 million young people from second rung engineering colleges in top companies.

You mean it is an unfair criticism that is coming from industry?

I would say, it is an exaggerated criticism!

Industry and academia need to work together to bring out the potential of youth.

For example, as a board member of the State of Bank of India, I facilitated the investment in a BFSI Data and Analytics Centre at IIT Bombay which will do joint research and development of talent.

We don't complain, we partner and develop talent.

Some people say in the new areas in technology like AI or digital, India is at least a decade behind China or the US.
Do you also feel that way?

In terms of AI, both US and China are far ahead of India. A lot more needs to be done for India to catch up with them.

I am of the opinion that India should not copy the American AI model, but concentrate on finding solutions for the problems the country faces.

In fact, we should create our own well defined and narrow models for AI which will be democratised and become role models for the global South like the UPI has done.

• Part 2 of the Interview: 'Don't Jump In Because It's Fashionable To Be An Entrepreneur'

Feature Presentation: Aslam Hunani/Rediff.com