Opening the door for talent : Kiran Karnik, Past President, NASSCOM

Kiran Karnik, past President of NASSCOM and now one of its trustees, is a prominent figure in the Indian outsourcing industry. Mr. Karnik’s role in reviving Satyam (after a management crisis) after being appointed as Chairman of the Satyam’s board by the government is well known and is a significant contribution to preserving India’s image in the global outsourcing scene. He helped the smooth transition of Satyam to the new management team after Tech Mahindra acquired Satyam. Mr. Karnik was the Managing Director at Discovery Networks in India from 1995 to 2001. He spearheaded the launch of Discovery Channel in South Asia in August 1995 and Animal Planet in 1999. Mr. Karnik worked for over 20 years in the Indian Space Research Organization (ISRO). He held various positions related to the conception, planning and implementation of applications of space technology, focusing especially on the use of communications for development.

He is an eminent thought leader with wisdom to foresee many developments that may impact the country and its economic growth. He shares his thoughts on opening doors for talent in India to respond to changing dynamics and India’s unfettered growth. “Attracting bright foreign students is, therefore, an important element of a long-term talent policy,” he avers.

This is a blog post originally published in NASSCOM EMERGE blog http://blog.nasscom.in/emerge/2010/04/opening-the-door-for-talent/. Reproduced with permission.

Tomorrow’s world is not going to be about capturing ever-depleting natural resources, but about a scarcer commodity: top-flight talent. A global war for talent is already underway and India should act fast.

It is now widely acknowledged that the value of a company or the wealth and power of nations will increasingly be determined by their human capital. Already, in the knowledge sector — a rapidly growing part of the global economy — financial capital matters but little; it is technological capability and intellectual capital that are the key determinants of success. Globally, the economic crisis from 2008 saw the more astute companies retain their key talent, even as they had to lay off people. In India, some companies chose to freeze — or even reduce — salaries and bonuses; a few resorted to lay offs too. Yet, India was far less affected by the economic meltdown; this, and its growing attraction as a high-growth and challenging economy, presented a rare opportunity. Here was a chance for the corporate world, and equally for universities and R&D organisations, to scour the global talent pool and pick up the best and brightest. Unfortunately, few Indian organisations did so.

Talent, today, is very mobile. India, once a major exporter of unskilled manpower, has evolved to one that is a source of highly-skilled expertise. Such immigration — even of a temporary nature — continues to worry some countries, and has become a political issue. Many see it as “taking away the jobs” of locals by bringing in low-wage labour; others worry about the impact on local societal values, norms and culture. Countries are introducing filters — linguistic proficiency, salaries, educational qualifications — and quantitative limits to keep out the unwanted. Such restrictions (like the quantitative limit on H1 visas in the US) are seen by many as being unfair non-tariff barriers to free trade. India, with its large number of highly-educated people, is disadvantaged by such restrictions, which affect its high-potential exports in services like IT-BPO.

At the same time, developed countries face shortages of specific skills, and need to “import” people to meet these requirements. Further, these countries have derived considerable economic benefit from such migrants. A recent study, by the World Economic Forum and Boston Consulting Group, has quantified both these aspects. It indicates that the US will need to add 26 million workers to its talent pool by 2030 to sustain its historical economic growth, while Western Europe will need to add 46 million. With regard to the contribution of highly skilled migrants, this is estimated to be over $1.6 trillion in the US and $227 billion in UK. Little wonder, then, that eminent journalist and author,

Tom Friedman, is a self-confessed “pro-immigration fanatic”.

Work in any high-tech area requires the very best talent. This implies putting together teams that comprise the best experts, irrespective of their nationality. Companies do this in different ways; one is by setting up centres in various countries (thus tapping talent wherever it is) and connecting them through communication links and collaborative work platforms, so as to create a seamless “global” team, virtually. For developed countries, such globalisation (exporting work, instead of importing people) is one way of trying to handle their massive shortage of human resources: a problem that is exacerbated by ageing populations and low birth rates.

While India is — and will continue to be — surplus with regard to overall human-power requirements, it is also short of high skills, especially in specific areas. The WEF-BCG study indicates that in 2020 and 2030 India will face a shortage of high-skills talent in sectors like IT and leisure, and more pronounced gaps in manufacturing and engineering construction. Even today, there are shortages in many areas of technology, in teaching/research and in industry. Plans to rapidly ramp up the education throughput may not produce a sufficient quantity of highly-skilled people of the right quality. Therefore, if a skills gap is not to affect technological progress or economic growth, India too — like many developed countries — may have to “import” talent.

In addition, if innovation is to be a booster for economic growth, more effective delivery of social services and for more holistic development, it must seek out and lure such talent, globally. Many — but not all — may be of Indian origin; attracting non-Indians, too, will be necessary. Tomorrow’s world is not going to be about “capturing” ever-depleting natural resources, but about a scarcer commodity: top-flight talent. A global war for talent is already underway.

Many countries have recognised the need to attract global talent, and have devised appropriate immigration and work permit policies. The US sees the H1 visa as a way of opening doors to highly-skilled people; UK and many European countries have visa and work permit rules that facilitate the inward flow of talent. Singapore has policies which proactively attract talent. Israel opened its doors to Russian and other European migrants; many credit its great success in the high-tech area to the consequent flow of high-calibre talent.

Sadly, in India the awareness of both the challenges and opportunities seems to be low; worse, the bugbear of security is being used to not only discourage foreigners, but actually ban them from certain sectors. Visas, too, have been made difficult. Instead, we need to encourage those with high skills (including researchers and professionals), entrepreneurs and innovators, to work in India. Special visa categories, including “founders visas” and a “talent visa” should be created, to facilitate entry of such persons. They will not take away jobs; rather, they will create both jobs and wealth for India.

It is well known that a substantial percentage of foreign students stay on in the host country for at least a few years after graduation. Attracting bright foreign students is, therefore, an important element of a long-term talent policy. While China might outbid India for natural resources, we have a fair chance of being a more attractive study-destination, particularly for the brightest students from Africa and most of Asia — if our policies encourage them.

It is time for India to open its doors to the world, again, as it once used to.

(This post is part of the ongoing series in YourStory’s coverage of NASSCOM EMERGEOUT Conclave in Chennai on 30 April 2010 where the domestic sector opportunities are to be focused upon for SMEs to take note and explore. Kiran Karnik’s thoughts on acquiring talent from abroad is relevant in the quest of Indian domestic sector to acquire global eminence.)