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Institutions Innovations and the Labour Market: The case of IT sector in India. Nadhanael. G.V ICSSR- PhD Scholar Centre for Development Studies Trivandrum, Kerala, India. Outline. The context The problem The Questions The Approach Empirical Approach and data sources. The context. - PowerPoint PPT Presentation
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Institutions Innovations and the Labour Market: The case of IT sector in India
Nadhanael. G.VICSSR- PhD Scholar
Centre for Development Studies Trivandrum, Kerala, India
Globelcs Academy 2007, 04-05-2007
Outline
• The context
• The problem
• The Questions
• The Approach
• Empirical Approach and data sources
Globelcs Academy 2007, 04-05-2007
The context
As economies continue to move towards “knowledge-based societies”, the role of knowledge workers and information workers becomes increasingly crucial
(OECD, 2001).
Globelcs Academy 2007, 04-05-2007
The context
• ICT Revolution and Role of ICT as a GPT and a Sector
• Rapidly growing IT sector in India– GDP Contribution 0.72 per cent in 1997-98 to 2.38
percent in 2002 - 03.– Share of Exports have increased from 4.9 per cent
to above 20 per cent (Saith and Vijayabaskar 2001).– Huge Potential is expected in terms of
employment generation ( 6 million jobs to be generated by 2008) (NASSCOM-McKinsey Study 2002)
Globelcs Academy 2007, 04-05-2007
What has been studied…
• Focuses Mainly on– Structure of the Industry (Heeks 1996)– Growth and Export Performance (Athreye
2002, D’Costa 2004)– Competitiveness and Innovative Capacity
(Joseph and Abraham 2005, Mani 2005, Parthasarathy 2004).
– Industry academia interaction (D’ Costa 2006)– Labour Market Implications
Globelcs Academy 2007, 04-05-2007
Missing Link….• ‘How’ did India Achieve
competitiveness is not explored
• Changing role of Agents along with the growth of the industry is not analyzed
• Literature in silent on the emergence of new institutions and innovations in labour market
Globelcs Academy 2007, 04-05-2007
Why this should receive focus
• Future growth prospects depends upon learning from the present situation
• Other countries look at India as an example to emulate
Globelcs Academy 2007, 04-05-2007
Role of Skilled Workers
• Skill of the workforce is the major source of competitive advantage in IT
• Value addition is largely done by Labour• The single major factor led to the growth of
IT sector in India is the availability of skilled manpower (ILO 2001)
• Learning and innovation at the workplace contribute to the competitiveness of the firm (Lundvall et al 2006)
Globelcs Academy 2007, 04-05-2007
The Questions
1. How did India develop a skill base – The role of
• Agents: State and Private• Institutions• Interaction
This is essentially an analysis of Skill formation mechanism within the
National Innovation System and its contribution to IT competitiveness
Globelcs Academy 2007, 04-05-2007
The Questions
2. How the role of Different Institutions catering to skill supply change along the growth of the industry
Globelcs Academy 2007, 04-05-2007
The Questions
3. What are the emerging institutions and innovations in the labour market with regard to supply and management of skills.
How does firm’s strategy work under conditions of Imperfect labour market
Globelcs Academy 2007, 04-05-2007
Globelcs Academy 2007, 04-05-2007
Empirical Approach
• Analysis of state policy towards education
• Initiatives for higher and technical education
• Initiatives for Building up computer manpower
• Changing role of public and private sector on education
Globelcs Academy 2007, 04-05-2007
Empirical Approach
• Data– Budgeted analysis of government expenditure– IAMR data base– NTIMS and AIU surveys
Globelcs Academy 2007, 04-05-2007
Empirical Approach
• Analysis of structure of labour supply– NSSO Unit Level data– Probit analysis for 3 period of time
corresponding to 3 different phases of growth of the sector
Globelcs Academy 2007, 04-05-2007
Imperfect labour market
• Increasing unemployment of engineering graduates
• Skill shortage for the industry (Athreye 2006)
• Increasing and exogenously determined wages
• High level of attrition
Globelcs Academy 2007, 04-05-2007
Empirical Approach• Innovations in labour market happens at
three stages– Recruitment : Industry academia interaction– Contract– Work design
o Case Study approach with firms being selected from different type of IT products
o Scheduled interviews with HR personalo Sample survey among the workers
Globelcs Academy 2007, 04-05-2007
• Innovation systems broadly defined not only include product market and process innovations but also include a wide spectrum of managerial and organizational innovations at the enterprise level, labour market innovations and social and institutional innovations at the national level Freeman (1987).