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Reaping India's demographic dividend

Sunit Prakash, IT consultant. 09 September 2011, 3:33 pm
Reaping India's demographic dividend

Laurence Millar kicked off a whole chain of thoughts when I attended his NZCS session "Agenda for the Digital Economy". He inspired me to write this article, about Indian students coming to study in New Zealand, Indian organisations servicing New Zealand, New Zealand organisations exploring India - and the challenges and opportunities this presents to New Zealand.

And, with Indian students - by Golly we have found a Market for New Zealand Education!

It's already started: following the Prime Minister's visit to India, Immigration New Zealand recently announced a scheme whereby international students will be able to bypass the immigration department for obtaining a visa, which would be issued directly by trusted institutions.

The move is in line with the department's vision in bringing the best people New Zealand needs to prosper, and the story carried on Stuff goes on to say that Immigration was upping its game in the critical markets of China and India.

Until recently, Australia was a favoured destination of choice for many Indian students, but with attacks on Indian students there and the wide press coverage in India, Australia's loss has become New Zealand's gain. With the new visa process, you can fully expect a surge in full-fee paying Indian students; up from around 8,500 currently.

The education institutes have been fully aware of the market and the opportunity. They have dedicated marketing teams to farm India for prospective students, and no doubt have been building their delivery capacity for a while. From what I know of Indian students elsewhere, notably the US, a large number of these students will be taking IT, engineering and business related courses, and some will want to stay back and work here. New Zealand will have the opportunity to benefit from India's demographic dividend as approximately 55 per cent of India's population is between the ages of 15 and 59.

Oh dear, they have graduated; now what?

Has the local industry given any thought on how to coach, guide, mentor and absorb students as they graduate and come out of these institutions? That's a question arising from having fielded a growing number of calls from newly arrived overseas IT professionals, typically from Asia, looking for guidance and advice.

Add to that LinkedIn invitations from second and third generation Kiwis of Indian origin who are entering the work force looking to set up and expand their professional networks.

We need to think about what happens after school too, when people leave studenthood and enter working life.

Is New Zealand parochial?

I could not but help grimace inwardly when ex-NZ Government CIO Laurence Millar recently said at his NZCS Agenda for a Digital Economy presentation [link goes to a Powerpoint PPTX presentation] in August that New Zealand as a nation is parochial and that it needs to look outward if it wants to succeed in the Brave New World.

In short, we may be far away phsycially from everywhere, but in an Internet-enabled world, that's no longer relevant. We can't afford parochialism in other words.

The India-New Zealand IT landscape

Here are a few random thoughts and observations sparked off by Millar's presentation:

  • Indian IT companies are not new to New Zealand, some have had a presence since the 80's;
  • Most of the Indian IT majors are well represented in New Zealand, they include Tata Consultancy Services, Hindustan Computers Limited, Mahindra-Satyam, Wipro and Infosys;
  • As traditional markets in the US and Europe dry up, these majors and 2nd tier Indian IT firms are increasingly looking at increasing their penetration in Australia & New Zealand and exploring markets in Latin America & Africa;
  • More often than not, 2nd (& 3rd tier) players, after discovering the size of the New Zealand market and the local rates, find their enthusiasm evaporating rapidly and try to service it out of Australia;
  • Lack of capital is not an issue and acquisition of local IT organisations by Indian companies to gain foothold in the market is not an unknown strategy
  • Most large organisations in New Zealand, particularly the Big 4 Australian owned banks have offshore IT operations in some form or the other in India;
  • Service delivery, whether onshore, offshore, in-house or outsourced, continues to remain a challenge on account of cultural differences in addition to the time-zone difference and communication issues;
  • Laurence identified Datacom, Xero and Weta as examples of New Zealand organisations operating in the digital space and having global aspirations;  
  • In addition there are other small but growing number of New Zealand technology companies either already in the Indian marketplace or exploring it; these include Vista Entertainment, Tomizone & NorthSouth GIS among others;
  • Indian IT professionals in their own right (i.e.: those who came under their own steam, as opposed to employees of the Indian majors) have also been in New Zealand since the 80's at least;
  • Many, many Indian IT professionals have come to New Zealand and gone on to the US, Singapore or Australia - simply because New Zealand could not provide opportunities for advancement that these countries provided;
  • Many that remain are well connected and respected seniors in the industry, with demonstrable ability to make business connections and act as commercial bridges between India & New Zealand ;
  • Increasingly, with opportunities in India on the rise, the patience of new immigrants with New Zealand (read: you-do-not-have-local-work-experience) is diminishing with many turning back far sooner than before;
  • Sometimes labelled as "good workers", immigrants in Silicon Valley have turned into highly successful entrepreneurs (e.g.: founders of: AppLabs, Juniper, Akamai, i2, Cirrus, Tibco, Sun Microsystems & Hotmail).

New Zealand's all-of-Government India strategy

India is a vast place, with many different facets. The Ministry of Foreign Affairs and Trade realised this early on and developed an "all-of-government" strategy was required. Here is the link to the strategy paper, MFAT's NZ India Inc Strategy.

This is a positive development that should help local business gain a foothold in the Indian market.

For businesses, India presents two intertwined opportunities:

  • A new emerging market; and
  • A workforce that will present itself in New Zealand.

The first opportunity is relatively easy. Depending on their products and services, businesses can choose the market they wish to serve.  This could be Australia, the US, China, Europe, or it could be India.

The second opportunity is somewhat more complicated and vexing. Skilled, motivated and mobile migrants are arriving, and the numbers will increase.

The choice for New Zealand

New Zealand has a choice. It can turn skilled immigrants into dairy owners, petrol station attendants, check-out operators and taxi drivers. If that happens, another Paul Matthews ten years down the track will ask the same question again "Can we have Innovation without Skills?"

However, New Zealand can also create Silicon Valley-like conditions to harness the opportunities. An example of how that might happen is the Imagine Cup, in which Auckland University students came up with some world-beating ideas.

India can be part of this too. With a population of over a billion people, India's biggest strength is its intellectual capital, something the US has benefited from

Who knows how many Drurys & Morgans are hidden in the crop that is making New Zealand their new home!

 

The challenge for the industry

If you are an industry body, a professional association, a business enterprise, a business owner, a board member, or a senior manager is part of your charter to address skills and innovation?

The same goes if you are charged with business development, responsible for talent acquisition, retention and growth. Have you considered the twin opportunities and the challenges? More importantly do you have it in your strategic plan to address and leverage off them?

New Zealand's success for the future is not in tourism and farming, it is high-tech as Sir Paul Callaghan pointed out recently.

 

New Zealand: the place where talent wants to live from Royal Society of New Zealand on Vimeo.

 

Think about the skills shortage, think about where the skills are coming from, and think about where the growing and emerging markets are. You owe it to your organisation. You owe it to New Zealand.

 

Sunit Prakash is a Wellington based IT Consultant specialising in IT Service Management, Lean Transformation and India.


Comments

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Philip Spurr 11 September 2011, 3:00 pm

Hi Sunit,

This is an interesting scheme that they are proposing, however I (as I am sure there are many that feel the same way as I do) feel that this scheme isn't in the best interest of New Zealand's IT industry.

I find it interesting that everyone keeps saying that there is an IT skills shortage here in New Zealand, I don't believe that is true (yet). The way I see it, it's the New Zealand companies making it harder and harder for IT graduates to get a job, which in turn results in less and less people wanting to go into IT, partly due to people telling friends and family how difficult it is for them to get a job. (As we all know, word-of-mouth is very effective at spreading information at a rapid rate).

The reason I say this is that I myself am a recent IT graduate. Having just finished my second Diploma in IT, I have been looking for jobs, specifically "graduate" roles, and keep getting the same reply from every single application I put forward, and that is "Sorry, you do not have enough commercial experience". I have to say that this is very frustrating, given that these "graduate" roles are being re-listed for several weeks after they tell me, and most likely many other graduates that they don't have enough experience. I guess it come's back to the question that has been repeated for a long time... "How are we suppose to gain the experience, if no one gives us a chance to gain it?".

I personally feel that New Zealand is shooting itself in the foot, driving away potential future IT game changers in New Zealand by the IT companies placing requirements on graduate applicants that are too high, most IT graduates don't have the two to three years experience that companies are saying that the "graduate" applicants "must have". Now the government wants to bring more people from other countries here to study in IT taking the university placements, and the jobs that New Zealanders could be taking. In my mind, this will result in a lot of New Zealanders thinking "What's the point in going into IT now?". It's already hard enough for us, and as you can see, I feel that putting this scheme in place will only make it harder for us. I believe that New Zealand needs to look at making it easier for New Zealand IT graduates to get into jobs, we need to support our own country by supporting the New Zealanders that are just starting out in the IT industry, not bring in more people from other countries to study here.

Keep in mind that these are just my thoughts on this matter, and only covers a small section of your article.

Regards,

Phil

Sunit Prakash 12 September 2011, 3:16 pm

Hi Philip -

The scheme may or may not be in the best interest of New Zealand's IT industry, it will certainly give the Education sector a boost.

The thrust of the article is that there are two challenges and opportunities:

- a new market - India

- a new source of skills - Indian students

To tackle the first challenge & opportunity is "optional"; ie: an organisation may choose to tackle it. The second one is somewhat more complex and vexing as you have outlined in your comments.

Having said that, immigrants in the Silicon Valley have not neccessarily taken jobs away from locals. As the article says, given the right condititions are created, it can provide fertile ground for technology startups.

And if you feel a fresh graduate has a tough time getting a break, wait till you are 50 and have to compete with young bucks who are hungrier and savvier than you !

- Sunit


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