Friday, March 31, 2006

What's that : Bangalore Bug

The word “Bangalored” became a catch word a year ago. (Source : Wikipedia ) .

What’s odd about the term, from the point of view of language, is that it’s unusual for a place name to become a verb, though we may have heard that “Shanghaied” has been known since about 1870, at first in the sense of kidnapping a person to make up the crew numbers on a ship, but now more generally to be forced into doing something against one’s will.

Bangalored” refers to people who have been laid off from a multinational because their job has been moved to India—a business practice designed to save money that is arousing passions in some countries, especially Britain and the USA. Bangalore is cited in particular because of its reputation in the USA as a high-tech city, the Indian equivalent of Silicon Valley that has benefited significantly from such outsourcing.

This was an externally raised topic at the world table but the new term that is creating furore is “Bangalore Bug”. So what’s that?

Jittery, nervous that this is a new bug created by some hacker in Bangalore to break down the security of the Internet and corrupt your system. No No No it’s a new terminology that talks in nutshell the problems that are going to arise due to the pool of skilled labor being finite and subject to laws of demand and supply.

The term has been coined by Raghuram Rajan and Arvind Subramanian of the International Monetory Fund.Raghuram Rajan is among the few Indians who has made such a big name and managing a IMF post at the age of 42. (Details). I sometimes feel great when my elder brother who shuffles his work and classes at the Business School, Chicago says I spoke to this man.

Read here to know more about “Bangalore Bug”. (Source : International Herald Tribune) .

According to the authors, India may be facing a shortage of skilled labor. The authors point out that increasing wages in the Information Technology (IT) sectors have resulted in an exodus of managers from India's traditional manufacturing sectors, such as textiles and manufacturing. Because demand for skilled labor has increased at a compound annual growth rate, wages have dramatically risen, and other sectors have been unable to match these high salaries, which has caused migration of labor.

One of the key discussions which has emerged post the IT and services boom in India is the so called “Bangalore Bug”. The phenomenon goes this way - IT pays big money to fresh engineers, non IT/Tech/Services (ITES) cannot. Consequently non-ITES industries which need skilled manpower become non-competitive due to high labor cost or are starved of high skilled labor. If an engineer can make Rs.20,000 a month in the ITES industry, why would he be willing to work in a manufacturing set up with half the pay, longer working hours and no foreign trips? Also this wage inflation is hurting the IT industry's global competitiveness.

In Bangalore,job shift has become a norm and the majority people do it out of monetary benefits and not from the point of work or executing challenging projects. The funda is simple “make hay when the sun shines” .

The “Bangalore Bug” is principally due to the pool of skilled labor being finite and subject to laws of demand and supply.

The growth of IT has also led to diverging fortunes for many states - while a select handful of states have benefited from increasing foreign investment (Karnataka,Maharashtra,Tamil Nadu, Andhra Pradesh), many of India's populous states have not seen much improvement in recent years (Uttar Pradesh,Bihar,Madhya Pradesh,Jharkhand). According to the authors, to ensure that India's states grow uniformly, the Indian Government must reform India's primary and secondary education systems and investment heavily in infrastructure development. My say : remove all engineering schools which have made a mockery of technical education in India and people start these institutes as money churning machines. There are a plenty of these in India,we need quality and not quantity to be competitive and smart.

The authors also recommend removing "the barriers that prevent foreigners and locals from starting new institutions, while improving accreditation procedures and disclosure standards." I am sure everyone is aware of the "no" card shown to Indian Institute of Management, Bangalore when it expressed its plan to expand its campus in Singapore to cater to the international market and generate extra revenue. We need to make radical changes to such policies to enable India's various sectors and states to grow at a more even pace, which is socially desirable.

We need to start debugging this bug soon.

Keep reading and remain connected


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