How India Started Dominating the Skilled Labour Market

If you are a doctor, or an engineer, or a mathematician, or a scientist, or a lab assistant, or somebody who belongs to the category of highly skilled workers, chances are that you have Indian colleagues. This is likely true regardless of your geographical location. While it is also very likely that there are colleagues from other countries such as China or Iran, the Indian colleagues seem to have a unique presence. To cut to the chase, let’s have a look at the following list of tech companies, and their CEOs:

1. Google LLC & Alphabet INC – Sundar Pichai
2. Microsoft – Satya Nadella
3. Adobe Inc. – Shantanu Narayen
4. Nokia – Rajeev Suri
5. IBM Group – Arvind Krishna
6. Mastercard – Ajaypal Singh Banga

Notice the common point here? They are all of Indian origin, have had the fundamentals of their education established in India, and have gone on mostly via higher studies to other nations to establish themselves on a global scale. Wherever meritocracy reigns, the Indians seem to be rising up the ranks. In this article, I try to cover why this is the case, and what the contributing factors to this social phenomenon are.

This essay is supported by Generatebg

The Language

The background to this story goes back to colonial India, when the British ruled the country. Back then, even though the Indians hated the tyranny of the British rule, and eventually gained their own freedom, the British influence gave the country a boost in terms of technology like railway infrastructure, the postal system, etc. Many of these systems were still established in the English language after the country’s independence. As the Indians were still finding their feet in a newly freed country, skilled people were required to man these complicated systems.  Anyone who was willing and able to learn the English language gained an advantage in terms of employment. Slowly, but surely, a blanket of social respect started to grow for one’s command of the English language. Add in the fact that the country was divided by language (as of the date of this article, there are 22 scheduled languages in India), English worked well as a common language for people from different states to communicate with each other. While the same phenomenon is responsible for the establishment of English as the Lingua Franca across the globe, in between countries, the prevalence of this phenomenon within a country is very unique. Most countries speak a single language or just a few languages. Decades later, the Indians’ command of the English language (despite the accent) enabled them to gain an edge in terms of communication on a global scale. This materialised into profitable outings in both low-cost labour markets such as the well-known call-centre outsourcing as well as the high-performance turnover markets, like chief business positions in Multi-National-Corporations (MNCs).

The Education

The Indian culture worships education. Over the years, this worship turned into an obsession, where one’s social status depends on one’s level of education. Consequently, entire generations started throwing themselves into a fierce competition of who can learn better and faster. If you haven’t seen many Indian athletes in the Olympics over the decades, this is because the Indians were competing in a different sport: the sport of education. The competition here is so fierce, yet the rewards are that much more attractive. The cream of the winners, the clever ones, get to learn the state-of-the-art for unbelievably subsidised prices (almost free of cost), and consequently have huge earning potential when they go out into the market. This inclination to worship education also made the Indians respect educated people, creating a circle of respect. This circle of respect nurtures business growth beyond cultural differences.

The Value Arbitrage

Highly educated at low cost, as the Indians went out into the market, they were quick to figure out that international markets were paying more for their education. Most of these people were from the lower-to-middle socio-economic classes, and put their family’s well-being first before patriotism. This led to a large scale brain drain phenomenon, as people continued to find more attractive deals for their education outside of the country than inland. As global businesses were getting more and more efficient, and all the more meritocratic, this whole system took on a face of its own. Let’s take the average US citizen, who would have to pay ‘x’ US Dollars to achieve a said high level of education before entering the skilled workforce. Let’s say that ‘x’ is so high that it pushes the average US citizen into years of debt. He or she is likely discouraged from going for this level of education, when there are more profitable professions possible in the short term. Now, there comes along a random Indian person, who has achieved the said high level of education at ‘x/20’ of the price and can speak the language almost as well as the U.S citizen. The same opportunity is available to the cream of the Indians at a fraction of the cost. Therein lies the value arbitrage, as to why there is lesser drive from the local workforce, and more drive from an immigrant work force.

The Numbers Game

As a final factor in consideration, the sheer number of Indians has to be taken into account. With a 1.3 Billion strong population, the tail numbers (based on standard deviation) also increase significantly. Expressed otherwise, there are bound to be a lot of clever people with such a huge sample size of population. And out of all of these clever people, there are bound to be (still) many who figure out the global value arbitrage.

Conclusion

India just happens to be a country which had exposure to a globally spoken language, and found application of this language useful to bridge its own unique internal language differences. India just happens to be a country with a relatively young and driven workforce that worships education, and hands out social respect to educated people. India just happens to be a country with a huge population of 1.3 Billion, out of which many millions are bound to be clever human beings. A significant number of these clever human beings are bound to figure out that people outside of their country are willing to pay more for their work than inland organisations. Put in all of these factors together, it is no wonder anymore that you see Indians thriving in any highly skilled labour environment in any geographical location. And like any social phenomenon, this will not last forever. The market efficiency has already been pushing the cost of education in India up, and the pay difference between inland and outland down.

I hope you found this article interesting and useful. If you’d like to get notified when interesting content gets published here, consider subscribing.