Lack of Manpower in the Electronics Industry

The Indian government has recently announced multiple policies to attract investments in the semiconductor, electronics, and hardware…

July 01, 2020

The Indian government has recently announced multiple policies to attract investments in the semiconductor, electronics, and hardware manufacturing industry in India. If we look at the recent data, India imported electronics goods worth ₹3.88 trillion in the fiscal year 2019, which is close to 11% of all the imports into the country in 2019 [1]. Looking at these numbers, one can say that there lies a great opportunity to reduce such imports, and hence the recent announcements are a great initiative to boost manufacturing in this sector, reduce dependency on imports, generate large scale employment and reduce the trade deficit.

The current pandemic situation has further pushed us to take the required actions to be self-sufficient in the electronics space, which is currently dominated by China. There have been multiple policy announcements by the central government to attract the hardware industry to India and it is a great start. However, one must keep in mind, that there have been many similar policy announcements in past too, but eventually nothing much happened due to various roadblocks and therefore, the current government needs to ensure that the fresh announcements do not fail in the same way. For example, the Make in India initiative did not produce the kind of results which was expected out of it, due to various reasons like lack of policy coherence from various ministries, macroeconomic factors, and inverted duty structure to name a few.

The other issue could be the change in the priority of the upcoming government after the 2024 elections, there’s a chance that the government in 2024 and onward might have different priorities due to the ramifications caused by the current pandemic or for other political reasons and hence the current policy does not get the attention it deserves from the government in future.

However, I think the firms betting on current policies and making huge investments in this field will do everything to ensure that their future plans and projections are not jeopardized due to the changed priorities of the ruling government and the whims and fancies of the bureaucracy. Therefore, one can be confident of the results as long as investments are made and firms have their skin in the game, and considering the government does not introduce any sudden policy changes which has negative consequences.

Therefore, the only challenge left to be addressed where the industries wouldn’t have much influence is the development of skilled manpower which is probably one of the biggest drivers for these industries to prosper in India. As we all know, the majority of the engineering graduates in our country are not employable and when we look at the “ National Employability Report — 2019 “ from Aspiring Minds we find that the engineers in the field of electrical engineering are the least employable at 5.90% whereas, in the case of electronics engineering, it’s little better at 6.90%[2]. When we look into the other data points from the same study, which are similarly concerning, for example around 60% of the students feel that the faculty is not up to the mark and they don’t have the right guidance or 82.6% of the students have not done any technical projects. These data points reflect why our engineering graduates are largely unemployable. We can talk in length about broken engineering education in India, but since this is not the topic of this blog and hence, I will restrict myself.

Now when we look at the recent report from National Skill Development Corporation, on the “Human Resource and Skill Requirements in the Electronics and IT Hardware Industry” we see that India needs 8.9 million skilled employees in the electronics and hardware sector [3]. It is a huge number and looking at the current scenario in India, it will be difficult to generate professionals in such high numbers.

With the push from government and the investments from the industry in the coming 5 to 10 years, we are going to see even higher needs of skilled manpower in the field of hardware and electronics. Though the government has announced comprehensive changes in the education sector in the National Education Policy 2020, it will take its own time to create any significant change in the current scenario. Moreover, there’s are still some issues that might lead to less than the optimal outcome of NEP2020 as NEP doesn’t prescribe any kind of internship, on-duty training for students, faculty development programs, or any comprehensive plan or incentive to improve the teaching and laboratory infrastructure in engineering institutions.

To create manpower for the R&D jobs we need to improve the core curriculum of engineering institutions and need to ensure that the students focus more on acquiring relevant skills rather than theoretical knowledge. We also need to ensure that the students do more core projects on their own rather than sourcing it from somewhere, which is rampant amongst engineering students in India. We need to come up with policies to ensure superior skill-based learning at the engineering institutions and ensure a minimum level of quality by bringing in the right set of incentives, regulations, and penal actions in the engineering education framework.

The upcoming electronics manufacturing industry needs skilled labor, at a reasonable cost to remain competitive in the longer run. If we look in past then it is a similar situation that was faced by the IT industry in the late 80s to early 90s, where they wanted skilled software engineers in large numbers, but skilled software engineers were difficult to find, and its precisely then that the third party institutions like NIIT, LCC, etc. came to existence to cater to this needs to upskill the youth to make them employable in the IT sector. Even the IT sector realized the need of training and most of them created their in-house Learning and Development (L&D) teams and made it mandatory for a new joinee to go through a prescribed training as part of the onboarding process.

In order to support the hardware and electronics industry, we need a similar kind of supporting infrastructure to raise the employability of our youth and then match them with a relevant opening in the electronics industry. We need to set up third-party training and skilling institutes to impart specific set skills to the youth to make them employable for a particular kind of job at a reasonable cost. We do have such institutions already in some of the metro cities but due to their expensive initial fixed setup cost and lack of interest amongst the student community, it is not viable for them to go to Tier 2 cities. I propose that the government should step up here and announce incentives for such training institutes to set up their training centers in Tier 2 and Tier 3 cities. I would also suggest that the government should announce scholarships as part of their efforts from the Ministry of Skill Development and provide free training to meritorious students from such private training institutes, providing them a guaranteed business that will work as a huge incentive for them to expand to smaller cities.

The other solution to this problem for this issue might be to set up training centers and train every new hire before (s)he is assigned any job. This might require a significant amount of investments from the industry and will significantly raise the onboarding expenses for the organizations. However, in the long run, such investments will pay off manifold.

The other type of employees we need to cater to this industry is the managerial and leadership talent. But these people need to have some basic know-how of the electronics industry for them to be effective at the job, especially considering that they have to make decisions and mistakes in the electronics industry is generally very expensive, it can be as bad as bankruptcy of a small company. Therefore, in order to mitigate this risk, such professionals can be hired from the current pool of professionals working in similar industries. But considering the projected growth, India will need way more managers and leaders going forward, and hence it’s the time that the premier institutions of India like IITs and IIMs should step-up and create specialized courses in the field of hardware & electronics business management. Here the top IITs can easily offer such courses as they generally have an in-house business school. Whereas the IIMs can tie-up with IITs or other engineering colleges and co-develop a course to cater to this field. Professionals trained in such programs will have the requisite decision-making skills which will be complemented with the required knowledge of industry-specific risks and opportunities.

The hardware industry is poised to take off and we need people with relevant skills to complement the investments and the expected growth, but as a nation, we need to up our game and create professionals to contribute to the industry.

References

Originally published at https://www.rahulrajsharma.com on July 1, 2020.