Half of India's 356,000 engineering and technology graduates last year failed to find gainful employment and less than five percent were deemed suitable to work at multinationals such as Google, according to a study.
In an interview with ZDNet, Amit Goel, CEO of Bangalore-based technology consultancy firm Knowledgefaber, discussed the findings of his company's report "Fresh talent pool landscape in India," which highlights the imbalance of India's IT human capital industry.
After interviewing hundreds of MNC CEOs and HR executives and college principals, Knowledgefaber found India's IT capability was highly concentrated amongst a handful of states and institutions across the vast, populous nation.
The report concluded that 45 percent of students, who primarily emerged from Tier 2 and 3 colleges, were only good enough to work at IT services firm such as Infosys and Wipro.
It added only some five percent of students who trained at Tier 1 institutions, such as the network of Information Institute of Technology (IIT) and the Regional Education Colleges (RECs), were skilled, smart, and capable enough to develop software products for large companies such as Yahoo, Google and NetApp. Incidently just last month, Google hired an IIT alumni to lead its newly-combined Android and Chrome divisions.
The remaining 50 percent who trained at Tier 3B colleges last year, were unemployable or found "very small jobs".
Goel said the demand for high-quality IIT and REC graduates significantly outstripped supply.
"We're talking about the top 25 to 40 colleges which are really global level education but everybody is trying to hire from the same talent pool," said Goel, who has studied the subject for the past eight years," he said.
According to the CEO, it is a big problem for companies that establish an Indian operation on the promise of cheap, qualified, and plentiful IT labor, but quickly find they must improve wages and conditions to attract, and retain, the best talent.
Interestingly five southern states, Tamil Nadu, Andhra Pradesh, Maharshtra, Karnataka, and Kerala, produced 76 percent of the total engineering graduates passing out of India.
The report predicts India's colleges will produce 476,000 graduates in 2017--a six percent compound annual growth rate from 2013.
The private sector has started to bridge the valley of death that spans the highly desirable Tier 1 graduates and their less popular counterparts from other institutions: Infosys and Wipro train college and high school graduates over six to twelve months to bring them up to speed, and similar programs that have been adopted by IBM and Accenture.
Goel also pointed to "new age universities" such as Venture Hire, founded by former venture capital investors, which trains IIT graduates to the standard required to thrive at the world's top software product developers.
"One thing we can't do is reverse the demand for Indian talent. We can't stop it. I wish we could bring to some halt and raise the supply side, but companies are very thirsty for Indian talent,"said Goel.
"If we can't win the game we'll change the game; and when we change the game it will not be the traditional education system, it will be a completely new way of looking at education.
"Globally the same thing is happening," he said, pointing to the fact that Stanford and Harvard distribute courses online, and have established operations in India.