Global Game Industry News Blog

Friday, November 17, 2006

Demonstrating the Game Industry as Index

I read this article, having just had a discussion with some folks here about the difficulty in finding the kind of talented help needed by game companies. While this article is (a) all over the place and (b) unclear on specificities , it is quite good at painting a picture of what's going on with work here. I've of course snipped it up a bit, and I'm sure something is lost in that trans(formation/lation). But, it illustrates why I think the game industry makes such a great lens/metric/index into work in a global economy at this current moment.

What is the difference between creating educated "employable" professionals ("employees") and highly skilled corporate assets (I'll use the term "associates" here, a term I'm borrowing from my wife)? I think the answer goes hand in hand with, "We're just not finding enough of the right kinds of people," that I hear from game developers here all the time.

Many people getting hired here to work in games, "employees," are costing companies a significant amount of time, money, and energy to turn them into "associates." What happens when your future working force is actually not coming out into the field with the kinds of skills that you need them to? You have to educate them yourself. I'm also extremely curious why more intern-ing or co-oping is not being done here. It's rare enough in the states the people actually do these sorts of things (though their schools may encourage it, and students ought to be pursuing it more) and it appears even rarer here.

Simultaneously, "associates" are actually assets. They mean more to a company, so it is in their interest to invest in them. I've seen this at my US field sites. Companies seem to be realizing the value of their people and their skills (by and large, there are of course notable exceptions), but I think that broader political, economic, or educational analysis is not understanding that human labor is different than it was a few years ago. You can't really take a software engineer (or artists, or designer ...) straight out of college and toss him in (well, you can, if you really want to) and expect to get much out of them. There are countless other systems, sub-systems, code bases, tools, software packages, etc. that must be learned before they're worth anything significant.

That's part of this article. The other aspect is also important to keep in mind, too. I'm not focusing on "jobs for the underprivileged, the undereducated and the underskilled," but it too makes total sense, and could use some analysis in The States as well.

Engaging India: Demographic dividend or disaster?
With the average Indian now just 23 years old, and with over half the population under 25, many see potential for a big demographic dividend and India likes to projects an image of a vast, English-speaking population of bright and ambitious engineers and scientists.

The reality, for the time being, is actually very different. As things stand, India’s demographics are going to be a source of profound social upheaval in coming years.

I was talking the other day to Dr Ifzal Ali, the chief economist of the Asian Development Bank. His analysis of the situation was bleak. India, he warned, with its working age population set to increase by 71m to reach 762m in the next five years, was heading towards an employment crisis that could lead to social breakdown and a rapid collapse in growth rates.
The first, in his view, is that there is a “huge global oversupply of labour” resulting from the growing integration of India, China and Russia with the world economy. The second is that this global oversupply has come at a time when companies around the world are pursuing competitiveness with “ideological zeal” and creating fewer new jobs per unit of extra output.

Now the idea has traditionally been that in a global economy it will be the lowest cost country that will win a race to the bottom. As Swaminaphan Aiyar, the economist, has put it, globalisation has for the first time in history made poverty an advantage. As companies are forced to scan the world for ways to cut costs, the lower the wages in any one country, the more competitive it will be, all other things being equal.

The problem is that in India all these other things are not equal. To ride the globalisation bandwagon, a country has to create a good investment climate, in terms of regulation, law and order, physical infrastructure and availability of skilled human capital. India is a very long way from doing any of these things.
The point I’m trying to make is that unless India makes a dramatic investment in its human capital, its demographic advantages will turn into a demographic disaster in the form of a massive unemployable labour force.
Although India produces millions of graduates annually, the raw numbers, as company after company finds in its recruitment drives, are a misleading metric for employable skills.

While 3m students graduate from Indian universities each year, only about 25 per cent of engineering graduates and 10-15 per cent of general college graduates are considered suitable for employment in the offshore IT industry, according to a recent study by Nasscom.
He added: “Our education system is not producing enough people with the skill-sets our economy needs. This could seriously stymie India’s economic growth.”

cent oThe lobby group has warned that the Indian IT sector faces a shortfall of 500,000 professionals by 2010 that threatens the country’s dominance of global offshore IT services. Shortages are kicking in even though, according to Nasscom, only 10 perf an estimated “addressable” market of $300bn for global offshoring is being tapped today.

With the industry as a whole struggling with annual employee turnover rates approaching 40 per cent, wage inflation is rising. Reports out this week in the Business Standard indicate that a shortage of skilled labour has resulted in salary increases of 22 per cent during the first half of fiscal year 2007 for the corporate sector as a whole, That figure is the highest it’s been in over three years, with the biggest jump coming from service industries, including banks, airlines, IT and telecom companies; where salary bills have risen by 30-50 per cent in just a year.
But none of these, however, has jobs for the underprivileged, the undereducated and the underskilled. A million mutinies are bubbling up across the country, with the most alarming being the ultra-leftist Naxalite movement, and they are deterring much-needed investment.

India will need to create jobs in large-scale, labour-intensive manufacturing to stop these protest movements from turning into something more serious. Only when there are massive Chinese-style factories making Barbies, Kickers and Gap shirts for a global market will there be jobs for those potentially otherwise tempted by extremism.

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