Skill shortage hits outsourced product development industry

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Chennai, Aug 21 Growth of booming domestic Outsourced Product Development (OPD) industry may be stumped due to an acute shortage of skilled labour, especially product engineers.

According to an unofficial estimate, the projected requirement for product-focused professionals would be over 2.8 lakh by 2008, while the current availability of product engineers is around 80,000.

OPD industry fears that the supply of engineers may not catch up with the rapidly growing demand. And if the demand is not met, the Indian OPD industry will have to go shopping for product engineers in the US.

Gowri Shankar Subramanian, chief executive officer (CEO) of the Chennai-based Aspire Systems, an offshore product development company, believes that in the worst case scenario, the industry will be forced to import engineers from the US, which has an extensive presence of product Companies and product oriented engineers.

Shortage of IT talent is nothing new but the problem is much more acute in the case of the OPD industry. “It is not a question of availability of engineering graduates. India churns out thousands of engineering graduates every year. The concern here is about the gross shortage in the availability of product oriented engineers,” said Mr Subramanian.

Product development is a nascent industry and the skills required for developing products is very different from that required for application development. “Indian software industry has been traditionally strong on the application development side. Product development is a new area which requires innovation oriented engineers with the ability to develop products. This is unfortunately lacking among the current breed of engineers,” said Mr Subramanian.

According to him, though engineering graduates have sound technical knowledge, they lack logical ability and communication skills.

Industry is tackling this issue by providing in-house training to product engineers. On an average, product development Companies train their employees for 3-6 months in developing products. “We try to instill a sense of perfectionism in our employees during the training period,” said Mr Subramanian.

A Nasscom-Mckinsey report estimates that the Indian OPD industry is expected to grow to around $11 billion by 2008. Globally, the OPD industry is pegged at around $9 billion, growing year-on-year at a rate of 20%. Product Companies currently outsource around 25% of product development work.

“Outsourcing of product development work has just started. Companies normally outsource some portion of the work to contractors when the workload increases. The good news is that this is changing with heightened interest in outsourcing among product Companies,” he