With degrees tucked under their belt and a promise of hefty paychecks, newly minted MBAs prepare to fulfil their dreams in the new India. In a nation with high hopes from the future, this image is incompatible with the reality that it is faced with today: how to employ these Masters of Business Administration? Are there enough jobs on offer? Has the proliferation of business schools caused a surge of talent (or untalent) in the market? Are we facing an MBA glut?
“India’s planners (especially the HRD ministry) have no clue on matching skills needed by the country with capacity,” says Arvind Singhal of Technopak, a firm that offers consultancy services on education. “Most developed countries have a medium and long-term assessment of the composition of their national economies and encourage the creation of academic capacity on those lines.”
Though the economic slowdown has caused overseas job markets to be less welcoming of outsiders, our problems are more deep rooted. From a haphazard policy on industry-led job creation to ignoring employment- inducing businesses such as tourism, food processing, textiles, small entrepreneurship and more, we have many reasons for failing ourselves. “The main problem is about creating jobs,” says Arvind Subramanian, senior fellow at the Peterson Institute for International Economics and the Center for Global Development.
There is also a lack of focus on developing appropriate skill-sets. “Unfortunately, most research on our demographic dividend is limited only to its numeric strength,” says Adil Malia, Head (Human Resource Operations) at the Essar Group. “But the quality of our human capital reflects huge skills-and-competency deficits.”
This is partly due to our education system stressing too much on academic knowledge, while the developed economies emphasise vocational education and skill- development. Many management graduates in India have not even seen a workplace. Nurtured on a diet of hypothetical studies in B-schools, they collapse in the face of real-time challenges at the workplace.
Moreover, when someone opts for a non-MBA route, the environment in India punishes him/her for trying. We do not consider failure as a learning experience but a miscarriage of opportunities.
This mentality has driven the mushrooming of B-schools across the country. According to a rough estimate, MBA seats in India have quadrupled from 90,000 to almost 4 lakh in the past five years. The MBAs turned out by many of these schools often lack good communication skills and are low on confidence. Yet the ‘formula’ has done wonders for ‘investors’ in education. Singhal explains that a 12 to 21-month MBA programme offers the “best” financial return in the education sector as “unlike engineering and medicine, a B- school requires only basic infrastructure and relatively easy-to-find faculty, while the fees are almost the same”.
So it’s no surprise that India today produces the highest number of MBAs a year, but only the best land jobs with high salaries, while the rest have to make do with unsatisfactory roles. Many end up disgruntled with the cost benefit ratio of doing an MBA. Singhal insists there is a “herd mentality” at work. “Over the past three decades, MBA has come to be seen as a route to big salaries.”
But who will create jobs for these MBAs? Subramanian says it’s foolhardy to think jobs can grow despite industry. “Can we do this without growth in manufacturing? But that requires infrastructure, regulatory certainty and all the things the Indian State has increasingly become bad at providing.”
For the past two decades, India has grown at a frenetic pace, but with little growth in jobs, the narrative offers no solace to aspiring job seekers. We have improved productivity, but often with machines, not by harnessing our human resources. If we don’t change our approach to management, create new sectors and promote entrepreneurship, we will be left with a generation full of ideas but not a chance to put them to use — a recipe for social unrest.
']]}