S. Gopalakrishnan, Managing Director and CEO, Infosys Technologies Limited, addressed the impact of youth unemployment convener.
The Working Group Members are Hari Bhartia, President, Confederation of Indian Industry (CII), Mr. Akio Mimura, Representative Director & Chairman, Nippon Steel, Dong Bin Shin, Vice Chairman, Lotte Group, Mr. Chang-Jae Shin, CEO, Kyobo Life and Mr. Eli Leenaars, Member of ING Management Board Banking, ING
"The global economic crisis has brought to the fore the problem of youth unemployment. In a scenario where jobs are hard to come by for even seasoned skilled workers, across the globe, the youth cohort - those just out of school between ages 15-24 with few skills - is finding it hard to compete with other job seekers for the limited vacancies," CEO Kris started.
Unemployment is rampant. It has more than doubled in the US since December 2007. In the euro zone in 2009, it increased by 2%. And it has moved higher in transition economies and developing countries, in particular in the Commonwealth of Independent States (CIS) and Central and Southeastern Europe, where the number of unemployed increased by as much as 35% in 2009.
"In the long term, the effect will be a drop in the level of participation among youth in employment and in enrolment for higher (secondary) education as the perceived benefits of schooling will be lower. The costs of these developments are high. Whether unemployed or under employed, the youth cohort loses out individually, socially and economically. The economic and social costs include loss of income, loss in output and productivity, and the erosion of skills, resulting in a long-term loss of human capital that can be significant," CEO Gopalakrishnan explained.
To reverse this trend, the Working Group Member identified three broad areas in which the G20, governments and the private sector can act to address youth unemployment such as, the creation of opportunities to enhance employment qualitatively that are secure and long term, the creation of opportunities for furthering education and options for reskilling and the promotion of income-generating opportunities including entrepreneurship development and apprenticeship.
"We would like to recommend to the G20 for creating public-private academic partnerships to train youth for jobs that are available immediately or in the short term.
The economic crisis brings the focus back to our educational systems and points to reskilling as the shortest route to near-term employment. Growing skill gaps are already a concern, requiring a concerted effort by policymakers, private-industry players and academic institutions to address. Education and training impact individual productivity, the capacity for innovation, and the ability to adapt to innovation. These in turn promote economic growth.
Technical Vocational Education and Training (TVET) is already an important part of the policy agenda of governments in many countries. This is paralleled by a growing opportunity for youth to learn required skills and enter the work environment through apprenticeships in the informal sector and internships in the formal sector. A first step would include identifying and mapping the willingness and preparedness of youth to join the workforce," said Mr. Gopalakrishnan.
Q: You mentioned that incentives should be provided to reduce youth unemployment. What kind of incentives can the government offer
A: Infosys has developed substantially with 1.2 million individuals from 40 countries including China, Latin America, Eastern Europe, the Philippines and others. We hire people from all corners of the world. Presently, we also provide interesting internship programs throughout different regions of the world where typically 150-180 students participate in internship programs for a duration of 2-3 months. Recently, Infosys has collaborated with engineering professors from accredited universities inorder enhance their engineering education programs.
The Indian government provides tax exemptions for businesses that grow rapidly and promote the development of the IT industry. Business owners receive similar benefits when they build new factories in Mexico.
Q: Infosys's outsorcing is a service which downsizes the manpower of a company. Could you share with us how to process the consulting work during the downsizing process, and could you provide specific advice on how to create a global knowledge center
A: The profits from Market share are US $6 billion while the profits from outsourcing are US $7 billion.
We account for only 1% of the outsourcing industry, but we are seeking to expand our market as we keep or current and new customers satisfied, in addition to maintaining and futher developing the services we provide.
We also introduced the cloud computing system as a new service for our customers. If the business excells with these new values and endeavors, we should have no trouble expanding, which is our every intention.
Regarding the global knowledge center, we know what kind of data we need to collect and propagate.
Apparently, the place has not been selected yet, but if the government accepts our offer, the venue will soon be determined. Accordingly, one thing we felt strongly about is that the G20 Summit should be supported.
Global Human Resource Center will be a fine collection of best practices; virtual reality technology will be delivered throughout the world.