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IBM sees growth in India but faces skill shortage

IBM sees growth in India but faces skill shortage
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First Published: Fri, Feb 02 2007. 09 27 AM IST
Updated: Fri, Feb 02 2007. 09 27 AM IST
BANGALORE: IBM, the world’s largest computer services company, sees better growth in India as retail and small and medium sized firms spend more on technology, but a skills shortage was a challenge, an official said on 1 February.
IBM said its business in India grew 37% in 2006, making it the company’s fastest-growing country operation, as telecoms, banks and government departments ramped up spending on computer hardware and services.“IBM has seen more than 30% year-on-year growth in India in the last four years. The market has grown 14-15%. We have grown more than twice the market,” IBM India general manager Shanker Annaswamy told reporters here.“India’s basic economy has played a big role for us, and we are seeing growth coming from across industries,” he added.“We see market growing so we are also investing in new areas like retail and healthcare. Hopefully, we will see growth. If you ask me am I positive, (I am) very positive.”
IBM has won deals in India including from top mobile services firm Bharti Airtel Ltd. in August 2006, and has made India a global delivery hub for software needs and client services. It is competing with other multinationals as also with India’s export-focused software services companies for outsourcing deals from Indian banks, businesses and government departments.
Domestic spending on software and back-office services is expected to rise to between $7 billion and $7.3 billion in the year to March, from $6 billion in the previous year, according to India’s National Association of Software and Service Companies.
But the rush for staff has led to rising wages and a skills shortage.“It’s (skill shortage) a challenge and we have got to address that ... currently all of us are recruiting,” Annaswamy said.“We know how to recruit quality personnel which are available in India, but we also know how to train them, how to give them career options and how to make them feel proud of being an IBM-er.”IBM employs 53,000 staff in India— up from 3,000 in 2002 —accounting for 16% of its global workforce and making it the company’s second-largest operation after the United States.Consulting firm Accenture Ltd. said on 29 January that it planned to raise staff numbers in India by 30 % to 35,000 by August 2007, overtaking the United States as its biggest employment base.
IBM also has plans to invest in education keeping it an area of key focus in the year 2007. “We will extend the Kidsmart programme and University Relations initiatives across India, and create unique opportunities for our employees to contribute to social causes through volunteer and grants programmes,” he said.
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First Published: Fri, Feb 02 2007. 09 27 AM IST
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