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Business News/ Home Page / Growth in Indian ITeS sector boosts English-language school enrolment
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Growth in Indian ITeS sector boosts English-language school enrolment

Growth in Indian ITeS sector boosts English-language school enrolment

Education matters: Tabassum Naaz and Umesh Singh at Aegis BPO. Each information technology-enabled services centre in an area leads to a 13% jump in enrolment in the local English-language schools. RaPremium

Education matters: Tabassum Naaz and Umesh Singh at Aegis BPO. Each information technology-enabled services centre in an area leads to a 13% jump in enrolment in the local English-language schools. Ra

New Delhi: The value of a college degree dawned on Tabassum Naaz’s family only when the 22-year-old village woman landed a job at Aegis business process outsourcing in Gurgaon, a hub of information technology-enabled services (ITeS) on the outskirts of New Delhi.

“When I was preparing to come to Delhi for a job, everyone in the village laughed and asked how was it possible that my village education would find me a job in a big city," recalls Naaz, who studied at the little-known Sant Sri BM College at Jagdishpur in Bihar.

Education matters: Tabassum Naaz and Umesh Singh at Aegis BPO. Each information technology-enabled services centre in an area leads to a 13% jump in enrolment in the local English-language schools. Ramesh Pathania / Mint

Far from being a one-off case, Naaz exemplifies a trend—the extraordinary growth of the ITeS sector in India over the past two decades has had a significant impact on education, particularly English education.

A study by Emily Oster and Bryce Millet of the University of Chicago, and another by Robert Jensen of the UCLA School of Public Affairs in the US, released last month, indicate the opening of ITeS centres has directly boosted enrolment in schools, particularly women’s enrolment, locally.

ITeS, or business process outsourcing (BPO), typically refers to outsourced back-office functions such as human resources, finance and accounting as well as front office jobs such as customer-related services.

The industry has grown to employ 2.3 million people directly and benefit 8.2 million through indirect employment, up from 56,000 in 1991, according to Nasscom. The lobby group projects aggregated revenue of $73.1 billion (Rs3.25 trillion) from the IT-BPO sector in 2010.

Oster’s study considers the impact of the opening of ITeS centres on school enrolment in three southern states that it says have been significantly influenced by globalization —Karnataka, Andhra Pradesh and Tamil Nadu.

“We find that when an ITeS centre is introduced to a pin code, school enrolment in that area increases in the next year...ITeS centres do not impact schools that are more than 3-4 miles away. The results suggest that enrolment may continue to increase as ITeS centres and other businesses of this type become more common," Oster said in an email response to Mint.

According to the study, which considers figures from 1990-2007, an additional ITeS centre in a pin code prompts a 5.7% jump in school enrolment.

“India has had the problem of unemployed graduates. This is where people felt that the education system was failing them, and hence saw little point in investing in it," says Vrinda Walavalkar, senior vice-president, corporate communications at Firstsource Solutions Ltd, a BPO firm.

“Today, BPO jobs, retail shop floor jobs and several other upcoming sectors are proving that even a basic 10th standard, 12th standard (education) and graduate degree can get them a job. Intuitively, one would imagine that therefore, people are seeing the point in investing in education," she says.

In entry-level interviews at Aegis BPO, where Naaz works, nearly 40-45% receive job offers while 30-35% are selected for training to prepare them for the job, says Salil Chakravarty, assistant manager-training, for Aegis Aspire Consultancy Services.

Of the 20% who do not qualify, many are those who have not even made it through high school, he adds. “Yet, there in no end to vacancies. We usually have four batches of about 100-odd people for training in a month."

Umesh Singh, 25, a graduate from Awadhesh Pratap Singh University at Reva, Madhya Pradesh, remained jobless for a year after his graduation in 2007. After that, he only found job as a lowly helper at an export firm in Gurgaon.

“After 12th, my father kept telling me not to pursue studies. Even after my graduation, I was paid Rs2,700 a month as a helper and was beginning to think there was nothing more I could do with my degree," he says.

Two months at the export firm brought him in contact with a call centre employee who helped him enrol in a 15-day training programme at Aegis. He now earns Rs6,200 as a customer service executive.

The impact, says the Oster study, is particularly evident in English-medium schools, with the language being increasingly seen as indispensable to the outsourcing business.

English-language school enrolment increases by around 13% with the introduction of each ITeS centre, although the impact on local language schools is effectively zero.

“It has become pretty evident that to get jobs, three qualities are important these days: proficiency of English language, IT competence and certain amount of presentability for working in multinationals," says Shukla Bose, founder and chief executive of Parikrma Humanity Foundation, Bangalore. “In Parikrma, we have four schools with 1,200 children from slums and all of them are English-medium schools."

But Raju Bhatnagar, senior vice-president, BPO and government relations at Nasscom, says English is not the only passport to a BPO job.

“The domestic BPO market has been growing exponentially and it doesn’t need English language skills. If you are in Andhra Pradesh and if you are fluent in Telugu, it works. Moreover, education needn’t necessarily come from school; it can be given on the job," he says.

The study by Jensen, associate professor of public policy at UCLA School of Public Affairs, Los Angeles, focuses on women—specifically the impact of an ITeS job on a woman employee’s household.

“I found that in villages where young women were placed in ITeS jobs, the education of younger girls improved dramatically," Jensen said in an email response to Mint.

He predicts that with India shifting towards a service economy, women’s participation in the labour force will increase, and in turn lead parents to provide girls with better education. “This is a pattern we have seen worldwide and throughout history," he adds.

For many who are already employed in the sector, their jobs have allowed them to continue their education in the hope of higher positions.

Shravan Kumar, the son of a farmer from Lucknow who joined Genpact BPO in 2004 after studying up to class XII, now holds a management degree that he acquired through correspondence course from Sikkim Manipal University.

“When I began, I was just a process associate. Today, I am a process developer," he says. “After upgrading my skills, I can reach managerial level and earn more than Rs50,000 a month."

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Updated: 02 May 2010, 11:05 PM IST
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