A recent study by McKinsey and Co. which was sponsored by Nasscom, found that India will need 2.3 million information technology and business process outsourcing workers by 2010, but Indian universities wont be able to meet that need, leaving employers with a shortfall of 500,000.
But even if Indian institutions can produce graduates in sufficient numbers, Indian executives said they want graduates to have knowledge they can put to work right away.
College grads that are schooled in software engineering may know Java or C++, they said, but they are unfamiliar with structured programming techniques that are essential to the development of software in a commercial environment.
These must be taught by the company itself after hiring the worker.
"The real challenge is finding a sufficient number of [human] resources. … The government will have to increase the quality of education, said S. "Kris" Gopalkrishnan, chief operating officer and co-founder of Infosys, in an interview at the companys headquarters in Bangalore.
When looking at the Indian educational system, its important to distinguish between mainstream Indian colleges and the elite IITs (India Institutes of Technology) which have stringent entrance and graduation requirements and are generally agreed to be on a par with the best technology institutions in the world.
However, IITs grant only 4,000 advanced degrees per year, a number that Indian IT firms would like to see increase.
A new hire fresh out of college can expect an annual salary of approximately $5,000 at the top companies, but his or her employer will spend another $5,000 to see that the new worker has the skills to make a contribution in a production environment.
"We have to spend enormous amounts on training. Colleges dont have a good faculties and a good theoretical base. The IT architecture curriculum is outdated; the faculty is leaving to work for companies," said Mohandas Pai, CFO of Infosys, who is responsible for human resources at the Bangalore-based IT services company.
Pai said Infosys has 150 of its own faculty and spends $200 milllion annually on its various training programs, which are for both new and existing employees.
Its a burden that the Indian IT services firms would be very happy to see Indian colleges take on.
Pai said his company is sending its staff to give lectures at universities so that the institutions will know whats expected of their graduates in the real world.
But the Indian government, which funds most of the cost of running Indian universities, will have something to say about changes to the system.
Professors are paid according to a government scale, which many Indian IT executives consider to be inadequate.
"Our future success depends on creating an innovation ecosystem with business, universities and government. We are all customers of each other," said S. Ramadorai, CEO of Tata Consultancy Services in Mumbai.
To that end, Indian IT firms are sponsoring "Campus Connect," which brings leading-edge curricular resources electronically to 100 Indian colleges.
Not only must Indian colleges bring their curricula in line with the needs of Indian IT companies, but to achieve the larger goal of innovation, even more is needed, said Ramadorai.
"We need a multidisciplinary approach. Engineers need to combine skills with other disciplines, such as business, banking and medicine," he said.
The effect would be to produce an education that is much more in line with that found at U.S. colleges, which stress a variety of courses in a liberal arts framework.
"We need to reform the Indian Educational system. We need less compliers and more skeptics," said Ramadorai.
Another Indian IT executive agreed. "We need to encourage innovation of ideas. Are we creative? Historically, we have great art. We need the same spirit in business," said Azim Premji, CEO of Wipro.
Further, Premji sees in the emerging rivalry with China a battle in education in which the Chinese may get the upper hand.
"China sees the need to make children more creative. They believe they are the finest in the world in rote learning. Now they are focusing on engineering education and US universities for liberal arts education. They believe a balance is needed between engineering and liberal arts creativity."
The Indian IT executives have sounded the alarm. Whether the Indian government is listening remains to be seen.
Stan Gibson can be reached at email@example.com.