Tapping talents in India through the diaspora network: Opportunities and challenges

Abstract

India had a strong cultural emphasis on education both at private and government levels. Since the 1990s, government spending on education has been growing at 12% a year, of which roughly a fifth goes towards higher education. India's higher education system now ranks alongside that of United States in terms of scale. However, as a share of GDP total education spending is still lower than in most developed countries. India spends 4.9% of its GDP on education against 5.7% in OECD countries. Besides, nongovernment spending on education is a relatively high proportion of the total at 25%. Over 12 million students were enrolled in universities and colleges of India in 2009. Roughly 20% of students study commerce, economics or management courses, and tertiary enrolment rates are less than half those in advanced economies such as the United Kingdom. Thus, while graduate populations are large in terms of absolute numbers, for the foreseeable future, India's economies will remain dominated by low-skilled labour. By 2030, the share of skilled labour in working population will be just 6.2% compared to 14% for the world as a whole and 40% in high-income countries. This creates a big challenge as India aspires to move up the value chain. While India has made rapid strides in expanding higher education systems, it still faces a number of challenges in terms of effectively utilizing the existing supply of talent as well as increasing it sufficiently to meet the demands of a rapidly growing economy. Leveraging the expertise and knowledge of diasporas for the benefit of India is the main issue the paper addresses and it emphasizes the beginning of a new agenda of promoting policy reform and institutional innovation in collaboration with diaspora networks, which can create crucial bridges among policy, technological and managerial expertise and local scenarios.