Labour arbitrage has always been highlighted as India Inc.’s strength, but in reality, it reflects India’s poor economic situation where there is a lack of opportunities and abundance of people to do any job thus, driving the costs down. This presented a unique opportunity to shift global operations to India to save on costs and deal with lack of resources and increasing costs elsewhere. While IT companies, GCCs and GICs have capitalised on this for long and the story may well continue 10-15 years in the future, our growth model cannot excessively focus on labour arbitrage and needs to shift from labour arbitrage to building capabilities in innovation, quality, differentiation, and agility. It is high time we start focusing on revamping the education system, skilling the population with cutting edge technology and incentivising R&D and entrepreneurship. This is vital for shaping India’s economic landscape on a world stage.
Please click here to read the full article by Minu Dwivedi, published in ET Insights.
Minu has over 19 years of work experience. Her practice area is General Corporate and Commercial with special focus on Labour and Employment, White Collar Crimes, FCPA, Anti-Corruption and Anti-Bribery, Disciplinary and Other Workplace Investigations, POSH, Ethics, HR and Corporate Governance.