India is growing fast. China is growing faster. Together they will account for more than a quarter of world GNP by 2025.
That's all old news. Yet why are India's bosses more optimistic just now than China's?
Two recent data snapshots illustrate that puzzle, one concerning the job market and the other measuring the confidence of business leaders in the two countries.
Much of the industrialized world frets about a looming talent shortage, but Indian bosses aren't finding it difficult to fill job vacancies at all.
Worldwide, two out of five employers are having difficulty filing positions, according to a 23-country survey released by employment services firm Manpower this week. In India, only one in seven bosses reports such problems.
In China, however, one in four employers reports difficulty in finding staff, with production operators in shortest supply--in contrast to India, where sales reps are the labor market's hot commodity.
Regardless of the ease of finding staff in India, employment prospects remain strong in the economy, Manpower found in a separate survey, its quarterly employment outlook. Its most recent showed Indian employers continuing to report the most optimistic hiring expectations in the Asia-Pacific region, including China.
That reflects their overall optimism about the economy. A survey by management consultants McKinsey & Co. found Indian executives far more cheerful about the future than their Chinese counterparts, by 18 percentage points.
Chinese executives are, if anything, getting glummer. Their view of conditions in their own industries fell by 9 percentage points from when the same survey was taken six months earlier, and overall they had switched from being "fairly hopeful" to "neutral," by McKinsey's characterization.
McKinsey has also found a difference in the hiring plans of Indian and Chinese companies. India's see a steady expansion of new jobs, whereas Chinese executives who plan to increase their workforce expect to add jobs in greater abundance than executives in other countries. (And those who expect to be laying off staff foresee deeper cuts.)
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In China, Manpower notes, university graduates appear reluctant to leave the provincial cities where they studied and are unavailable for work in the internationally connected cities where most multinational and big domestic firms operate.
Developing countries no less than developed ones face a challenge in making sure the right people with the right skills are in the right place at the right time.
India may have several advantages over China in avoiding getting caught in the squeeze between a lack of qualified staff in the high-skills labor market and an oversupply of low-skill workers.
First, India owes much of its growth to private businesses, like Infosys, Wipro, the Tata Group and Dr. Reddys Laboratories, that service American and European high-tech industries such as software, IT services and pharmaceuticals. This has made the supply of high-skill labor more market-driven than in China, where growth has been driven by a planned economy tapping into domestic savings and foreign investment to build a low-cost, often state-controlled manufacturing base.
Second, India benefits more than China from reverse brain drain. China's diaspora of overseas Chinese is greater and more settled than India's diaspora of nonresident Indians. The authorities in Beijing may need to take measures to encourage many more of its students who study abroad to return home to invest their newfound knowledge and skills in the Chinese economy.
Third, English, the lingua franca of global business, is more widely spoken in India than China. English-language skills make citizens more employable by multinationals and better able to do business around the globe. With 16 times the population, China has only three times as many English-speaking engineers as the Philippines.
That is not say that India is without employment challenges: It needs more top-quality engineers and chemists and needs to develop technical and managerial expertise outside its biotech and IT offshoring businesses.
