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236 International Trade in Services
against independent power generation by park operators and protracted negotiations
about the scope for fiscal incentives. As a rule, policy makers should focus on
listening to the needs of the companies and providing flexible solutions and rapid
services rather than offering fiscal incentives. If they are provided, fiscal incentives
should be time limited and conform to WTO rules. (For an extensive discussion,
see Creskoff and Walkenhorst 2009.)
Update technical education curricula, encourage students to learn
languages, and support private technical colleges
The IT service sector makes intensive use of engineering talent. Few countries
produce enough IT talent to become significant exporters of IT services. There are
great differences in terms of human resource endowments, but overall, the number
of graduates in IT-related fields is growing rapidly. A career in the IT service
sector is increasingly attractive. In South Asia, Sri Lanka produces roughly
3,500 graduates in IT-related fields every year. Bangladesh has 5,500 graduates;
Pakistan has 20,000; and India has 350,000 (Dossani 2010). 10 Much of the growth
in the number of engineering graduates in South Asia has been generated by the
private provision of IT training. For example, in Pakistan, private higher education
institutions train 80 percent of the local engineering graduates. The impact of
private higher education in engineering science in India is also striking. In 1990,
private education had a negligible market share, while, in 2005, more than threefourths
of engineering institutions were privately operated, and 95 percent of the
increase in enrollments since 1997 has come from private colleges. Box 7.4
describes a private initiative to train personnel for IT careers.
The biggest challenge is to raise the quality and relevance of technical education.
In 2005, the McKinsey Global Institute assessed the quantity and quality of
young professionals (graduates with up to seven years of work experience) and
their employability in multinationals in 36 developing countries (MGI 2005).
Based on interviews and surveys of human resource managers employed by
Box 7.4: NIIT: A Private Initiative to Train Personnel for IT Service Careers
Established in 1981, NIIT Limited was originally set up to help India’s nascent IT service
sector overcome human resource shortages. With revenue exceeding US$2 billion, it
has grown to become one of the world’s leading private training institutes, offering
learning solutions to individuals, companies, and educational institutions. It is active in
some 40 countries, including 8 countries in Africa, 8 in the Americas, and 12 in Asia.
According to the company’s Web site, the company’s training solutions in areas such as
IT, business process outsourcing, and executive management education have provided
computer-based learning to nearly 7.8 million students in over 9,500 schools.