According to Economic Times, IIT Bombay has acceeded to the government’s request to open up first day of placement season to core engineering industries. This is despite the fact that these industries offer only “half of the average Rs 30 lakh (~US$ 46K) salary” benchmark set by traditional Day 1 prima-donnas like investment banking, ecommerce, management consulting and technology.
Readers of Michael Lewis’s “The Big Short” would know how banks made a fortune before sparking off the Great Financial Crisis. Here’s a short version for others: Investment banks created structured financial products that no one understood, packaged subprime mortgages into derivatives that Warren Buffett famously called “weapons of mass financial destruction”, hoodwinked Moody’s and other leading CRAs into rating MBS, CDO, and other structured products as prime assets, secured the necessary regulatory approvals, and sold them off to all and sundry, including conservative pension funds. In the process, they made boatloads of money and could reward themselves $$M bonuses – heck even one or two $$$M severance packages. In the end, when everything went belly up, they managed to get bailed out with taxpayer money.
Anyone who has been following the ecommerce industry in India would’ve heard about this cab aggregator company that was recently named as the Best Startup of the Year. Founded by two IIT Bombay engineering graduates five years ago, the company reached an astounding US$ 5B valuation in its latest funding round – despite making little revenues and suffering massive losses.
Investment banks and ecommerce startups have challenged established norms of business and rewritten many rules of the game. In the process, they have earned fame and fortune without breaking any laws. It definitely requires top notch talent to do all that.
Why these industries need to source this talent from IITs – rather than somewhere else – is entirely up to them. What matters is that they’ve chosen to do so: According to Economic Times, “IITians are stealing a march… over MBAs. Start-ups and large e-commerce companies such as Flipkart, Ola, Oyo Rooms, Jabong, CarDekho.com, Shopclues and Bewakoof. com, plan to hire more engineers this year in corporate and managerial functions.”
Against this backdrop, it’s not surprising that banking and ecommerce dominate Day 1 placements at the IITs.
Now, coming to “core engineering”. I joined the IT industry soon after I graduated from IIT Bombay in 1985. Therefore, I’m out of touch with the minutiae of the job description of engineering graduates in these industries. However, I do know that cars are still made out of the four stroke combustion engine invented in the early 20th century and soda ash is still manufactured using the Solvay process developed in the 1860s.
Therefore, I’m somewhat puzzled at why core engineering is coveting top notch talent from the IITs. The aforementioned article says A-leaguers would give impetus to the government’s “Make In India” initiative. While that’s a politically correct statement, it sounds lame.
But that’s not the point – if core engineering is coveting top talent from the IITs, it is.
What really matters is, will top talent from the IITs covet core engineering. Will toppers from IITs reciprocate core engineering’s love and accept jobs offered by steel, electronics and heavy engineering companies at half the pay of traditional Day 1 companies?
That’s the million – er, forty six thousand – dollar question.
We’ll know the answer soon, when placements get over by the last week of December.