So you have finished your IIT and are now looking at the job market for your dream of the past few years to come true. Beware, it could easily be a nightmare. According to a McKinsey Global Institute survey of “The Emerging Global Labour Market”, things may not be as rosy as you have been led to believe.

In a way, it has always been true. Engineering at the top colleges was rarely an end in itself. It was a stepping stone to an MBA degree. Or a passport to a college in the US. Estimates of IIT graduates going abroad are not available. But, as a recent conference in the US revealed, the net worth of IITians in the US is more than the net worth of all the IITians in India put together. “That’s why you have of some of the particularly well-heeled NRIs trying to buy up the IITs,” says a former professor at IIT Bombay, who is now a consultant to large companies.

There are some numbers on the people opting for management, if only from the other side of the fence. Engineers account for nearly 90 per cent of the intake at the IIMs. Girish Marathe, a graduate from IIT Kanpur and IIM, Calcutta, now works with a foreign bank. “I don’t know of anybody who has done both engineering and management and still holds an engineering job,” he says.

While the McKinsey report looks at engineering closely, some of its broader findings also deserve mention. Its study of 28 low-wage countries shows that they have 33 million people with a university degree and up to seven years’ work experience (the young professionals category). However, only 13 per cent of these are suitable for employment by MNCs and available for hire. In India, 25 per cent fall in this category, while the numbers for Brazil (13 per cent) and Russia and China (both 10 per cent) are much lower.

Second, 11 per cent of the 1.46 billion service jobs worldwide can be performed remotely. This varies across sectors. In packaged software, 49 per cent of the jobs can be offshored; at the other end is retail with 3 per cent. However, by 2008 only 4.1 million jobs are likely to move to these low-wage countries.

When it comes to engineers, it is true that US and UK demand could absorb the entire supply of suitable young professional engineers from China, India and the Philippines by 2011. But note the word “suitable”. The study also points out that the number of “suitable” Chinese engineers can be double that of India by 2008 if they just hone their English skills. And that, as every schoolboy knows, is happening in a big way.

What is of relevance to Indians now deciding on their careers is how it will impact wages. The study looks at the hourly labour cost for young professional engineers. With the US considered as 100, the levels currently are 12 per cent for India, 13 per cent for the Philippines, 19 per cent for China and 20 per cent for Malaysia. These salaries will rise in India (to end up at 25-30 per cent of US levels), the Philippines (20-25 per cent), China (25-30 per cent) and Malaysia (30-35 per cent). Of course, salaries will rise in all other countries too, but they won’t rise as a percentage of US salaries.

What’s the lesson? At a trivial level, it probably pays to go abroad particularly to Germany where the salary index is 158 per cent (US = 100). More seriously, it is this cost difference (and the numbers are significant) that will give India and China the edge as they take on the world.