Skill development for the future

By 2020, India will be the youngest country in the world with an estimated 64 percent of the population in the employable age range. While the economic potential of this is great, unless many changes are made – from education to mindsets – many youth will remain unemployable.

Just ten percent of India’s youth enter higher education and many families endure much hardship to get them there. Not every student can become a doctor or lawyer and a growing number from this group continue to be partly employed or unemployed.

While Indian industry points to a need for around 500 million skilled workers by 2022, the question remains as to where these skilled workers come from. We also need to continue to ask ourselves how to change mindsets and add respectability to skills-oriented professions. The speed of change in the last three decades- from rural to urban, from agriculture to manufacturing – is witness to that.

Fortunately, movement has taken place on many fronts in the vocational training eco-environment. Recognizing the need for a much larger supply of skills than is presently available in the country, the National Skill Policy for Development was set up in 2009. Under it, the government has formed the National Skill Development Corporation (NSDC), a public private partnership between the Government and industries. NSDC has begun the challenging task of creating high-quality, for-profit vocational education institutes with more than 100 training organisations and other, smaller ones that operate independently. Their collective goal is to meet 30 percent of the training needs of the 500 million required by 2022.

There is still a great need for more collaboration between a greater number of stakeholders.

However, many more hands must come together to make the movement successful. As an organisation dedicated to supporting poverty alleviation through educational skills and financial services for more than a decade now, we at the Michael & Susan Dell Foundation recommend a holistic, multidimensional approach. As a stakeholder and leader in the vocational training space, one of our own strategies has been to play an active role in funding early stage pilots and companies.

Over the past six years, we have invested more than Rupees 60 crores in fourteen organisations. Through this, we have co-created intellectual property (IP) for market-based vocational training providers like Labournet and catalyzed vocational training opportunities for a growing number of young people. We also believe that it will take some time for market-based models to penetrate the bottom of the pyramid (BoP) so philanthropic or CSR-supported models will continue to be required for poor students. The foundation has also helped training organisations – which were completely dependent on donor money – achieve scale and sustainability. One example, Dr Reddy’s Foundation, has grown three-fold in the last six years.

While our aim is to impact the lives of some 500,000 youth directly and one million youth indirectly by 2018, there is still a great need for more collaboration between a greater number of stakeholders. For example, most interventions to date have focused on formal sector-led employment, yet 90 percent of India’s economy is served by the informal sector. Any model of solutions for skills training must also be inclusive of this very large micro-entrepreneurial sector.

I have a three-pronged approach to ensure such efforts lead to a positive shift in the sector:

  • Create access for youth to a quality supply of training programmes
  • Create access to funding for training and/or entrepreneurial opportunities
  • Create access to market opportunities for jobs, services and products

In my next post, I’ll look at the first of this three-pronged approach, namely the need for a quality supply of training programmes and how we might collectively create it.