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Bridge skills gap to boost job creation

EducationWorld March 2023 | Magazine Special Essay

India’s biggest problem is bridging the skills gap for job creation at scale. The country’s GDP can grow to Rs.400 lakh crore, if its working-age population is employed

With a GDP of Rs.300 lakh crore and 6.5 percent growth forecast — making the country the fastest growing economy globally — India is adding 12 million youth to its labour force annually. Nearly half are employed in agriculture, and the other half is in industry and services.
India has the advantages of favourable demographics and rapid digital penetration. Industry 4.0 supported by the Gig economy is opening up a range of opportunities for youth. However, India’s target of 29 million skilled professionals and GDP target of Rs.850 lakh crore (by 2030) is perhaps too ambitious.

Unemployment at 8.3 percent is dragging down growth. Digitisation is driving automation while the workforce is unsuitable for the digital era. Only a quarter of India’s graduates are employable. With unemployment highest in the 15-29 age group, the future looks grim.

India’s biggest problem is bridging the skills gap for job creation at scale. The country’s GDP can grow to Rs.400 lakh crore (i.e, 1.5x of the current US economy), if its working-age population is employed. India needs a National Doctrine with four strong pillars — Mindset, Structure, Building Blocks, and Values. In my previous essay (https://www.educationworld.in/transforming-india-into-a-global-education-hub/), I wrote about Mindset. Here I address the structure that India can adopt to bridge the skills gap for jobs creation.

Make cars so highways can be built. Tomorrow’s world belongs to the skilled, not merely educated. Skilling youth is similar to making cars first so highways can be built. India’s current institutional framework of National Skill Development Mission, NEP 2020, Samagra Shiksha, Rashtriya Madhyamik Shiksha Abhiyan, and Sarva Shiksha Abhiyan, are in the right direction and an excellent foundation to build on.

Yet making India’s youth skilled and employable calls for a shift in the education system from emphasis on knowledge accumulation to its application. Skills training will have to start from primary school and culminate in higher education with internships/apprenticeships.
Industry has to partner with government through PPP (public private partnerships) to build a synergistic next generation platform — Advanced Integrated Mission for Skills (AIMS) — for a skills ecosystem customised to deliver high quality, well-trained talent supply chain (i.e, cars) to meet rising industry demand for skilled professionals in climate-smart agriculture, quantum computing, AI, robotics, space, and green economy. AIMS can create long-term impact among learners, employers/investors and government to enable jobs creation and start-ups incubation (i.e, highways) to power India in Industry 4.0 and beyond.

When rubber meets road. AIMS should have five structural elements. (1) Testing at point-of-entry and continuously through a learner’s journey, (2) Capability building of educators, (3) Partner ecosystem for content, internships/apprenticeships/jobs/capital, (4) Hybrid infrastructure with technology across skill spokes, skill hubs and skill universities (36 Indian Institutes of Skills in state capitals and Union territories), and (5) National Command Control Centre with linkages to India’s 766 Skill Hubs for real-time data, interventions, monitoring of results/impact for skills and jobs creation.

India has renowned experts in the country and abroad. Woo them to provide skills training in India’s 1.5 million schools, 42,000 colleges and universities. Half their time should be spent on train-the-trainer (i.e, existing 9 million teachers) to create core capacity and capability across the learning ecosystem.

The AIMS platform with Skills + Internship = Employability + Entrepreneurship equation must have best-in-class partners for content, internships/apprenticeships, jobs and capital. Government and industry should be joint owners of this platform for cohesive commitment to outcomes, i.e, bridging the skills gap and create jobs at scale.

Cross the checkered flag. Committed long-term finance is critical for the success of AIMS. South Korea provides an apt case study.
After the Korean War (1953), South Korea’s GDP was Rs.4,250 crore. By investing in skills through education and training at 7.5 percent of GDP — 5 percent from government and 2.5 from industry — she grew to a GDP of Rs.153 lakh crore (ROI: 1,300 percent). Today South Korea’s GDP is 60 percent of India’s. Its population is 5 percent of India’s.

India can achieve similar growth if the Union Ministry of Skill Development jointly builds AIMS with State/UT governments and industry, funded through PPP at 0.75 percent of GDP (i.e, Rs.300 lakh crore) annually (Rs.95,000 per learner), 51 percent from government and 49 percent from industry (as commercial investment, not CSR) secured through sovereign guarantee so capital cost is low. Cumulatively, Rs.19.25 lakh crore (2023-2030) can potentially deliver additional GDP of Rs.168 lakh crore in 2030 (ROI: 875 percent).

Skills for job creation at scale is the new infrastructure required to enable India to achieve her potential in a structured way, and become a First World nation in our lifetime.

(An alum of Harvard Business School, Sanjay Viswanathan is founder-chairman of the London-based Adi Group and Ed4All)

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