India’s Skill Challenge

India’s higher education comprises 993 universities, 39,931 colleges and 10,725 stand-alone institutions. That’s over 50,000 institutions adding over 3 million graduates and post-graduates to the Indian workforce every year. Yet our gross enrolment rate (GER) is at just 26% in the 18-23 age group. The GER must improve drastically to increase the overall talent pool. But for now, let us look at the quality of the current output of our higher education system:

1. The visibly prominent IT industry hired a net number of 2.1 lakh people this year. According to NASSCOM, only 25 percent of technical graduates and 10-15 percent of other graduates are considered employable by the IT and ITES segments.

2. As many as 60% of the more than 8 lakh who graduate from the country’s engineering colleges every year, remain unemployed, according to data from the All India Council for Technical Education.

3. According to an estimate from All India Management Association (AIMA), every year, only about 60% of 3.5 lakh-plus management graduates find management jobs.

It is apparent that the higher education system that we have created does not produce adequate employable young people. The system continues to focus on inputs to the exclusion of outcomes. Even in an economy which is admittedly not adding adequate new jobs, corporates are forced to operate in a talent starved environment. The thin slice of excellence that came out from this system helped the country to create a couple of world-class sectors over the last couple of decades. Adding a few more IITs and IIMs is not the solution for a country which today boasts of the largest share of young, working age population. The much talked about demographic dividend is in real danger of slipping into a potential nightmare.

While there are no easy answers, it is clear that industry has to play a much more proactive role for this to change. Industry bodies must work with the higher educational institutions to skill the Gen-Zs to enable them to prepare for the right job and career. To paraphrase an article from HBR, companies, not colleges, are better at merging real-life work experiences with education. “If businesses are really serious about securing a stable pool of future employees, they are going to have to invest in young people more comprehensively and earlier. Research shows that successful employment programs provide not just technical training and job opportunities but also mentoring and real-life skills.” (source: HBR)

There are some efforts being made to fill this gap in the technology sector. But even this is too little for the needs of this important industry. In the non-tech sector that accounts for about 80% of the additional headcount annually, institutional efforts to address this are few and far between. There is a huge information gap currently between employers, workers and educational institutions. While employers know the skills they need, the educational institutions lack both this information and the capacity to impart these skills. A 2018 report by The Council of Economic Advisers of the US government speaks about almost similar challenges in re-skilling America. If this is true in the most modern of economies, this should atleast reassure us that our diagnosis is right and we must push ahead faster with the treatment.

While government can and must play it’s part, true transformation is possible only with the full involvement of all stake-holders. While our popular discourse is focused almost completely on the education system to figure the way out, as stated earlier too, industry has the bigger role to play. Colleges on their part though, must become more open to ideas and innovation. Parents must stop pushing every kid for a B.Tech and MBA, and the Gen-Zs must stop thinking about the elusive sarkari job. While anecdotally I believed otherwise, I was surprised to read a YouGov-Mint survey recently that 8 out of 10 millennials want more public sector jobs. Reality check – the Union Budget estimates the public sector to add just 24,000 jobs in 2020-21!

Hopefully the Gen-Z is different from the millennials and they will be ready for a life-long learning curve. Some may not want to stick around in the same job while many more will become redundant without timely and adequate up-skilling or re-skilling. This will not just be an economic disaster but a social issue too.

The issues noted here are not new and some steps are indeed being taken by various stakeholders. But we need to move this to the forefront of political and public agenda. Till then we can only hope that somehow the economy finds it’s bearings and starts hitting the elusive double digit growth figures and this will in turn drag the education sector along. For those who do not believe in the jugaad theory, let’s join hands and do something about this.

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