One of the key hindrances to India’s accelerated growth is the lack of “employable” and “skilled” youth in the economy. This article helps readers comprehend the problem alongside the job market and then understand the initiative their government is undertaking to address this problem.
Did you know that nearly half of all graduates in India lack the necessary skills for employment? According to the “National Employability Report” by Aspiring Minds, approximately 47% of Indian graduates are considered “unemployable” in the knowledge economy due to their limited English proficiency and cognitive abilities.
Moreover, a report published by Accenture highlights that India’s GDP could potentially miss out on over $1.97 trillion if the country fails to keep pace with global advancements in technological skills.
To ensure the progress and growth of any economy, it is crucial to promote employment opportunities and advancements in both the manufacturing and services sectors. Typically, when the output of goods and services increases, the employment and overall strength of the economy also increase. One key factor in output is labour productivity. Labour productivity refers to the efficiency of workers in the economy and can be calculated using the formula: total output divided by total man-hours.
What is the crux of the problem?
When it comes to the job market, there is a significant opportunity for disruption and change. In the current job market, there is an acute discrepancy in the skills required by enterprises and the skilling (or lack thereof) delivered by Indian educational institutes (either senior education or higher education). The current educational system relies on theoretical knowledge and “specialisation” driven learning, whereas the requirements of “high-quality” jobs rely more on cognitive, communication, and soft skills. Additionally, as technological advancements are making significant changes in the job market, one must be a “generalist” rather than a “specialist” in the new world order. In essence, the absence of multi/inter-disciplinary learning in Indian higher education institutions (undergraduate and post-graduate) and high schools (10–12th classes) represents one of the key disparities in the job market. The problem of the lack of relevant and flexible skills was emphasised in a report produced by the International Labour Organisation (ILO) in 2019, wherein it was revealed that the Indian economy would have a deficit of more than 29 million skills — a fact that could slow India’s quickly growing economy.
The unemployment rate is the proportion of unemployed persons in the labor force. Unemployment adversely affects the disposable income of families, erodes purchasing power, diminishes employee morale, and reduces an economy’s output. Source: Investopedia.
The evolving nature of the job market.
Due to advancements in science and technology, manufacturing processes are becoming more streamlined and efficient and rely less on human workers and more on capital. These advancements require a skilled workforce that can operate, maintain, and leverage the potential of machines. However, such skilled workers are currently scarce in the job economy.
Vocational training: this sort of training helps an individual develop technical skills for an explicit job or trade. An example of this training is a person who repairs phones or laptops. In prime minister Modi’s mission of “Skill India” launched in 2015, vocational and technical training has been a central pillar to the initiative. However, an article from The Print stated that more than 84% of Indians in 2020–21 did not receive any VTT (vocational and technical training). Vocational training had the potential to improve India’s labour productivity as well as give a significant boost to the manufacturing and services sectors of the country. The initiative behind vocational training requires significant awareness campaigns by the government of India (think something similar to the Swacch Bharat campaign). Additionally, an older article by the economic times (from 2018) states that 60% of candidates and employers find vocational training ineffective due to the poor quality of instruction. Please note that this is 2018 data (not at all recent).
Rapid Technological Advancements in the services sector: the sector is dynamic in nature and needs constant upskilling or re-skilling. This is something which Indian infrastructure has been largely inadequate in assisting with.
AI, blockchain, cyber-security, etc are in-demand skills but Indian start-ups and youth have not fulfilled the demand here representing a significant opportunity given the technical and academic potential of Indian students.
What are some emerging opportunities in the job market?
The current job market is evolving at an unprecedented rate as I stated earlier in this article. Along with the market’s evolving nature, there is also potential for new opportunities in the market. There are broadly three different sectors where there is noteworthy potential for development:
The green economy: a role wherein individuals address issues like climate change and the development of green infrastructure.
Care has driven: roles that care for vulnerable segments of the population such as elderly assisting services, telehealth, etc.
Digital: roles that leverage advancements in AI, data analysis, etc.
A.I driven roles (deserves its own article) like prompt engineering, generative A.I., predictive A.I., etc. The emergence of generative A.I like Chat GPT, and Google Bard, which are relatively small when compared to the overall potential of other aspects of the A.I. show.
In case you did not know, A.I. stands for artificial intelligence. According to IBM, “At its simplest form, artificial intelligence is a field, which combines computer science and robust datasets, to enable problem-solving.” Examples you may have used include the recommendation algorithm of Instagram and Google or tools like ChatGPT or midjourney.
What are the steps your government is taking to address this issue?
Your government has launched the “Skill-India” initiative which aims to skill more than 400 million people in India. This initiative has a flagship program known as the “Pradhan Mantri Kaushal Vikas Yojana” which aims to incorporate the following:
Source: Bajaj Finserv
What are soft skills?
Soft skills are personal attributes that enable someone to interact effectively and harmoniously with other people. These skills are important in almost all high-quality jobs these days and are vital for one to have if one wishes to improve their quality of life and boost their productivity. For example, if you are a U.I/U.X developer, it is important for you to have the soft skill of communication to understand the needs of the clients and effectively recommend a successful design solution.
2. Development of the “National Skill Development Corporation” (NSDC): NSDC aims to promote skill development by catalyzing the creation of large, quality and for-profit vocational institutions. Further, the organisation provides funding to build scalable and profitable vocational training initiatives. Its mandate is also to enable a support system which focuses on quality assurance, and information systems and train the trainer academies either directly or through partnerships. NSDC acts as a catalyst in skill development by providing funding to enterprises, companies and organizations that provide skill training. It also develops appropriate models to enhance, support and coordinate private sector initiatives. Source: NSDC.
I personally found their portal extremely interesting and useful. I encourage you to check it out.
3. NEP 2020 (National Education Policy): the national education policy is believed to be an excellent policy which can (if implemented) change the outlook toward skill development in India. Overall, the policy aims to foster skill development, eliminate poor systems of learning and facilitate more practical learning and aims to increase multi-disciplinary learning in higher education institutes and also facilitate more flexible course selection in universities. You can read a summary of the report here.
4. Boosting private sector cooperation in the skill development space by incentivising the sector and de-regulating the space. Multiple skilling-related start-ups like BridgeLabs and UpGrad have popped up in the last few years which have helped in addressing the skilling gap in the Indian market. Read more: https://yourstory.com/2022/05/edtech-startups-imarticus-upgrad-simplilearn-corporate-gurukul.
5. Boosting the budget for skill development and the addition of A.I.-related skill training.
Conclusion
To conclude, the government of India has taken several steps in the right direction to address the skilling issue. As a matter of fact, policies like what I stated above have enabled there to be leaps in the state of employability in India. This year, the Indian Skill Report stated that employability has increased to 50.2% from 46.2% overall and the percentage of employable women has increased to more than 52%. While these schemes are working, there is scope for improvement. A few policy-related solutions from my end would be increasing the awareness surrounding the “environmental tech” related jobs as well as boosting awareness about the opportunity of “environment and sustainability solutions” start-ups in India. Additionally, it is important for there to be good oversight and due diligence concerning the quality of courses being offered to promote sustainable skill development. Lastly, the government needs to foster its own start-up ecosystem (like it has been for the past few years) to enable the development of tools like CHATGPT in India itself and reduce brain drain. A lot of India’s talent is going abroad due to the lack of opportunities and there needs to be job generation and investment in India itself to enable this.
Written by Neil Sudhalkar.
Hi, I am Neil and I love learning about public policy and economics. I also love conducting research and learning about new topics in the sphere of A.I., geopolitics, start-ups, and more. Please do reach out to me by sending me an email at neilsudhalkar@gmail.com.
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