India 2020: The Skills Problem

One big business in India today is skills development. It is a modern miracle, so much so that a common refrain in education investor conferences these days is the talk of making money out of India's skill development drive, the ultimate bottom-of-the-pyramid magic for stymied training and publishing companies in the West. For private investors, this is where the money is. I have become aware of this painful reality when almost all my conversations about setting up an higher education institution in India invariably turns into discussions on the 'skills opportunity' and the money to be made there.

To start with, I have spent half my working life in the skills development in India and this is why the current frenzy surprises me. I have worked with Aptech first, and then a number of years in NIIT, and between them the two companies grew from nothing to more than 3000 outlets and million learners during the years I worked with them. It was mid-nineties and the work was fun: I almost felt a missionary zeal going into smaller towns and setting up franchised centres. The models and techniques we used were incredibly sophisticated, and the franchises sold like fire. There were those aha! moments all too often, when we would strike gold with one or the other remote centre, which will get fully booked on the day of the launch. The companies made money and we had real satisfaction, of 'changing lives', as Aptech proudly said.

Almost fifteen years later, the whole business of skills development seems to have been recast. The government is paying the bills and an assortment of international players are indeed after the money. The big focus is on rural youth - rightly so - as India has to create opportunities for its young people or will face an existential trouble. However, the novelty of the model this tie around is that the government is paying the bill: As expected, this comes with its attendant problems.

First, the providers need to excel in managing the government rather than being good with its learners. This is the problem even a matured system like United Kingdom faces: In India, this comes with the additional dimensions of cronyism and corruption. 

Second, because there is no market mechanism at play, it is quite easy for skills training providers to end up training for obsolete skills. In the IT training wave, despite the cost of always remaining cutting edge, players like NIIT and Aptech could not rest: The students were demanding results and competition, several rounds of its, were breathing down its neck. In contrast, in the new skills development, students are not customers but beneficiaries, hence they would demand less, at best dropping out rather than demanding their money back. The competitive field also be protected because of the inherent biases of the government procurement systems.

Third, no efforts to create professions have followed the talk about the skills development. India needs skilled plumbers and electricians, but till the time these are not recognised as professions and regulated, there is no premium to be had by learning these professions. And, hence, while that may be the goal of skills development money, it ends up getting spent on computer training, just like the old days, just less efficiently. 

Finally, the government has completely chosen to ignore its own skills development infrastructure, the existing state funded and state supported colleges, in distributing these funds. A deep rooted bias, signifying a two tier education system, is possibly at play here. Tied together with India's ingrained caste system, where one does physical work only when they are born low, it seems that the privileged has the Higher Education and the others have this alternate system handed down by the government. There is no measure of equivalence between the two, and no direct pathways. So, a skilled electrician can never use his skills to the complete a degree in electrical engineering, as would be possible in several other countries.

India needs a vocational training system desperately, but the one it has got now is poorly designed. It is disconnected from the usual schools/ colleges system, and by design, it is about allowing a few privileged providers make money rather than a market based system that allows competition and innovation. The money is being spent without any attempt to create the professions, and therefore, the learners may not want to invest their time into learning a trade. What one sees in this is an ingrained bias against the trade skills and the naivety of middle class policy making, which seems to distort all developmental efforts in India. 

Finally, one would like to see a more unified system of trades and professions, where one has to attain some kind of certification before they can enter the skilled trades of plumbing, electrical work, construction, as well as the modern trades like translation, web design, music technology, digital arts, etc. The whole system should be developed alongside the Higher Education system, with equivalence and pathways clearly designed, and local colleges and high schools co-opted into the business. The system should be based on clearly defined standards - of outcome and of expectations about service levels - and be tied to the standards set by autonomous professional bodies, which will be forced to respond to market requirements. In summary, a rethinking is needed about how India solves its skills problem: Indeed, the current system seems to fall well short of solving any of the issues.


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