Academic journal article Indian Journal of Industrial Relations

A Study of Skill Gaps in the Informal Sector

Academic journal article Indian Journal of Industrial Relations

A Study of Skill Gaps in the Informal Sector

Article excerpt


Skill gaps in industry are identified as lack of qualified trained persons as per the perspective of the employer. They could be due to inadequacy in general education levels and or due to inadequacy of technical skills. Most of the developed and the developing countries have been experiencing skills gaps as perceived by the employers. While general education has been the norm in most countries, vocational education has assumed much greater importance now as it plays a central role in building competencies of those entering the job market along with those who are already employed. In that sense, it is the main factor contributing to the efficiency and economic growth of a nation.

While many developed economies have given primacy to vocational education to develop competencies, an OECD study ( jobs) found that it has tended to remain separated from the markets, except in Germany, and has created in the past more gaps between the needs and the available skilled workforce. UK, in particular, followed a model in which primacy was given to general education as a means of imparting technical education. General education and vocational education in UK have also followed separate trajectories where as in Germany these two have been highly integrated. The UK and the German models led to higher proportion of youths with higher levels of general education in the former and those with higher skills in the latter.

In view of the fast paced technological advancements since the 90s, UK as well as some of the other European countries have overhauled their vocational training structure since 2000 to meet the emerging needs of skills in their respective countries

How much has been the role of the government in vocational education has been a matter of debate impacting the outcomes of technical training (Greinert, 1998; Green, 1995; Nelson, 2007; Niemeyer, 2007 as in Pilz, 2012). The available models have been categorized in to the state led model and the market model. The latter has been seen to be an impediment to providing the desired vocational training as the companies train only as per their needs. The state led model has mixed results. While Germany offers the best example of the state led model in which it provides the legal framework, it involves the companies and the power to provide training is devolved to them. In company vocational training on the one hand and the wholly school system, on the other is the hallmark of the German dual system of vocational training (Sussane & Pilz, 2009). France's vocational education system is also state dominated but rooted in schools and colleges. UK's new revamped system provides vocational education in separate vocational institutes.

Australia provided vocational education both by the government funded institutes as well as the private operators although the number and quantum of youths trained in the former have been declining over the years. The private operators have to follow the national learning framework consisting of Australian training framework, Australian qualification framework and industry training packages. The content of vocational training framework is theoretically decided by industry and not by the government or the training providers. Australia also has Industry Skill Councils and the package is owned by one of the councils.

Despite persistent efforts, most of the developed economies of the world and Europe are experiencing both the quantitative and the qualitative mismatches. There are fewer workers available on the one hand and their skills do not match with those required in the market on the other.

Skills Landscape in India

The working-age population in India is 700 million out of the total population of 1.2 billion (as in 2012). Of these 700 million, only 200 million are graduates. 58% of the population is below the age of 30 years.

India has a long history of providing vocational education. …

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