Private Sector in Vocational Education

By Sharma, Neeti | Indian Journal of Industrial Relations, January 2014 | Go to article overview

Private Sector in Vocational Education


Sharma, Neeti, Indian Journal of Industrial Relations


Introduction

A million people will enter the labour force in India every month for the next 20 years. This could lead to a potential disaster unless we create a powerful infrastructure and provide easy access to education and skills opportunities. And access comes from the 3Es (Education, Employability and Employment). Our vocational skilling system needs to deliver quantity, quality and inclusiveness and develop a trinity of cost, quality and scale in the skilling system.

53% of the employed youth in India suffer some degree of skill deprivation while only 8% of the youth are unemployed. 57% of India's youth suffer some degree of un-employability. The 82.5 million unemployable youth fall into three skill repair buckets:

Last mile repair (< 0.5 years) 5.3 million

Interventional repair (0.5-1 year) 21.9 million

Structural repair (1-2 years) 55.4 million

Last mile repair above suggests, simple training in certain basic business etiquettes, communication skills, soft skills and certain generic skills which many of the educated people take for granted, be it even as simple as 'how to wear a tie'. This is exactly the kind of training which a candidate will get if he is given access to the workplace via apprenticeship programs. The source of the problems lies in the mismatch between demand and supply; 90% of the employment opportunities require vocational skills but 90% of our college/ school output has only bookish knowledge. High dropout rates (57% by Grade 8) are incentivized by the low returns of education; 75% of school finishers make less than Rs. 50,000 per year. The poor quality of skills/ education shows up in low incomes rather than unemployment; 45% of graduates make less than Rs 75,000 per year. The situation is becoming more urgent because agriculture is unviable; 96% of farm households have less than 2 hectares. 70% of our population and 56% of our workforce produce 18% of GDP. Demographics can be a dividend or a disaster because 300 million youth will enter the labor force by 2025. In fact 25% of the world's workers in the next four years will be Indian. We also believe that our 50% self-employment rate does not reflect entrepreneurship but our failure to create non-farm jobs and skills. The skill deficit hurts more than the infrastructure deficit because it sabotages equality of opportunity and amplifies inequality while poor infrastructure maintains inequality (it hits rich and poor equally)

The solutions will lie in fixing the challenges of "Matching demand with supply (Employment Reform)", 'Repairing supply for demand (Employability Reform)" and "Preparing supply for demand (Education Reform)".

There are various reforms that can completely overhaul not only India's human capital ecosystem but its whole economy at a cost far lower than what the current policies entail.

Three Buckets of Reform

Broadly put, there are three buckets of reform:

a. MATCHING (EMPLOYMENT REFORM): Better matching the available supply to the demand by removing the various market failures in India's employment/labor markets. This includes removing legislation that breeds unorganized employment, increasing the efficacy of within and across state infrastructure like employment exchanges to connect job seekers with employers, and much else. Most change in this bucket will be pivoted around a review of labor laws and labor infrastructure.

b. MISMATCH (EMPLOYABILITY REFORM): This World--repairing or fixing existing human capital for emerging requirements of a rapidly growing economy. This is particularly important for the people already in the labor force in low productivity jobs or students who have finished formal education that did not give them the skills to get or keep a job.

c. PIPELINE (EDUCATION REFORM): This is about re-orienting our education system to one that focuses on "learning for earning". The current education system has many issues around regulation, curriculum, teacher training, etc. …

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