india's demographic dividend - how to exploit

17
1- Shailee Kumar, MBA student at VIM, Pune (9579835079) ([email protected]) 2- Sagar Chavan, MBA student at VIM, Pune (9561083441)([email protected]) 3- Prof. Ajay Parulekar, Professor at VIM, Pune (8983525998)([email protected]) INDIA’S DEMOGRAPHIC DIVIDEND – HOW TO EXPLOIT? Shailee Kumar 1 , Sagar Chavan 2 , Prof. Ajay Parulekar 3 Abstract: Agriculture is being India’s primary business since long time. Even today most of Indians do farming. But the situation is changing. Unlike most other countries, India has switched directly to the service sector from agricultural sector. In doing this, industry sector especially manufacturing sector is totally forgotten. There are diverse views on this leapfrogging of bypassing the industrial sector and shifting directly to service sector. Some views says that as India has bypassed the industry sector India was perfect in it and this is an economic achievement. Other group says that large service sector in developing economies like India indicates inability of government and private sectors to keep up with the increasing rural-urban migration. So, question arises that whether India can become developed nation without having strong industrial base? And the answer is “No”. Economic development of any country requires job creation, improvement of human capital, poverty reduction and increase in the consumption of resources. For this, service sector alone is not sufficient. This will require Re-industrialization in India. The idea is not just to increase the industry sector but to empower all individuals through improved skills, knowledge, nationally and internationally recognized qualifications to gain access to decent employment and ensure India’s competitiveness in the global market. Today, a large section of India’s labor force has outdated skills. With current and expected economic growth, this challenge is going to only increase further, since more than 75% of new job opportunities are expected to be “skill-based.” This Paper speaks about the learning from the models of other countries addressing the issues and challenges of imparting vocational education analyzed to reveal lessons for existing and upcoming participants of this field. Private sector along with government has started contributing in skill development. Such Public Private Partnership Mode (PPP) has started vocational training and education with collaboration of government institutes. Various recommendations for the skill development policy for India are given in the paper. Keywords: leapfrogging, re-industrialization, Public Private Partnership (PPP)

Upload: sagar-chavan

Post on 15-Apr-2017

84 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: India's Demographic Dividend - How to Exploit

1- Shailee Kumar, MBA student at VIM, Pune (9579835079)

([email protected])

2- Sagar Chavan, MBA student at VIM, Pune (9561083441)([email protected])

3- Prof. Ajay Parulekar, Professor at VIM, Pune (8983525998)([email protected])

INDIA’S DEMOGRAPHIC DIVIDEND – HOW TO EXPLOIT?

Shailee Kumar1, Sagar Chavan2, Prof. Ajay Parulekar3

Abstract:

Agriculture is being India’s primary business since long time. Even today most of Indians do

farming. But the situation is changing. Unlike most other countries, India has switched directly to

the service sector from agricultural sector. In doing this, industry sector especially manufacturing

sector is totally forgotten. There are diverse views on this leapfrogging of bypassing the industrial

sector and shifting directly to service sector. Some views says that as India has bypassed the

industry sector India was perfect in it and this is an economic achievement. Other group says that

large service sector in developing economies like India indicates inability of government and

private sectors to keep up with the increasing rural-urban migration. So, question arises that

whether India can become developed nation without having strong industrial base? And the answer

is “No”.

Economic development of any country requires job creation, improvement of human capital,

poverty reduction and increase in the consumption of resources. For this, service sector alone is

not sufficient. This will require Re-industrialization in India. The idea is not just to increase the

industry sector but to empower all individuals through improved skills, knowledge, nationally and

internationally recognized qualifications to gain access to decent employment and ensure India’s

competitiveness in the global market.

Today, a large section of India’s labor force has outdated skills. With current and expected

economic growth, this challenge is going to only increase further, since more than 75% of new job

opportunities are expected to be “skill-based.” This Paper speaks about the learning from the

models of other countries addressing the issues and challenges of imparting vocational education

analyzed to reveal lessons for existing and upcoming participants of this field. Private sector along

with government has started contributing in skill development. Such Public Private Partnership

Mode (PPP) has started vocational training and education with collaboration of government

institutes. Various recommendations for the skill development policy for India are given in the

paper.

Keywords: leapfrogging, re-industrialization, Public Private Partnership (PPP)

Page 2: India's Demographic Dividend - How to Exploit

Introduction

India has gradually evolved as a knowledge-based economy due to the abundance of capable,

flexible and qualified human capital. With the constantly rising influence of globalization, India

has immense opportunities to establish its distinctive position in the world. However, there is a

need to further develop and empower the human capital to ensure the nation’s global

competiveness. Despite the emphatic stress laid on education and training in this country, there is

still a shortage of skilled manpower to address the mounting needs and demands of the economy.

As an immediate necessity that has urgently arisen from the current scenario, the government is

dedicatedly striving to initiate and achieve formal/informal skill development of the working

population via education/vocational education/skill training and other upcoming learning methods.

The skill development of the working population is a priority for the government. This is evident

by the exceptional progress India has witnessed under the National Policy on Skills (2009) over

the years. The objective of the policy is to expand on outreach, equity and access of education and

training, which it has aimed to fulfil by establishing several industrial training institutes (ITIs),

vocational schools, technical schools, polytechnics and professional colleges to facilitate adult

leaning, apprenticeships, sector-specific skill development, e-learning, training for self-

employment and other forms of training. The government therefore provides holistic sustenance

through all its initiatives in the form of necessary financial support, infrastructure support and

policy support. In addition, the private sector has also recognized the importance of skill

development and has begun facilitating the same via three key dimensions — non-profit initiatives,

for profit enterprises, and as a consumer. Currently, there are many skilling opportunities fashioned

by the government, the private sector and collaboration between the two (PPP mode).

The current focus of skill development has shifted to the learner and his/her needs and expectations

from vocational education and training (VET). To empower the working population, is it essential

to start from the source, i.e., the learner. India has the advantage of the “demographic dividend”

which can be cultivated to build a skilled workforce in the near future.

Need of Skill

Skills and knowledge are the driving forces of economic growth and social development for any

country. Countries with higher and better levels of skills adjust more effectively to the challenges

and opportunities of world of work. As India moves progressively towards becoming a ‘knowledge

Page 3: India's Demographic Dividend - How to Exploit

economy’ it becomes increasingly important that the country should focus on advancement of

skills and these skills have to be relevant to the emerging economic environment. In order to

achieve the twin targets of economic growth and inclusive development, India’s Gross Domestic

Product (GDP) has to grow consistently at 8% to 9% per annum. This requires significant progress

in several areas, including infrastructure development, agricultural growth coupled with

productivity improvements, financial sector growth, a healthy business environment, ably

supported by a skilled workforce.

Demographic Dividend

As compared to western economies where there is a burden of an ageing population, India has a

unique 20–25 years window of opportunity called the “demographic dividend.” This

“demographic dividend” means that as compared to other large developing and developed

countries, India has a higher proportion of working age population vis-à-vis its entire population.”

The result is low dependency ratio, which can provide a comparative cost advantage and

competitiveness to the economy. The following table provide a glimpse of the demographic

dividend that India would be able to achieve by 2022.

Sr.

No

Country Total population in

the age group 15-59

years

Proportion of the

age group to total

population of the

country

(%)

1 China 904,481,837 18.9

2 India 861,235,123 18.0

3 USA 195,489,469 4.1

4 Brazil 139,520,976 2.9

5 Japan 64,950,362 1.4

6 Germany 44,408,764 0.9

7 France 37,332,831 0.8

8 UK 38,133,894 0.8

9 Australia 14,420,441 0.3

(Source: Ernst and Young Research, 2012)

Page 4: India's Demographic Dividend - How to Exploit

India has the world’s youngest work force with a median age way below that of China and OECD

countries. Half the population of India was younger than 25 in 2010. It will change to half the

population being under 28 in 2030, making India a very young country for the next 20 years.

Why corporate involvement is important?

Private sector over the years, the private sector has increased its presence in the field of vocational

education in India. Unemployment and underemployment are two of the most serious development

problems currently being faced by the country. The solution to which is a skilled workforce,

developed through quality vocational education and training courses for the learner. The private

sector comes into play here with its ability to match better the demand for workforce by the

industry with a supply of superior skilled manpower. The private sector can contribute to

supplement infrastructure, facilities, technology and pedagogy. There are several roles that the

private sector plays in this domain, namely, as a consumer of skilled manpower, as a non-profit

facilitator of quality knowledge or as a for-profit enterprise providing education.

In the first role, the private sector would deeply benefit by training the available manpower with

appropriate skills and then ultimately employ them. Corporate houses can train learners by diverse

methods and in varied fields such as research and development, academic internships, on-job

training, programs in line with the market demand and several collaborative programs. As a

consumer, the private sector can educate learners with the right balance of academic skills,

analytical skills, attitude and exposure. This approach ensures only industry demanded

skills/expertise being imparted to develop a suitable talent pool.

Today, the private sector plays an important role in proving vocational education and training.

Being a consumer of skilled manpower, the sector is aware of the exact skill set required in

potential employees. This insight and availability of other vital resources enables the private sector

to train learners both effectively and efficiently. Customized courses/programs are formulated with

a curriculum crafted by industry experts to better train and prepare the learner for the changing

requirements of jobs and the entire working environment.

Page 5: India's Demographic Dividend - How to Exploit

Challenges in Skill India

The arguments that problems exist with the supply of skills available in the labor market take

various forms. The most extreme complaint is the idea that widespread shortfalls have been found

in the basic skills of future employees. The cause is usually attributed to the failure of the education

system to provide students with these basic skills. We refer to that position as a skills gap,

following its use in policy discussions. A second complaint focuses more on job-related skills of

the kind associated with particular occupations. We refer to this assertion as a skills shortage. The

final concern, which is much more commonly articulated is the general idea that at any given time

the supply of skills and the demand for skills could be out of synch in either direction: oversupply

or undersupply. We refer to it as a skills mismatch. A skill shortage is obviously a particular type

of skill mismatch, and a skills gap could be a general form of mismatch. All these complaints

collectively can be referred to as skill problems.

The first challenge in assessing the assertions about skills problems is to have a conceptual

framework for understanding the relationship between workers and their skills against employer

needs. One approach, traditionally associated with the topic of internal labor markets and the

academic field of human resources (and, before that, personnel), suggests that matching skills to

job requirements is an employer problem. Over time, employers have internalized the supply of

labor, selecting for general abilities at entry level positions and then training and developing

employees over a working lifetime to meet their specific skill needs. That approach appears to

have eroded substantially in recent years, an issue we return to later in the article. The other

approach focuses on the labor market as the mechanism for meeting employers’ skill requirements.

The idea of job matching between employers and job seekers implies a job search, which typically

assumes that employers have job requirements that are generally determined exogenously and that

employers then go searching for job applicants who have those skills. The search process is

realistically described as two-sided if both employers and employees are looking for a match, and

a good match is one in which the skills of the applicants and the requirements of the job fit closely,

neither a shortfall nor an oversupply of skills relative to those requirements. In typical economics

models of job search, the process is reasonably passive. Employers make offers to job applicants,

who accept the job when the offer matches or beats their reservation price. Employers raise wages

to attract better applicants whose attributes are closer fits for those job requirements, and they

Page 6: India's Demographic Dividend - How to Exploit

lower wages if an excess supply of such applicants exists. The notion of a shortage is foreign to

this model and to most all economics-based models. Indeed, shortages in general are typically seen

as occurring only in the context of market failure, such as wartime wage freezes or restrictions on

mobility, and to be temporary until candidates and employer adjust. In practice, of course,

employers can search more extensively through recruiting activities and more careful selection,

and applicants can search actively by securing better information about vacancies. We also know

that job requirements are not exogenous from the supply of applicants; a shortfall of applicants

that leads to higher wages causes employers, in turn, to substitute capital for labor to create new

jobs with lower skill requirements. Empirical evidence indicates that employers also lower the

skill requirements for given jobs when labor is relatively scarce and raise them when higher-quality

applicants are plentiful.

What is less clear in the typical models is how the supply of skills affects employer decisions on

production systems and, ultimately, productivity. Certainly, “better” workers, who are absent less,

who avoid less, and who work harder, will improve organizational productivity and performance,

even if nothing changes about their jobs. But whether more skilled applicants per se cause

employers to innovate, to adopt more effective practices, or to change the way that jobs are

performed is an open question that is often part of the skill gap arguments. The closest analogy is

with supply chain models where suppliers are trying to produce just the right amount of output to

meet the needs of their clients at the previously agreed price. Skills are seen as coming with the

applicant to the job, and job requirements are absolute, such that candidates either have the

necessary skills to do a job or not and, if not, they cannot do the job. Finally, an important goal for

public education in these arguments, including public colleges and universities, is seen as

providing graduates that employers would like to hire.

Successful Models:

1) Germany Vocational Training (1980s)

German Model of dual training was started with three-fold objective of promoting (1) economic

productivity, (2) social integration and (3) individual development. Developing a skilled labor

force will help promote innovation in business should be main purpose of promoting this model in

other developing countries.

Page 7: India's Demographic Dividend - How to Exploit

Three-fold Objective of German model

Economic Aspect: The Economic aspect of German model refers to the role of vocational

training in ensuring a high level of economic, business and individual productivity.

Economic goal involves development of human resources by ensuring that there are

enough workers with adequate skills, and subsequently increasing their number and level

of qualification. The business goal is to make sure that companies have an adequate supply

of qualified skilled workers. At the individual level, the goal is to ensure that individuals

are employable and able to earn a living. Also important from an economic perspective is

the efficiency of the vocational training system itself.

Social Aspect: The Social aspect of German model refers to vocational training as a means

of promoting the social integration of the younger generation, both in the workplace and in

society at large. A vocational training system should be designed to prevent social

marginalization and integrate young people smoothly into training and employment.

Individual Aspect: The Individual aspect of German model refers to the role of vocational

training in developing the skills individuals need to meet challenges on the job as well as

in other aspects of their life. Vocational training should provide an opportunity for

individuals to shape their own life, develop to their full potential, and increase their self-

efficacy and motivation to learn.

Another purpose of training skilled workers is to promote innovations in the business world. It is

generally agreed that basic innovations are generated by researchers and scientists at universities.

In addition, there are so-called “incremental innovations” – the small, everyday process

improvements that are not produced by great inventors, but are rather the result of thoughtful

problem-solving by the people who implement and test new processes and products on a daily

basis. Such incremental innovations are achieved when well-trained, skilled workers not only

perform their assigned tasks, but also identify, describe and solve problems in innovative ways, in

a process that leads to steady improvement.

Page 8: India's Demographic Dividend - How to Exploit

Approach of implementing this model:

This model should not directly implemented in all the areas. Rather it is proposed to

introduce first in business sectors or industries where conditions are favorable. First focus should

be on the priority areas and not entire range of objectives.

Strength:

The system offers qualifications in a broad spectrum of professions and flexibly adapts to the

changing needs of the labor market. The dual system is especially well-developed in Germany,

integrating work-based and school-based learning to prepare apprentices for a successful transition

to full-time employment. A major strength of the dual system is the high degree of engagement

and ownership on the part of employers and other social partners. The VET system as a whole is

well-resourced, combining public and private funding. Germany has maintained strong financial

support and maintained the apprenticeship offer for the VET system even during the crisis.

Germany has a well-developed and institutionalized VET research capacity, including the Federal

Institute for VET, and a national network of research centers that study different aspects of the

system to support continuous innovation and improvement in the VET system.

Challenges:

The transition system, now serving nearly as many young people as the dual system, suffers from

undue fragmentation and an absence of transparency. Despite the very substantial resources

devoted to the system, too few program participants make a successful transition into the regular

VET system. Career guidance seems highly variable across the Länder, with no single agency

responsible for assuring delivery of quality information and guidance services to all students.

Some students leave compulsory school with weak core academic skills. The VET system is not

currently organized to ascertain whether this is in fact a problem or, if so, to address it. The

evaluation of dual system students at the end of their apprenticeship is dominated by the Chamber

exam. Because their school performance does not count in the Chamber exam, students may not

take their schooling seriously, thereby limiting their ability to participate successfully in some form

of tertiary education. Although Germany has recently opened more pathways from upper-

secondary VET to tertiary education, to date very few VET graduates have made use of those

Page 9: India's Demographic Dividend - How to Exploit

pathways. Shrinking cohort numbers due to demographic decline is providing an important

contextual challenge.

2) Singapore Model

Singapore is best known example for successful and continuous upskilling of its workforce

since last 40 years. The Singapore model, which run in PPP mode, appears to change the typical

statements that governments are poor at organizing and administering skills development,

particularly on a national scale. In fact it has provided rare but great examples of collaboration of

private and public sector in upskilling.

Success of Singapore model was influenced by following factors.

1. Linkage between Economic development and Skill Development:

Phase 1: Import Substitution Industrialization: 1959-1965

This phase marked the start of reforming of the educational institution, restructuring of vocational,

technical and managerial education. This phase involved establishment of supremacy of the EDB

as the prime mover of the Singapore model.

Thus, this phase marked the beginnings of education reform, extension of vocational, technical

and managerial education, and established the supremacy of the EDB as the prime mover of

Singapore’s industrialization strategy, and therefore also as the principal institution responsible for

the coordination and supply of manpower to meet Singapore’s manpower needs. However, during

this phase, the EDB focused only on the national level, and not on the industry or firm levels.

Phase 2: Export Oriented Industrialization: 1966-1973

The EOI strategy was predicated on attraction of foreign investment through a variety of

incentives, and Singapore offered incentives, reasonably good infrastructure, and cheap labor and

stable industrial relations climate as inducements to foreign companies. The primary focus of skills

development efforts was the urgent need for increases in technically trained manpower, both

generally for the success of the of the EOI strategy, but also specifically to meet the needs of the

emerging export industries, particularly in view of limited success of the previous five year plan

regarding technical education. Under this system, the EDB provided foreign companies like Tata

Page 10: India's Demographic Dividend - How to Exploit

(India), Rollei (Germany) and Phillips (Netherlands) the finance and infrastructure to set up

training centres to which the companies would contribute instructors and software.

These schemes served three important goals: the provision of training that was not available in

Singapore, the establishment of regular contacts with foreign firms, and through these contacts, to

induce foreign firms to invest in Singapore. This was the beginnings of the integration of skills

and foreign investment and technology transfer. Within three years of the establishment of

vocational training schools under the Industrial Training system, technical education enrolment

had increased by a 1000%.

Phase 3: Evolution towards Technology Intensive Export Oriented Industrialization: 1973-

1984

The success of the export oriented industrialization strategy resulted in both a tighter labor market

and rising wages. And increased competition from lower cost Asian neighbors such as Malaysia

forced the EDB to re-conceptualize its economic development strategy. A critical aspect was the

need to continue to attract foreign investment, but to make sure that the foreign investment would

be higher quality, i.e. more technologically intensive investment that would be able to use the

higher cost Singapore labor. Thus, the shift contemplated was from labor intensive manufacturing

for export to a higher value added technology intensive industrialization for export.

The critical need during this phase was for the continued expansion of general skills (vocational

and technical training for industry in trades such as machining, fitters, electricians, welders) as

well as the need for more specialized skills germane to the industries that were growing as a result

of foreign investment. The primary initiatives during this phase were: the reorganization of the

structure for technical and commercial skill formation, establishing foreign company and country

sponsored training centers, reforming the educational system, and setting in place incentives to get

corporations to invest in skills upgradation. A final initiative during this phase was the effort of

the EDB to shift some of the responsibility for upskilling onto the private sector. At the corporate

level, the EDB tried to encourage companies to invest in training, through the (ITGS) Industrial

Training Grant Scheme (the forerunner of the Skills Development Fund.

Phase 4: Economic Diversification: 1985 - 1996:- Consolidation and Restructuring of

Skills Development

Page 11: India's Demographic Dividend - How to Exploit

By the mid1980s, Singapore was already a leading high-technology, and high wage goods

producer in Southeast Asia. And much of the preparatory work in terms of establishing continuous

skills development had already been put in place during the last phase. The economic development

goal of the EDB for the 1990s was to make Singapore a regional business and financial hub.

Consistent with this longer term vision, the EDB reconsidered its approach to skills generation.

One key finding was that the depth and breadth of technical skills necessary for the

accomplishment of this vision could not be achieved through the existing model of single country

dominated institutions or a single company dominated institution. In other words, the manpower

needs of the new and emerging knowledge and technology intensive industries would require

resources and expertise in excess of what a single partner could provide.

What emerged from these is a series of initiatives to organize technology centers that were centered

around the needs of one industry, through joint cooperation with various multinational companies

who had invested in Singapore.

Phase V: Towards a Knowledge based Economy

In the 1990s, the focus has been on the shift from factor driven growth to innovation driven growth

i.e. from capital based industries to knowledge based industries. In this phase, the EDB pushed the

corporate to increase the expenditure on training of the employees and retraining of the older

workforce. The way in which these goals are to be realized are still evolving, but already there is

a massive promotion of On-Job-Training (OJT) in companies through the Productivity and

Services Board which has created a system of model OJT companies that are to be emulated by

the rest.

Above discussion shows that there is an evidence of strong correlation between the economic

development needs and the skills development efforts by a country. It needs to be coupled with a

constant striving to meet industrial needs through quick short term solutions as well as some degree

of long term planning. We feel that this congruence is an essential prerequisite for the success of

any skills development policy, although not sufficient.

2. Skill development Funds:

No discussion of the Singapore system will be complete without a discussion of the Skills

development fund, largely because it is this institution that has been touted as model for other

Page 12: India's Demographic Dividend - How to Exploit

countries. The essential element of the SDF system is that it represents the Government’s efforts

to pass on responsibility for skills upgradation to the private sector. The government-private sector

partnerships established by the EDB implicitly in its model of technology transfer was limited to

MNCs but the SDF was targeted towards all Singapore businesses.

3. Long Term Skills Development: Education Policy

Successful skills development requires long term investments in education as well, given the

considerable research on the impact of education in economic growth. In Singapore there have

been two major reforms of education policy. The first was during the beginnings of import

substitution industrialization soon after independence (discussed earlier) and the second was

during the transition from low cost EOI to advanced EOI. The move towards a more technology

intensive export orientation coupled with the initiatives for training forced the government to

rethink its education system, to recheck whether the education policy planned earlier was still

relevant to the recent developments.

Hence the New Education System (NES) was established. This NES have underlying rationale,

for one, it introduced much flexibility in Education System and finally, this education system

channelized the student, who showed less interest in further education, into the vocational

education. The NES was designed to accommodate students at different paces of learning, as well

as providing them with different options of learning. The System also ensured, like German

System, that those who take up vocational course would then directly will directly enter into

vocational or apprenticeship training in the organization.

4. Institutional Involvement:

A crucial ingredient in the success of the system is the way in which these institutions work in

practice. The system operates at several different levels, including education systems, training for

managers, training for high-level technical skills, training for lower level technician skills, training

for blue collar workers and older workers, and training for productivity improvement.

The government has continually reshaped institutions to maximize effectiveness.

Page 13: India's Demographic Dividend - How to Exploit

In the next section, we try to understand the current initiatives taken up by Public / Private parties

in India under the Skill India drive.

Initiatives under ‘Skill India’:

In addition to the corporate houses and education institutes, several other entities have come

together to create a framework for vocational education and training in India. The figure below

expands on the current Indian VET space.

Organization Types Organization Names Scope

Industrial Associations International Labour

Organization

World Bank

European Union

Voice the needs of the

market

Voice opinions on

relevant policies

International Bodies International Labour

Organization

World Bank

European Union

Advisory role to

government bodies.

Provide essential funds

Private Players IL&FS Education

India Can

India Skills

Bharti and many More

Provide funding Develop

Vocational education

training institutes

(Source: FICCI, Sept 2012)

PPP Model:

The private sector, in association with the government, will work to identify and quantify skill

deficiencies in their respective sectors and constitute a sector plan to address these deficiencies.

The National Skill Development Corporation or National Skill Development Trust is entrusted

with the job to identify areas where support and implementation will be required from the

government. NSDC has identified 21 high-growth sectors (including the unorganized sector) to

provide expanded employment. It has 10 high-growths sectors on the manufacturing side and an

equal number on the services side. Of these, manufacturing, textile, construction, automotive, retail

and health care are the key focus sectors.

Page 14: India's Demographic Dividend - How to Exploit

Attributes Urban Rural

Availability The skill training

provided by

institutions is not job

oriented.

The training courses

are selected by the

learners based on the

availability of seats

rather than their

competencies.

There is a lack of

awareness about

certain trades, with

only a few trades

attracting the majority

of the learners.

It is difficult for

private institutions

that impart the latest

skill development

training to set up on

account of various

constraints and

regulations.

Low quality of

education standards

and high dropout rates

in rural schools create

learners with low

educational

qualifications.

There exists a major

gender bias toward

women in obtaining

vocational training.

Even though a

significant majority of

the employment exists

is in the informal

sector, training and

other related

interventions are not

geared to the needs of

this sector.

Accessibility

Poor urban learners

are unable to join

courses at private

training institutes as

they charge high

training costs.

Rural youth miss out

on the opportunity on

industrial training

sponsored by various

local and government

agencies of urban

areas.

There are a less

number of training

institutes in rural

areas.

The rural learner

incurs a higher

expense in obtaining

Page 15: India's Demographic Dividend - How to Exploit

training from urban

centres.

The cost of acquiring

job information is high

for the rural youth.

There is limited access

to job-related

information or skills

that are currently in

demand.

There is a lack of

proper guidance and

counselling for skill

development.

Adaptability There is a lack of a

common national

qualification

framework that sets a

competency

framework for

affiliation and for

accreditation.

There is a lack of a

common national

qualification

framework that sets

competency

framework for

affiliation and for

accreditation.

Acceptability There is a lack of

quality training

infrastructure in

poorer areas of large

cities and small urban

centres.

Rural areas lack

qualified trainers.

The ICT Infrastructure

is poor in rural areas.

There is a need for

rural broadband

network, which can

assist in skill training

for rural learners.

(Source: FICCI, Sept 2012)

Page 16: India's Demographic Dividend - How to Exploit

Recommendation:

Based on German Model

Ensure that skilled students will enter into the enterprise only after completing education. Make

partnership with the companies to provide apprenticeship training to the student after the

completion of education.

Create an infrastructure at national, state, company and individual level that will regularly check

and balance short term plans.

Based on Singapore Model

Initiate Thinking Skill Program to encourage better thinking at school level and above. The

objectives of the thinking skills program should be to improve creativity and lateral thinking.

Skill Development Fund: Government should promote private parties to increase the expenditure

on skill development. Introduce a scheme of national training awards to the institutes that spends

more on workforce training.

Reform current educational system to provide options of learning and education as per interest of

the student.

Reform current education board or establish Skill Development Board (SDB) which will provide

skill education and will promote private institutions to impart skill programs.

Conclusion:

This paper focuses on approaches that can be adapted for skilling India’s Demographic dividend.

The paper includes study of successful models of Germany and Singapore. While doing

background research for this paper, we came across various models as proposed and adopted by

other countries and many of which have been successful. We decided to concentrate on two

countries viz. Germany and Singapore. One represents the most developed European nation

whereas the second represents the most advanced Asian economy. We felt that a combination of

these two models be of significance to a developing country like India. Further, these models are

recognized worldwide and are extensively used. However an in-depth study of few more countries

and their skilling models can definitely help us decipher few more dimensions which might have

been missed out. Still on our part, we believe that the recommendations made in this paper will be

of use to other researchers as well as practitioners.

Page 17: India's Demographic Dividend - How to Exploit

Reference

1) http://www.nsdcindia.org

2) http://www.skillindia.gov.in

3) Knowledge paper on “Skill development in India” – Learners First Sept, 2015 by Ernst and

Young

4) “Skill Gaps, Skill Shortages and Skill Mismatches: Evidence and Arguments for the United

States” by Peter H Cappelli, March 2015

5) “How Do Nations Develop Skills? Lessons from the Skill Development Experiences of

Singapore” by Sarosh Kuruvilla and Rodney Chua, January 2000

6) A report on “Vocational Education and Training in Germany Strengths, Challenges and

Recommendations” by OECD, Sept 2010

7) A report on “Germany’s dual vocational training system: a model for other countries” by

FICCI and IMaCS, August 2010

8) “The India Skill Report 2014” by CII, Wheebox and Peoplestrong