The success with skills development in India over the past 2-3 years has been mixed. The lukewarm results are largely due to four reasons: Absence of necessary pre-requisites, soft demand side, early-stage supply side business models and academic and vocational skills development should become Siamese twins. I expect skills development to gather steam by 2014-15 and reach a tipping point as we successfully address the following bottlenecks:
• Absence of necessary pre-requisites: Two pre-requisites are necessary, though not the sufficient condition for take-off for skills development in India. One, the government finalizing its vocational framework and two, formation of Sector Skill Councils leading to occupational standards. The former has been a challenge as both the Ministry of Labour and Ministry of HRD have been working on parallel tracks. Recently, Mr. Ramadorai has been asked to step-in and help harmonize the two competing initiatives. The lack of vocational framework inhibits real careers in skilled jobs. The latter is critical as the Sector Skill Councils must be equipped to advise the government and agree and insist on standards because until this happens, the demand will not take off. In the absence of standards, recruiters continue to hire under-qualified people to save costs.
• Soft demand side: The pressure on the skill development industry has not been much in the last few years, given India’s GDP growth has slowed down and the demand for talent has been soft. We are still in a transitional phase, as the demand for talent has not reached the 2007 high. Since the pressure on the skill development industry is less, corporations continue to rely on their traditional systems for talent development, which they found inadequate even in 2007. Companies running their own “hire-and-train” initiatives such as technology firms like Infosys, TCS and Wipro, BPOs like Genpact and banks like ICICI, have built good human talent supply chains, but most companies are unprepared for the next big upswing.
• Early stage supply side business models: The present scenario can be described as the calm before the storm. As soon as the demand picks up, gaps on the skilling side will start showing a lot more starkly. Entrepreneurs have an opportunity to quickly build up capacity to meet the future demand and mature their business models. There has been no example of skills development initiatives scaling up in the last decade to $50-100 million revenues. While nobody knows if it will happen in the next 12, 18 or 24 months, the tipping point is not too far away in the distant future. There are billion dollar babies waiting to be created. The supply side must be ready to ride the tidal wave.
• Academic and vocational skills development are Siamese twins: The larger skill development problem can be addressed by making vocational and academic education Siamese twins as against the caste system cadres. Students must be able to enter and exit either track, which run in parallel. In academic education too, there are twelve bills, which are pending in the Parliament. This creates environmental uncertainties and people are cautious of investing. Current entrepreneurs are reluctant to expand as they are unsure about how the policy will shape up. New entrepreneurs are diving in only to fail frequently (for example, AICTE announced closure of over 150 colleges last quarter). We need less regulation on capacity building and lot more regulation on the quality side. While there are quality standards for all companies like food products or manufacturing, there is no quality standard for education. This will additionally stop the many degree mills coming up. It is important to allow private entrepreneurs, including ‘for-profit’ educators and foreign investors to come in and invest in education. The ecosystem should enable employers that run large training institutions to convert those into universities. Until we create competition in the academic sector, we are not going to help the skill development cause of the country. The government must let a thousand flowers bloom.
My personal view is that the outlook of skilling is surely bullish in the long term, but the near term is cautious because the necessary conditions are absent. Aspire is addressing several parts of this supply- chain, from K-12 to university education and up to entry-level employees. Our focus continues to be blending hard and soft skills and embedding our award winning curriculum inside educational institutions. Currently, we have five global alliances with Cambridge, Harvard, Carnegie Mellon, Babson and Pearson Group. Cumulatively, we have crossed 52,000 enrollments and 78 customers. Many Aspires will be required to meet the skill development demand in India and India has it in her to seize the demographic dividend.