ABOUT: NextGen companies as well as managers find the skills of today's youth hopelessly inadequate to cope with the challenges of the future. As corporate India grapples with the 'Educated Unemployable' with a flurry of private skilling campuses, their effort barely amounts to a drop in the ocean. Manish Sabharwal, co-founder and Chairman, Teamlease Services - a temporary workforce and skilling company - and a member of India's Central Advisory Board of Education explains why skilling needsto be the future of education in India.
Currently, India has 20 million young adults pursuing a degree in a physical classroom, five million getting their degrees via distance and online courses, four million pursuing vocational education, while only 400,000 are apprentices. Is this system architected to cater to the one million youth who will join the workforce every month for the next 20 years? More importantly, what can we do to ensure our education system delivers the employment outcomes that many of these graduates seek?
Before we dive into answering these questions, it's important to remember that college isn't what it used to be; 31 per cent of retail sales clerks in the US now have a college degree (up from 1 per cent in 1970); 60 per cent of taxi drivers in Korea have a college degree (up from 1 per cent in 1990); and 15 per cent of high-end security guards in India now have a college degree (up from 1 per cent in 2010). But it is also important to not be patronising about the pursuit of degrees; vocational training is usually for other people's children, not ours, and going to college seems to rationally matter beyond the traditional shaadi requirement of degrees; Michael Spence got his prize for work on value of the signalling value of higher education. In other words, being from IIT is more valuable than being at IIT.
Indian higher education must make the leap that classical physics (discrete systems) made to quantum physics (everything is interconnected) by thinking harder about the deep connections between the 3Es - education, employment and employability. Our college system must recognise Peter Diamond's work on search costs in labour markets. A country like India, where over 50 per cent of the labour force works in agriculture, needs to think about the work of Arthur Lewis on the wage impact of the accelerating farm to non-farm transition. The work of Gary Becker is important in thinking about financing skills and education; it is unrealistic to expect employers to manufacture their own employees. And, higher education reforms must be inspired by the work of Robert Solow who found that increase in employment and capital stock only explained a tenth of long-term economic growth with the rest being technological innovation.
Third, we need to use recent amendments to the Apprentice Act to rapidly increase our apprentices (India only has 400,000 apprentices, while Germany has three million and Japan 10 million. More importantly, we need to give academic credit for apprenticeship so that the learning-by-doing and learning-while-earning also enables lateral entry into the degree modularity ladder. Fourth, we need to end the apartheid against distance and online learning; all universities must be allowed to freely sign up students nationally and UGC must end its dated war against off-campus centres; we need all the capacity we can get. Of course, technology has been a disappointment; we all know technology matters in education we just don't know how. But as economic historian Carlota Perez suggests in her book Technological revolutions and Financial Capital, technology innovations take much longer to become useful than we think, but we are probably a few iterations away from something that works. More importantly it is unfair that global MOOC (massive open online courses) like Coursera, Edx and Udacity can freely sign up students in India but Indian universities cannot operate outside their state. Fifth, we need a massive deregulation of higher education by ending the current regulatory regime. We need to encourage more biodiversity in institutional forms and innovation in delivery; the current system leaves little space for either.
Two different regulatory regimes have led to substantially different outcomes because we produce 1.5 million engineers, but only 35,000 doctors every year. Arguably anybody who wants to be an engineer can be an engineer and the glut is now leading to an improve- or-perish equation for engineering colleges. India needs 100,000 doctors every year and the lack of competition keeps fees unreasonably high. Quantity is leading to quality in engineering and we need to replicate this across many other areas.
Currently, our education regime is overregulated but under-supervised and we need to reimagine the role of regulators like UGC and explore university partnerships in some areas with the new sector skill councils. Sixth, we need to convert our employment exchanges to career centres that offer counselling, assessments, apprenticeships, training and job-matching. Universities have not established strong connections with employers, and career centres could become this vehicle. Seventh, we need massive labour reform; an employment contract that is the equivalent of marriage without divorce means that 90 per cent of our labour force works informally. It also means that our 63 million enterprises only translate into 14,500 companies with a paid-up capital of over Rs 10 crore. The lowest hanging fruit in labour reform is the economic insanity of a regressive benefits regime that mandates a 45 per cent salary deduction for employees with the lowest wages; exactly the point of entry for one million youth into the labour force every month.
The budget announcement creating competition and choice in PF and ESI has so far been ignored by the Ministry of Labour but needs to be operationalised quickly. But we need a broader and radical overhaul of our labour laws that will reduce the costs of formality but raise the costs of informality; formal high productivity jobs at the exit gate of our higher education system are fast becoming the binding constraint for India's productivity. Eighth, we need a lot more decentralisation to state governments. States like Rajasthan, Madhya Pradesh and Maharashtra are making moves to make their states fertile habitats for job creation and 29 CMs are more important for jobs than one PM. There is no such thing as India's labour and education market and handing funds, functions and functionaries to state governments. Ninth, we need to create an open but well-supervised regime for foreign universities to operate and compete in India.