Skill development : Capitalizing on our demographic dividend


Indian_RupeeIndian economy is complex, but a really interesting one. While we fail to match up to global averages in conventional sectors, we end up gaining from unexpected arenas – 1500 crore rupees were  earned by exporting hair in the last fiscal. Fascinating, isn’t it? Well, let’s dig deeper into our demographics to unravel even more interesting facts.

The problem and the opportunity

More than 50% of our population is in the age group of 15-59 years. With such a young population, we have a huge demographic dividend waiting to be capitalized.  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. This places India at a huge strategic advantage against other developed nations and a huge window of opportunity for fuelling economic growth.

But unfortunately we haven’t been able to harness this capital. Why? Let’s have a look at the problem now. For better understanding of the stats, let’s relate them to figures we internet users are familiar with.

1. India has 93,000,000 active Facebook users. Well, though every person you know on this planet has a Facebook account, the number of users actually is only 7% of our population. This can give you an idea of how huge our population is and that the majority of it isn’t bothered by the discussions we have on social media sites and by the videos that go viral.

2. According to a Ernst and Young study, 51% of this working age population, i.e 363,546,589 people, require some form of vocational/skill based training in order to make them more employable. ( The number of FB users is a mere 25% of the number of people who need skill development training in order to get jobs)

So while we are growing at an unprecedented rate in few aspects, we are way behind global standards in others. A report by FICCI (Federation of Indian Chambers of Commerce and Industry) and Ernst & Young shows that India has fewer than 10,000 vocational training institutes with a capacity of just 1.3 million. Just a tenth of those looking to join the workforce receive any training, as compared to 60%-96% of workers in developed nations in Asia and the West.

Because of lack of necessary training facilities, potential workers are either unemployed or underemployed while industries are being forced to employ untrained youngsters whose number and quality doesn’t match their requirements. Automobile, construction, retail, healthcare, banking, electronics hardware, media, tourism and IT are few of the sectors that are in immediate need of skilled workers.

The solutions

The government and industry leaders have finally woken up to the pressing need of skill development and its role in economic development.

The Ministry of Labor & Employment(MoLE) is running various schemes and has set up industrial training institutions across the country. In addition, the National Skill Development Corporation India(NSDC) was set up in 2009  to achieve the government’s target of skilling / upskilling 500 million people in India by 2022 mainly by fostering private sector initiatives in skill development programmes  and providing funding. NSDC is a not-for-profit company set up by Public-Private  Partnership.

On 9th February, a unique reality show catering to skill development was launched on Doordarshan in partnership with MoLE, NSDC,FICCI and NIF. Christened as Hunnarbaaz, this show highlights the most in-demand skills across different Industry sectors, creating contests and tasks around these skill sets and featuring employment and entrepreneurship opportunities available for people with these skills. After a rigorous series of tests that sees participants collaborating and facing off against each other, India’s best Skills Star and Innovator will be crowned.

While all of the above initiatives are good on paper, they are yet to make any institutional change in the country. What else can be done to have a major impact?

One solution could be introducing vocational training at the high school level. One reason for high school drop out rates after class X is because of the disconnect between industry requirements and education imparted. When students realize that what they study in school will not help them earn a livelihood immediately, they quit school to take up a job. If instead, they are also trained in income generating activities, they could continue school while also pursuing a job.

Also, Private Sector needs to ramp up its contribution towards creating a skilled manpower. Presently many private sector companies run Industrial Training Institutes on a small scale as part of their CSR activities. If they form a consortium of industries working in the similar space to scale up such training activities, a larger impact can be achieved.

Above all, what’s most important is spreading awareness about available employment options and the training facilities for them. It is a big task, but if we want to capitalize on our demographic dividend and turn our population problems into an opportunity, it is something that we cannot do without.


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