Friday, January 09, 2015

Making Sense of India's Skills Training

I wrote earlier about Skills Training in India and how the bureaucratic intervention may have changed the shape of an entire industry. The point is that a change of course is urgently needed, and without it, the current 'skills industry' may end up doing irreparable harm to India's economic competitiveness.  

One of my correspondents made the point that I have not made any concrete suggestions how India could manage the massive task of skilling 500 million people. My four suggestions were the government should (a) try to leverage existing infrastructure of schools and colleges to provide employability skills training rather than trying to create additional capacity through private sector, (b) the government should take a more active role in professional training and encourage upskilling of those at work through training vouchers, (c) the government should look at incentives for employers to encourage them to train their people, and (d) that the government should get serious about Internet bandwidth which will, apart from encouraging e-commerce, also have an impact on the educational capacity. However, one could perhaps argue that these suggestions do not take into account the massive number that India has to train within 10 years.  

While I may accept the basic point that in the face of such a massive and urgent requirement, the suggestions made here - particularly those relating to Professional Training and Employer Incentives - would only have limited impact, I must return once more to the wisdom of the massive number. The 500 million by 2022, as announced by the then Prime Minister Manmohan Singh in 2012, was not based on any demographic analysis or joined-up strategy : It was a number the late Management guru CK Prahalad once mentioned in a lecture, most probably based on a back-of-the-envelop calculation, which stuck. Indeed, sometimes such large numbers are useful to focus minds, but in India, they seem to form the basis of policy, which is dangerous. So, if a meaningful policy does not correspond to a fantastic number, we tend to discard the meaningful policy rather than the number. 

Indeed, the number has stuck. After three years of going down the road and with a change of government, Indian skills policy is still driven by the 500 million by 2022. If anyone was looking, they would know that the National Skills Development Council (NSDC), the body set up to accomplish this mission is only perhaps achieving 10% of its targets so far, even with a very poor quality. The other 90% simply isn't there, even after all the reports, conferences, money being splurged on various things, and lots of people getting rich. The providers complain that people don't want to train themselves, abandoning the usual logic of the market that if someone doesn't want it, it is perhaps not worth it (as far as poor people are concerned, we believe such logic shouldn't be applied : They are meant to accept with gratitude whatever we give them).

The point is that the 500 million is, as it was at its conception, a nice round number meant to sound good at the conferences. I am not trying to question the late CK's wisdom, when he was right about so many things. But, he, more than anyone else, also knew that it was a different game altogether at the bottom of the pyramid. He wanted to focus minds with a hairy number - and sure he did - but he would surely be appalled, had he lived to see this, how this number was abused. The big announcement that India is going to train 500 million people in 10 years had one missing detail from the start : Train on what? Only much later, the government officials red-facedly admitted that they didn't figure it out, nor asked anyone. They talked about employment but forgot about employers. They just gave money to middlemen, who gave money to smaller middlemen, who gave money to.. by the time, a fraction of the money reached the training room, it was blind teaching the blind : Those who couldn't find any other job than to work for pittance were standing in the classroom teaching others how to be employable. It was only natural that hundreds of people were trained as auto-mechanics learning how to work on a carburetor long after automobile companies have switched to multi-point fuel injection, because the people available to train auto-mechanics were indeed those who trained on carburetors and never made the transition.

So, the cardinal sin in Indian policy-making was taking CK's rhetorical 500 million number but missing his point about challenges at the bottom of the pyramid, the prognosis that what works for the usual city markets may need to be completely reinvented there. Training, as in one person standing in front of students and perhaps doing Powerpoint, is not a paradigm that transfers easily to the bottom of the pyramid, and trying this results only in a chain of middlemen who know how to get the government money but have no idea how to get the job done.

My point, then, is that it is time to have a serious debate about skills training, and this needs to be free from the hangover of 500 million. Questions such as what training is meaningful and who needs to be trained need to be asked. The self-serving reports from consultancies and business groups need to be binned. Because by doing skills training badly, India is self-fulfilling the warnings about its demographic disaster. 



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