Sunday, January 04, 2015

'Skills Training' in India

India has spent millions of dollars and half a decade now on Skills Training, but got very little to show for it. Apart from endemic corruption - this is the new source of money for politicians and bureaucrats - the whole enterprise was marred by lack of imagination: Because this became a business of government hand-outs distributed by people who knows nothing about training or education (worse, they actually believe that there is nothing to know about training and education), the various 'skills programmes' helped destroy the successful private initiatives that grew into India in the previous decades. 

However, the need for skills training in India is urgent. There are demographic reasons for this: India will have 10 million working age people joining the non-farm workforce every year, and if they are not skilled in the trades, they are likely to join the swelling army of the disaffected. There are economic reasons - many Indian enterprises are crying for skilled workers and the labour costs, once one has taken inefficiencies into account, are often too high. India's model of creating a well-educated elite has failed: Most of its well-educated elite live abroad; it needs to urgently create a broad-base of skills to remain competitive and deliver the growth rates that is needed to sustain its democracy.

While everyone seems to agree up to this point, in typical Indian fashion, such noble thinking and professionalism disappears the moment money is on the table. The Indian policy-makers completely messed up the recent expansion of Higher Education, creating a vast underbelly of corruption and money-laundering and bad education. And, despite all these lessons, they have done the same again in Skills Training.

Of late, however, there are more serious initiatives gaining ground. Part of this is due to greater awareness due to all the government rhetoric, but also because the money has become tight and some of the more cavalier players are losing interest. It is reasonable to expect that the 'skills training' business will reach a new level of maturity soon: Whatever the new government in Delhi does on other fronts, they are sensitive to the needs of Indian businesses, and they would know that they would need to do something about the 'manpower problem'.

When I asked a Senior Manager of one of India's larger training providers what their strategy for the Skills Training market was, I was told that they wanted to 'sit it out'. They want to be in the party, because otherwise they would be excluded; but they only want to carry on a 'token' level of activity, not committing too much energy or resources to it, knowing that the project is mostly hopeless. They expected that the sector would be reorganised when the era of 'easy money' was over. If they were in, they reasoned, they would then be able to assume a leadership position, given that there were not many companies with truly national reach and capability in India.

In another, this one is truly into 'skills training' and is one of the largest recipient of the government largesse, there was clear admission that the current model did not work. The company wanted to focus on 'professional education' going forward, I was told, while paying lip-service to the 'skills training' rhetoric.

Such conversations, admission that the current model is broken and suggestions of new activities or models, are quite commonplace among serious providers in India. An up-and-coming hospital group has recently bought over a training provider purely to service their own requirements of healthcare workers: They have some real horror stories to tell about the lack of trained healthcare workers in India and its consequences on service provision. Another large hospital group seems poised to invest in a serious e-learning initiative, eschewing the government handouts altogether: They are looking for technology-based solutions for their manpower woes.

Indeed, the Indian policy-makers and associated ecosystem of trade associations etc are churning out reports and conferences about 'skills training' propping up the tested-and-failed model; but these are going to have less and less impact, if it ever had any. True, these bodies control 'Sector Skills' bodies, but given that few employers recognise them - and given the corruption, no serious employer perhaps ever will - their influence on what happens on the ground will remain limited in the foreseeable future. The Indian businesses know well to distrust the government and anything associated with them: They use the industry platforms to lobby their interest but not trust them to do their thinking, much less their talent planning.

In the coming months, it would be reasonable to expect rapid changes in the Indian skills training space, with declining influence of the government bodies and various associations (to be measured, if one could hazard a guess, by the decreasing number of reports and conferences) and emergence of new commercial initiatives in the skills training space and more and more employers getting into skills training. A wave of consolidation is expected: Otherwise, there will soon be a bloodbath of operations closing down and students left halfway through their course. In summary, the moment of change has arrived.

It is difficult to say what model will emerge after the reform happens, but one could perhaps enumerate what looks most logical from the lessons we have learned. 

A) A social provision, though the existing schools/ colleges, will be needed: The government aid should be directed to existing institutions creating new skills programmes (indeed, with performance criteria) because they are already locally rooted and able to function in a regulated environment. 

B) The government needs to play a role in professional training, indeed the skills problem is worst at the 'middle skills' level, but this should be done through training vouchers and provision of loans to eligible students (and this should not be limited by age), which should encourage the growth of a commercially driven, competitive professional training industry. 

C) The government should indeed encourage the employers to get into the act, by providing tax rebate and other incentives to people development activities. Indian employers spend the least per head training even among the BRIC nations, which undermine their complaints about the skills gap quite considerably: The government can help change this.

D) The government needs to look at the Internet bandwidth. The previous government announced that they would train 500 million people in 10 years and wanted to create 'training infrastructure' for this; the whole enterprise was indeed crazy because you can't possibly cram that number into classrooms. One may keep hearing 'online learning does not work' in India, but the problem may be less in 'Indian psyche' and rather in the simple fact of 'download speed' (as below):

  Country MBPS
     
  India 6
     
Other BRICS Brazil 12.7
  Russia 27.1
  China 24.1
  South Africa 6.2
     
South Asia Pakistan 3.1
  Bangladesh 6.8
  Sri Lanka NA
  Nepal 7.6
     
SE Asia Malaysia 6.4
  Thailand 20.1
  Philippines 3.3
  Singapore 105.2
  Indonesia 5.3
     
Select OECD UK 29.9
  USA 31.9
  Germany 29.8
  Japan 69.6
  Canada 25.3
 

(Source: Net Index)

In short, we need to rethink skills training, and urgently. India can solve its problem - as it did in many other cases - by enabling and releasing the entrepreneurial energies of Indian businesses. The government can and should play its role, not by giving handouts but by creating an environment for these businesses to do their job, by providing the infrastructure and by getting out of the way. One would hope that as India stands on the precipice of a demographic disaster, we would see some action.






  

 

  



 


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