India 2010, skill capital of the world

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Without doubt the Indian economy over the last years has been growing at a stupendous pace. There is no looking back! Globalization is leading to increasing international standardization of educational challenges and systems. Globalization and technological changes has accelerated at an unprecedented pace, accordingly and going forward the development of skills through training should be the strategic response to technological change, globalization and other forces affecting the labor markets.

Overall with the introduction of new technologies has reduced the demand for unskilled labor and raised the value of advanced skills and competencies in the industrialized economies. The new generation of technology, especially the information and communications technologies and certain manufacturing processes will have an effect on productivity and on the demand for workers with higher-level skills and broader workplace competencies, particular the ones who command higher wages.

In India over the years new policy initiatives are taking into account the much awaited reform of the school education system, and creation of higher educational institutes like the IIM's and IIT's. Such initiatives are unparalleled and could bring substantial difference in developing Indian talent for the future. One could look at focusing policy mechanism on sector specific needs in terms of talent, enhancing employability of the potential workforce.

In the services sector technological change has created new categories of high-skilled occupations in health care, information processing, and finance and business services; in the goods-producing sector too, the emphasis is now less on the physical strength and adherence to routine and more on workers' behavior, flexibility and initiative. These work practices associated with increased employee involvement - such as the introduction of high-performance work organization involving devolved decision-making, and reliance on team-based systems - are perhaps the most important of the management practices affecting skill requirements. Self-managed teams in particular transfer management skills to front-line workers as they are exposed to the tasks other team members are performing.

A recent report published of the Confederation of Indian Industry (CII) and the Boston Consulting Group (BCG) has estimated that India would face 'talent gap' of more than 5 million by 2012, as existing educational institutions would not be able to meet the 'skills gap' as required for a high growth and for an economy that would potentially double in about half a decade. The report estimates that we would have a shortfall of 7,50,000 skilled workers over the next five years. In contrast, during the same period there will be a surplus of 1.3 million under-skilled and under-qualified workers.

The problem is aggravated by the high supply of unskilled labour where the need of the hour is skills honed through specific learning or through a high degree of practical training. It is this mismatch-large amounts of unskilled and unemployable labour when there is a huge demand for those trained in simple skills - that needs to be corrected.

The correction is not difficult to achieve because India also faces a unique opportunity. It has the youngest population in the world which means that it has the chance to complement what an ageing rest of the world needs the most - productive workers.

To optimally use this opportunity, we have to re-orient the labour structure & initiate a shift from low productivity to high productivity, in the process improving the wage structure & quality of life. To achieve this we need to,

• Identify skills across sectors and across functions in an organization.
• Skill the unskilled labour through training.
• Upgrade the existing institutions, and establish many more across India.
• Working in tandem with industries for training inputs and subsequent employment.

We need to leverage the demographic advantage that we enjoy, taking India towards becoming the skill capital of the world. The need of the hour is a more conscientious approach to change than just seeking results on incremental basis.