India’s demographic dividend has a bright outlook. With an average age of just below 29 years, the country is poised to become th
e foundation of the international talent pool. EY suggests that nearly a quarter (24.3%) of the additional global workforce in the next decade will be from India.
The low number of dependents (children and elderly) means that the working population can contribute more to economic growth and development. However, critical gaps between education, skills, and employability need to be addressed to leverage these opportune trends.
The Employability Challenge
This challenge, not unique to India alone, lies in the mismatch between the skills imparted by traditional education systems and the dynamic requirements of today’s job market. While industries are evolving rapidly, the uptake in educational curricula is much slower. Therefore, only about 51% of the graduates are employable, even though they are educated and jobs are available.
Further, the rise of the gig economy and digital workspaces across sectors are a departure from the typical 9-5 jobs in traditional settings. This flexibility needs people to be more digitally savvy. Organisations and individuals are also increasingly adopting purpose-driven approaches, aiming to create meaningful impact in areas like climate change, healthcare and education.
This shift has fueled the growth of impact-focused enterprises. In this context, skill development plays a crucial role in preparing professionals to contribute effectively to purpose-driven organisations or entrepreneurship ventures.
The advancements in Artificial Intelligence (AI), automation and Internet of Things (IoT) technology require developing a host of new skills. For example, the transition to clean energy sources will require the current workforce be reskilled to adapt to jobs created in solar, wind, hydroelectricity etc.
Urban areas offer better infrastructure and exposure to industry-relevant skills compared to rural regions, creating an employability gap. This disparity particularly affects rural youth – with 80% not availing of vocational training as per a 2023 survey. The divide is even wider for women, persons with disabilities, and indigenous communities who face additional social, physical, and cultural barriers to accessing mainstream skilling programmes.
Collaborating for Skilling India
In light of the above trends, skilling is a key focus area for the Indian government. The Skill India Mission is a flagship initiative aimed at bridging the skills gap. Launched in 2015, the programme seeks to provide industry-relevant skills to millions of young Indians through various schemes, including the Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
A key feature of the scheme is the establishment of skill development centres across the country. Located in tier 2 and 3 cities and towns, these centres ensure services are available to the maximum number of youth. The government has also allowed companies to use 10% of their CSR budget towards their internship costs, wherein, interns will be paid INR 5000/- monthly along with a one-time assistance of INR 6000/-. This provision can potentially create skilling opportunities for 1,00,000 youth in the top 500 companies in India.
Philanthropies and non-profits in the sector play a great role in reaching out to youth from underserved communities and groups. They are crucial in informing and delivering training programmes that are tailored to local contexts. Driven by philanthropic capital and visions, several organisations offer critical networks and vocational courses instrumental in increasing employability.
For instance, LabourNet’s SAHI platform showcases how nonprofits can enhance employability and self-employment. It connects businesses with a verified, skill-mapped workforce across 12,000+ pin codes while providing workers with consistent employment, wage growth, and upskilling opportunities. The platform helps businesses scale efficiently and remain compliant while empowering marginalised communities with sustainable livelihoods and economic resilience.
Industries are at the core of creating jobs. They are in tune with the current and emerging trends in their respective domains and understand the corresponding evolution in job roles and skills. Therefore, their involvement is essential as it can bring focus on practical, industry-aligned training programmes that prepare young people for real-world challenges.
Collaboration among the government, non-profits, and industries can significantly enhance the effectiveness of skill development initiatives. Government skill development centres are ideal platforms that can host skill programs targeted at meeting work needs. Industries can contribute by developing curricula tailored to emerging needs and training personnel to deliver these courses effectively.
This will ensure that training programmes increase employability. Further, non-profits, with their grassroots presence, can help reach and mobilise participants who otherwise might not be aware. Innovations like mobile skill labs and vernacular learning initiatives complement these efforts by making training accessible to remote areas, linguistic minorities, and persons with disabilities.
By pooling resources, expertise, and outreach capabilities, these stakeholders can create a unified ecosystem that addresses skill gaps while fostering economic resilience and inclusivity.
NSDC’s collaborative effort
The National Skill Development Council’s (NSDC) Skill Impact Bond is a great example of such collaborative effort. In this framework, NSDC has partnered with the Michael & Susan Dell Foundation as risk investors, committing $4 million in upfront working capital to sustain the program over four years. The bond’s success is further strengthened by technical perspectives and knowledge of the outcome funders including The Children’s Investment Fund Foundation, JSW Foundation, HSBC India, and Dubai Cares, with the British Asian Trust serving as the transaction manager.
Focusing on platforms that can help drive these conversations, build consensus and facilitate collaborations amongst diverse stakeholders are key to directing much-needed funds and expertise towards skill development.
India’s youth are its greatest asset – empowering them with the right skills and opportunities is key to building a resilient and self-reliant nation. Equipping them with market-relevant skills can reduce poverty and boost social mobility. By bridging the gaps between education, skills, and livelihoods, we can unlock the full potential of a young population, driving not just their success but the nation’s as well.
(The authors are part of AVPN; Views expressed are personal)
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