Skill development is a crucial pillar of India’s economic growth, laying the foundation for a more productive and globally competitive workforce. As the country strives to solidify its position as a leading economic power, the demand for skilled professionals has never been greater. However, the sector faces significant challenges. According to the Periodic Labour Force Survey 2022-23, the percentage of individuals aged 15-29 who have received formal vocational/technical training overall in India is 4.4 per cent, with only 3.4 per cent in rural areas, highlighting the ongoing challenge in expanding vocational education and training. Furthermore, the Ministry of Skill Development and Entrepreneurship estimates that only 2.3 per cent of the workforce in India has undergone formal skill training, while the National Sample Survey Office reveals that just 4.69 per cent have received formal vocational training. These figures expose a substantial skills gap, hindering India’s progress toward its economic aspirations.
The need for high-quality skilling
Addressing this gap requires more than merely expanding the number of training programmes. It necessitates a shift toward high-quality skilling, where the focus is on producing tangible, long-term outcomes. Unfortunately, weak outcomes often remain unnoticed due to insufficient data collection, resulting in a lack of evidence to assess return on investment (ROI). This data gap makes stakeholders, including the government, hesitant to invest in programmes that do not guarantee placement and sustained employment outcomes.
Scaling up high-quality skilling efforts is essential for attracting more stakeholders and ensuring that programmes deliver meaningful results. Success in these programmes must be measured through a comprehensive framework that includes employment rates, retention rates, income growth, and career advancement. It’s also crucial to differentiate between short-term impacts, like immediate job placements, and long-term effects, such as sustained employment and career progression, to fully understand the impact of skilling initiatives.
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Measuring success and building trust
Success in skilling programmes should extend beyond job placements, encompassing broader employability and future-proof skills like adaptability, problem-solving, and digital literacy. Leading indicators must be used to anticipate future demands, ensuring that skilling programmes remain relevant and effective.
Building trust through evidence-based insights is vital to gain the confidence of learners, employers, and government agencies. Showcasing successful case studies where data-driven approaches have led to improved outcomes can significantly enhance credibility and support for these initiatives.
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Policy implications and the catalytic effect of data
Evidence-based skilling programmes carry substantial policy implications. They can guide government resource allocation to ensure maximum societal and economic benefits. Data-driven results have a catalytic effect, enhancing the efficiency of skilling initiatives and driving sustained economic growth.
The current state of skills development
India’s skills development landscape presents a complex mix of opportunities and challenges. As the world’s fifth-largest economy, India’s vision for ‘Viksit Bharat’ by 2047 relies on effectively skilling its youth to meet the evolving demands of the job market. Yet nearly 73 per cent of workers aged 15-59 lack vocational training, highlighting the vast skills gap.
To leverage India’s demographic dividend and drive economic growth, a multi-pronged approach is needed—one that strengthens industry-academia connections and leverages innovative financing mechanisms like impact bonds. While government initiatives such as the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) aim to upskill the youth, success will require coordinated efforts from all stakeholders.
The power of evidence-based impact
Evidence-based impact, which involves the systematic use of data to design, implement, and evaluate programs, is vital in skills development. Grounding initiatives in robust data ensures that efforts are effective and aligned with labor market needs, improving resource allocation and maximising outcomes for participants.
At Generation India Foundation, we have seen firsthand the transformative impact of evidence-based approaches. This approach has enabled a 75 per cent job placement rate. Even among those who were already employed before joining, have seen their salaries increase by 3x—highlighting the value of skills training in today’s job market. The broader benefits of adopting evidence-based approaches in skills development, which the skilling sector can benefit from, are clear:
Improved outcomes: Programmes designed based on solid data inherently produce stronger outcomes. By understanding what works—and what doesn’t—we can continually refine our approach to maximise impact.
Increased efficiency: Data-driven decision-making allows for more effective resource allocation, ensuring that every investment in skills development yields the highest possible return. This efficiency enables the scaling of programmes to reach more individuals.
Continuous improvement: The iterative nature of evidence-based approaches fosters a culture of continuous improvement. By regularly evaluating and updating programmes based on new data, we ensure that initiatives remain relevant and effective, even as the job market evolves.
The way forward
To close India’s skills gap and drive sustainable growth, we must scale evidence-based strategies, strengthen collaboration, and embrace innovation. Scaling these methodologies across the broader skills landscape in India is essential, ensuring that resources are directed to the most effective programs.
Strengthening collaboration: Stronger collaboration among stakeholders is crucial. Public-private partnerships and international collaborations can create powerful synergies, leveraging the private sector’s insights and global best practices.
Enhancing data-capturing mechanisms: Central to driving impact is the establishment of robust data-capturing mechanisms. By systematically gathering and analysing data at every stage—from enrollment and training to job placement and retention—we can gain valuable insights into what works and what doesn’t. This continuous feedback loop is essential for refining programs, improving outcomes, and ensuring that training is aligned with labour market needs. Investing in advanced data analytics tools and technologies will allow for more accurate tracking of programme effectiveness and long-term impact on participants’ careers.
Driving innovation: With industries rapidly evolving, skills development programmes must be agile. Adopting new training methods, data analytics, and innovative financing models like impact bonds will expand our impact.
Fostering lifelong learning: As the workforce faces ongoing changes, a culture of continuous education and reskilling is crucial for adaptability and long-term success.
A call to action
To harness India’s economic potential and prepare its workforce for future challenges, we must deepen our commitment to evidence-based strategies, strengthen collaborations, and innovate in skills development. At Generation India Foundation, we are committed to leading this charge, but success will require collective action from all sectors. Together, we can build a skills ecosystem that drives sustainable growth and prepares India’s workforce to lead in tomorrow’s job market.
At charcha 2024, organized by The/Nudge Forum, India’s foremost collaborative convening, a multitude of industry experts and partners converged to explore various topics. With 40+ sessions spanning across 12 immersive, livelihood-intersecting themes, supported by 20+ sector-leading co-hosts, charcha convened to collaborate towards the shared goal of Viksit and Inclusive Bharat by 2047.
Charcha is an initiative towards closing the distance between samaaj, sarkaar and bazaar, (society, government and markets) and was held at India Habitat Centre, New Delhi from August 20-22, 2024.
To know more, visit: charcha 2024
Arunesh Singh is CEO and Vivek Pandit is COO at Generation India Foundation. Views are personal.
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