On Skilling Issues and Challenges

1. SKILLING INDIA’S
DEMOGRAPHIC
DIVIDEND
Prof. Manasi Phadke

2. What is demographic dividend?
 Refers to a period – usually 20 to 30 years – when
fertility rates fall due to significant reductions in
child and infant mortality rates.
 As infant mortality reduces due to better health
care, societal norms for family size start reducing.
 This is often accompanied by an extension in
average life expectancy that increases the portion
of the population that is in the working age-group.
 This cuts spending on dependents and spurs
economic growth

3. The first dividend
 The phase in which the labor force grows
more rapidly than the population growth rate
 Immediately causes the growth per capita to
shoot up, as has been witnessed in most
Asian economies post 1970
 This phase lasts about 5 decades and then
eventually, slowing fertility rates and higher life
expectancies imply that the first dividend turns
negative
 The population ages

4. Old people!!!

5. The second dividend
 Wait! All is not lost!
 Old and ageing is not that bad, folks!
 An ageing population creates a drive towards
asset building, which a young population
doesn’t do
 Thus, if the first dividend is about creating
transitory bonuses, the second is about
creating assets out of these bonuses

6. Second dividend bigger than the
first...
Countries First dividend Second dividend
Developed economies 0.34 0.69
South East Asia 0.1 0.69
Latin America 0.62 1.08
Africa -0.19 0.17
India ??? ???
Source: Lee & Mason, IMF F&D

7. However, there are conditions for
that to happen...
 How much growth can be created in Phase I will
depend upon schooling decisions, training/ skilling
options, employment options, support systems for
young adults and so on..
 How much growth can be created in Phase II will
depend upon the social security systems provided
by the Govt., soundness of banking and financial
sector, general interest rate regimes and so on..
 Catch 22!!!

8. India in her first dividend: MSME
contribution to GDP (Positive)
17%
60%
50%

9. India vs. China in first dividends:
(Positive)

10. India in her first dividend: % skilled
manpower available (Negative)
52%
68%
2.3%

11. Water, water everywhere
(Negative)

12. What Modi Sarkar is doing about
it..

13. The Skill India initiative
 Clearly, more skilled youth and more entrepreneurs required
 On World Youth Skills Day, the government has set a target of
skilling 40.02 crore people by 2022
 'Kaushal Bharat, Kushal Bharat'
 The government's flagship scheme, PMKVY, will incentivise skill
training by providing financial rewards to candidates who
successfully complete approved skill training programmes.
 Over the next year, PMKVY will skill 24 lakh youth. The skills of
young people who lack formal certification, such as workers in vast
unorganised sector, will be recognised
THIS IS ALRIGHT, BUT, ...THE PROBLEM IS DEEPER..

14. The Conundrum
 Do we have enough number of colleges? YES
 Are they manned by faculty? YES
 Are students enrolled? YES
 Are they taught a specific curriculum? YES
 Are they employable? NO

16. Solution: Industry Academia
Collaborations
 Many case studies of successful symbiotic
relationships
 Silicon Valley: IT graduate projects funded by
companies; IP owned by the companies
 Dow Chemicals partners only with 12 select
institutes globally to produce talent in chemical
engineering that is relevant to them
 IBM partners with 28 B-Schools to create big
data syllabi: They need talent to man initiatives
very very quickly, possibly because of big data!

17. Possible initiatives
 Research output of students or faculty or both
could be backed/ suggested by the company/
Government departments
 Have a chair in the University financed by
corporate bodies
 Have company/ Government representatives on
syllabus design meetings
 Faculty sabbaticals at companies/ Government
departments/ ministries
 Company managers as guest lecturers on a
regular basis
 Preferential recruitment on both sides

18. Some gyan...

19. Thank you!
Prof. Manasi Phadke
http://manasiecon.wordpress.com
manasi.phadke@gmail.com