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October 13, 2009

The Need & Opportunity for Vocational Training

In an article for Business Standard, Arvind Singhal of Technopak points out why the real transformational opportunity in Indian Education is in the vocational training segment.
Vocational training, unfortunately, does not enjoy the same glamour and, therefore, it is very likely that despite having the largest young workforce in the world, India will be faced with chronic shortages in just about every category of skill-based trade jobs. Even more tragic, from India’s perspective, would be the missed opportunity in being the number one supplier of skilled trade labour to the developed and some developing countries even as many such countries, especially those in Western Europe, are faced with rapidly aging populations and fast declining birth rates, leaving them woefully short of all kinds of labour—farm workers, electricians, plumbers, masons, fitters, healthcare givers, machinery operators, cooks/chefs and the like.

It would help to look at some hard data to put this challenge and the big opportunity for India, should it choose to grasp it, in the right perspective. Of the estimated 455 million jobs in India in 2008, almost 90 per cent (about 410 million) were skill-based. About 255 million of these are related directly to farming, but then the rest (about 155 million) include myriad vocations relating to retail trade, manufacturing, construction, travel and tourism, hospitality and food services, and healthcare. These statistics by themselves are not remarkable at all. The first of the many shocks that follow is the fact that as many as 87 per cent of these 410 million skill-based workers received no vocational training at all, either formally or through hereditary channels. Just about 2.35 per cent have received some formal vocational training. Worse, just about 1.30 per cent of the current workforce are enrolled in some kind of formal vocational training. About 3.75 per cent receive their training through hereditary sources, but this will also drop as the future generations may not want to pursue their family vocations.

These dismal statistics are due a totally inexcusable dereliction on the part of Central as well as state governments, decade after decade and government after government, of their responsibility to create trade-based training infrastructure across the country. The current landscape of vocational training in India comprises just about 5,500 Industrial Training Institutes (ITIs) and 1,745 Polytechnics, compared to 500,000 similar institutes in China. Further, the US boasts about 1,500 trade training programmes compared to India’s measly 171. India’s current vocational training infrastructure caters to just 2.5 million annually, whereas the country is adding almost 18 million to its population every year. Even more critically, India has to move millions from farming jobs to non-farming jobs if it has to give itself any chance of improving the plight of the 255 million desperately poor engaged in farming. It is estimated that only 5 per cent of the youth are vocationally trained in any single skill in India, compared to 96 per cent in Korea and even 22 per cent in Botswana.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in