Higher skill proficiency is linked to GDP growth, labour force participation, and income equality. Unemployment and lack of skilled workforce have always been a big issue in India, more so in today’s day and age.
According to the India’s Skills Report 2019-20, only about 46.21% of students were found employable or ready to take up jobs in 2019. Coursera in its Global Skills Index 2020 reported India’s unemployment rate at 27.1% in early May as nearly 122 million Indians lost their jobs between March and April over the COVID-19 lockdown. According to Udemy’s 2019/2020 Global Skills Gap Report – a special data survey-report that provides a comprehensive look at the divide between job-seekers’ skills and the qualifications demanded by employers – Indian employees found the skill gap highest, after Brazil. According to the report, 92% of full-time employees in India agree that there is a skills gap in the country and 76% of them feel personally affected by it; 82% agree that college education has not equipped them with the skills they need to succeed in today’s job market; 84% say that skills are changing so rapidly that their current knowledge is fast becoming obsolete; the majority (92%) say that there is so much competition in the job market that they need to be constantly upskilling.
To address the issue and cater to this massive national demand, the government has launched several initiatives, and several private enterprises have also come up with various solutions.
Community Opinion (Poll data indicates a clear disconnect)
And lately, with the EdTech boom, several startups have also jumped into the space and offered various employability and skilling courses leveraging technology. But what is really needed to solve this massive employability and skilling puzzle in India is a coordinated effort among companies, governments, industries, campuses and educational institutions across the country.
As a part of its effort to close this skills gap and to bring the stakeholders together, EdTechReview recently hosted a webinar on “Solving India’s Employability & Skilling Puzzle: The EdTech Way” in association with AWS EdStart, an education technology-focused accelerator. The webinar was moderated by Utkarsh Lokesh (CEO & Editor, EdTechReview) and joined by experts Ramanan Ramanathan (Mission Director, Atal Innovation Mission, Additional Secretary, Niti Aayog), Sunitha Viswanathan (Vice President, Unitus Ventures), Balamurugan SP (Co-founder & CEO, GUVI), R. Sreenivasan (Co-founder, CL Educate), and Amit Nevatia (Educate Program Lead, AWS).
In the webinar, the speakers talked about a range of things, from decoding the complex Indian employment landscape to explaining the various initiatives taken to address the problem, and how different stakeholders can partner and support those initiatives. They also talked about several challenges and growth opportunities in the skilling space; shared insights on future skills and job market, and how certain startups are solving the problems using innovative approaches, among other things.
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How do investors view the skilling and employment landscape (across blue-collar and grey-collar, college students etc.) in India?
Unitus Ventures’ Sunitha Viswanathan says India has almost 415 million blue-collar workers, and about 11 million to 12 million youth graduating every year who struggle to find jobs either because they have not been skilled appropriately or they are unable to join the workforce. Regarding the future jobs and employment landscape, she says that there’s going to be different nature of jobs altogether, with side gigs and remote jobs already changing.
Being a VC firm that has EdTech and job tech as its critical focus areas, Unitus Ventures invests in startups and companies that cater to a large number of low-income population to solve India’s employability and skilling problem. Sunitha says they look for solutions which match people to jobs in real-time, at a given point of time and help them earn additional income over and above what they make in their day job. They look for solutions that match people to the right type of jobs, especially in the blue-collar sector, where CV is not necessarily distinguished, and people are judged based on the skills. Unitus also looks for tech-driven models and companies that can train people to ensure jobs stability. Sunitha added that they are continuously interested in seeing how a digital profile will help people get a better job.
According to Sunitha, the overarching size of the EdTech market – which includes vocational, skilling, and others – is currently about a billion dollars, and it is expected to grow at around 40-45% CAGR.
How the government’s Atal Innovation Mission contributes to the skill development and innovation building in India, and how can different stakeholders partner and support the mission?
Before going into detail about Atal Innovation Mission and its contributions, Mr. Ramanan – the Mission Director of the Atal Innovation Mission – shares some basic stats showcasing the vastness and diversity of the country. With a population of 1.3 billion, 715 districts, over 4,000 towns and cities, and 600,000 villages spread across the country, Ramanan says India has a demographic divide which is the envy of many counties. According to him, India has 1.4 million+ schools, more than 10,500 engineering and related institutions, 39,000 colleges; 65% of people under 35 years, and 115 million young students entering into the workforce every year. Ramanan feels that we have a tremendous youthful workforce that needs to be harnessed for the growth of the nation.
“So if you want to harness this demographic dividend that we are talking about and want to be able to really empower them to have a great future and to create the great future that India needs, we need to ensure that we become a nation of innovators, not just job seekers but also job creators.”
To make this happen, Ramanan says, the Atal Innovation Mission has launched thousands of tinkering labs called Atal Tinkering Labs. Tinkering labs are tech innovation workspaces in schools where the latest of technologies like 3D printers, robotics, IoT devices, augmented and virtual reality, and Do-It-Yourself kits are available to young school students. They help students to acquire a problem-solving innovative mindset by physically tinkering with the technologies to help create solutions for problems that they see, touch, and define. Ramanan says students tinker with those DIY kits in a place of fun without any association of credit or marks or something that is forced upon them. He believes this way will create the most innovative mindsets in our country.
At the university level, Atal Innovation Mission is setting up hundreds of world-class incubators to foster startups across the country to help them get access to the right technology and support. The government is giving a grant of up to Rs 10 crores for each successful applicant to the scheme. According to Ramanan, the mission currently has 68 incubators and more than 1500 startups, including 500 women-led startups in the last two years.
Atal Innovation Mission is also setting up community innovation centres to reach the remotest parts of the country to empower them with technology so that they can have access to quality education, healthcare, affordable housing, clean drinking water, sanitation, etc. According to Ramanan, 115 out of 715 are still aspirational districts problems like one-in-five infant mortality, one-in-three maternal mortality, etc. Ramanan feels these statistics are unacceptable for a country the size of India. Seeing these challenges, he says “…we need tremendous amount of focus on problem-solving, skill development, and innovation, so that we address the issues of socio-economic progress, bridge the digital divide, and thereby bridge the economic divide…”
So how can other stakeholders participate in or support the Atal Innovation Mission? Ramanan says they have created a large mentoring network which now has more than 10,000 registered voluntary mentors with expertise in various domains to help students, startups, and incubators. He says corporates can partner with the mission and institutions can adopt tinkering labs and participate in launching challenges to stimulate innovation. Ramanan believes that when corporates, academia, and government come together, we can have magic happening in our country.
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Impacts of the COVID-19 pandemic on the skilling industry
GUVI’s co-founder and CEO, Balamurugan, says its solutions of teaching technology in vernacular has helped a lot of people during the pandemic to understand the skilling options available to them. According to him, COVID-19 has levelled the ground for people to get access to skilling, and people from tier 1, tier 2, and tier 3 cities are now on the same plane.
Community Opinion (Poll Data)
Balamurugan says people can now access information and skilling directly irrespective of the geographies they are based. He says the pandemic has helped them understand the real challenges faced by the people in the skilling sector, especially for people in the remote areas and how to address them.
Skill development landscape and key challenges facing the skilling sector in India
Community Opinion (Poll Data)
Expressing over 20 years of experience in the space, CL Educate’s Sreenivasan lamented the government’s lack of enthusiasm on the private enterprises in the sector. He says private enterprises have capabilities and have acted and delivered in the past, but the government often takes years to fund the projects or payback. This, he says, is the reason why the majority of people who stepped into the sector are now stepping back. “Pipelines need to be laid”, he adds.
Being at the forefront of technology facilitation for over 20 years, Sreenivasan knows what works and what doesn’t in the field. He says technology adoption had been slow and didn’t play a huge role in the education and training space. According to him, COVID-19 is a blessing in disguise, and it had to happen to demolish the conservative mindsets of people.
Taking the example of Germany, where – according to him – 95% are skilled and only 5% progress beyond class 12 to university education, Sreenivasan says we need to look deeper and focus on vocational training and skill-building. According to him, 90% of IITians after graduation say they don’t know why they did engineering. Realizing this, Sreenivasan says there is a dire need for entities like NITI Aayog and others to sit and understand where we really need to tinker the system and what needs doing.
CL Educate has been making lots of contributions to the skilling space. They have skill schools from retail to banking and financial services. The company is now working with AICTE for implementing machine learning and artificial intelligence across universities. CL Educate is also working with universities, linking pipeline between corporates and universities for research, among others.
Talking about their recent initiative aspiration.ai, Sreenivasan says they could train hundreds of teachers to go online within seven days. They handheld teachers for the Delhi government and multiple other governments and universities in India and in South Africa. He says that the platform aspiration.ai uses AWS to facilitate synchronous and asynchronous learning, and in a matter of a week, they have brought education systems online like never before. Sreenivasan claims that 50/55-year-olds who never touched laptops to teach are now technology-oriented ace-educators.
Innovative solutions/startups/emerging models in the skilling and upskilling space in India
Sunitha says Masai School, which takes anyone from zero technical background and trains them to become a well-qualified person to earn a minimum of 5 lakh per annum without any upfront cost, is an interesting one. According to her, this is not a small thing for people coming from tier 2 and 3 cities, and tier 4 colleges. She believes bringing about this entire transformation of someone is amazing. She says that the fact that the student doesn’t have to pay anything upfront and just needs to pay at the time of getting a job ensures economical background doesn’t prove to be a constraint for people to sign up for a job. She is also seeing innovative solutions in companies/startups that provide courses for 2-3 months duration in social media or digital marketing skills etc. which can help people become a freelancer or even join full time.
Amit says English Helper, CL Educate (though not a startup), and Eckovation – an AWS EdStart member & a startup providing coding skills to children – are some of the innovative startups that he sees in the skilling space. He says, “technology will not take away the jobs but the person who knows the new technology, will”. Amit says skilling, reskilling, and upskilling has become paramount in today’s world.
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Key parameters investors look before making a bet in EdTech Startups
Sunitha says the first and foremost for investors is the team. According to her, an idea is only as good as the team that can execute it, and it’s the execution that gives any startup/company the differentiation. After a team, what matters is whether you are building a ‘nice-to-have solution’ which probably only 10 million people will buy it or a ‘must-have solution’ that can cater to the next 300-400 million people. She says people will pay only for a must-have solution, and not for a nice-to-have solution.
Ways to solve key challenges facing skill development and meeting market demand in India
Ramanan says there are many skills that the industry needs which are not being taught in the universities, and there is always this gap between what the industry needs and what the academics offer. That gap needs to be bridged. To do this, Ramanan says the industry has to work very closely with academia to tell them of gaps. Then, academics should integrate those skill development programs into their curriculum or initiatives during the vacations or in partnership with Industrial Training Institutes.
According to Ramanan, skill development becomes an issue in two situations. One, when children drop out from schools, and they need to acquire vital skills for their survival or job sake, and two, when people have acquired a skill, but that skill becomes obsolete due to change in technology and they have to upgrade. He says that while in the former situation ITIs should position them and fill the gap with the skill that is required by the industry, in the latter situation where the industry comes into the picture, the industries should fill the gap in partnership with ITIs, other skill development centres, or with the academics themselves.
Growth opportunities for employability and skilling in India
Sreenivasan says opportunities are immense and we must address all needs across tier 1, tier 2, and tier 3 cities. According to him, while IT-enabled services and related technology spaces have leapfrogged the country into the services sector. However, everything else has been left behind. He says there are immense opportunities, for example, in the agriculture industry or other sectors and we need skillsets there as well. According to the CL Educate co-founder, every talk about skilling in education over the last 6-7 years has only been about technology - digital marketing, coding, AI, ML, etc. and he suggests that the focus should be broader across industries, seeing the country need in mind.
What role does quality of content play in skilling and EdTech startups? Do you think the content we have today is good enough or do startups need innovative ways to create more content around meeting this skilling demand?
Answering the above question from the audience, Balamurugan says content is not just the video or the the graphics or the animation that determine the quality of the content, but the way things are delivered in the lecture that makes the learning more meaningful. Balamurugan says for skilling, bringing content from academic perspective will not help the learner, and an EdTech startup that wishes or already is in the upskilling space needs to bring hands-on content from the industry experts. According to him, if they bring the content from real people who know what they are actually delivering, it adds a lot of value for the learner, ensuring better learning outcomes.
What sectors of skilling do you see the most propensity for the user to pay?
Sunitha says skilling is all about getting jobs. Skilling for the sake of skilling won’t make any sense, and nobody is going to pay for it. According to her, any startup that can show a historical record of having placed candidates in well-paying jobs that increase income has a propensity of the user to pay for it.
Amit agrees with what Sunitha said but says he doesn’t think we should be focusing so much on jobs. According to him, it is the fallacy of our country which hampers the culture of entrepreneurship. He feels the word livelihood would be more apt, as it contains both employment opportunities as well as entrepreneurship opportunities.
Balamurugan, however, opines that jobs are the factors that motivate people to go on learning or get more skilled. According to him, without connecting the jobs with the learning or without showing the end result after the skilling process, it is hard for someone to stay motivated after a period of time. So he says connecting the jobs with the learning has always made the person a better learner. Sreenivasan agrees that employability is as important as entrepreneurship.
Community Opinion (Poll Data)
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Is ISA model in India a successful one? How gamification has been or will be of any value in EdTech and is any firm using this as a unique value proposition?
Answering this question from the audience, Sunitha says she sees initial evidence that a properly structured Income Sharing Agreement (ISA) can work well in India too. However, she clarifies that it will only be effective if the program ensures placements. ISA is a way to solve financial constraints, and the program still needs to be successful by itself, she added.
On gamification, Sunitha says it is a means to an end and – by itself – is not sufficient. According to her, it’s an excellent way to keep the learner engaged, but the pedagogy is crucial to ensure learning outcomes, and EdTech startups use it as a hack to engage with the learner, but it’s only an enabler.
Piece of Advice to Emerging Skilling Startups
On being asked to give one tip to emerging skilling startups in India, if anything specific that needs to be kept in mind, Sunitha says it’s going to be all outcome-driven; something that startups need to keep in mind. “We are moving away from a world of certificates and degrees. We’ve always been a degree-holding nation. I don’t think that’s going to work in the real world. In the future, it’s going to be all about ‘can you deliver?’. You don’t need to have a degree from an IIT or from any of the premier institution. If you have the right skills, you can get employed, and you can earn as much.”
Balamurugan says they have never separated learning from the outcome, or the placement, or the jobs. “Because only then people are able to stay motivated in the learning and then go for it. But the question is when do you start this skilling process or should it be part of your day-in and day-out activities? Any startups getting into the space have to make sure that the learning be inculcated in the day-in and day-out activities of the learner. It should not be kept as a separate activity which he needs to go through. If we could build a solution with respect to this, obviously more adoption, more engagement, will bring more revenue for the startups.”
Amit Nevatia – “We have an intrinsic fear of failure, and when we are moving to this new-age world where we are trying to be innovative, to be entrepreneurs, I think we need to shed that fear of failure. We need to learn from our failures and move ahead fast. Second, in a country like India, whatever may be your solution, look at how you are going to scale that solution. Because there have been many pilots which have failed in India primarily because they have not been able to scale. Today cloud becomes an enabler to help you scale. So look at scaling options and don’t be afraid to fail.”
and also access the audience questions and answers
About AWS EdStart:
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