Skills and knowledge are the driving forces of economic growth and social development for any country. It's no surprise that governments across the world are waking up to the significant role vocational education and training (VET) plays in their countries' futures. When we talk about VET, we mean training in practical skills, attitudes, understanding and knowledge relating to a job or work. At a time when skills gaps are a major concern across the world, investing in VET has never been so important.
It Pays To Invest In VET
A recent study by the City & Guilds Group explored the VET systems in four countries - the United Kingdom, the United States, India and South Africa. It looked at ongoing initiatives that enhance VET, and the potential benefits of increasing investment in it.
There's clearly an increasing commitment to VET. For example, the UK government has set a target of creating three million apprenticeships over the next five years. President Obama's address to Congress in 2009 included vocational education as part of his 2020 education goals. India has set a goal of upskilling 500 million additional workers by 2022. The South African government plans to increase workplace training, starting with government agencies and departments who will be encouraged to offer workplace training for vocational students.
Despite this, our research indicates that in the US, less than one per cent of 15-24 year olds are involved in an apprenticeship scheme. In India only 6.8 per cent of the labour force have received or are receiving vocational training of any kind - and only 2.3% have received formal skills training.
And yet investing in VET can see significant returns for economies, employers and individuals alike. In the UK, a 10 per cent increase in vocational skills could increase UK GDP by £163bn by 2025. In the UK and US, a 10 percentage point increase in the number of 16-18 year olds enrolled in vocational education could lead to a 1.5 percentage point reduction in youth unemployment. Additionally, in the US, nine years after enrolment, apprentices will have earned $60,000 more than their similar counterparts who did not take an apprenticeship.
By ensuring VET is a key pillar of the education system, governments can bridge the skills gaps, boost productivity and increase employment, all of which has a positive impact on society.
Making The Most Of The Future Generation
But what about India specifically? At present, there is a lack of available data to calculate the potential returns - but given the booming youth population in India, the opportunities are clear.
As it stands, more than 54 per cent of India's total population is below 25 years of age and over 62 per cent is in the working age-group of 15-59 years. The average age of the population in 2020 will be 29 years old, as opposed to 40 years of age in the US and 46 years of age in Europe. And by 2022 estimates show that the US will experience a shortfall of 17 million skilled; in comparison India will have a surplus advantage of 47 million. So while the majority of countries will see a decline in the labour force by four per cent over the next two decades, India's will increase by 32 per cent.
Along with Prime Minister Modi's pet project Skill India Campaign, India is in a unique position to upskill its workforce at home and provide skilled labour to the rest of the world. Training the future workforce could bridge the skills and unemployment gap in the country and drive sustainable macro-economic growth through increased productivity and technical knowledge.
So what needs to be done to truly tap into this potential? Firstly, India needs to focus on implementing the right kind of training techniques and provision to prepare our workforce for employment - both at home, and across the world. According to a working paper by the World Trade Organisation, gross domestic product levels can increase by about 3 percentage points by 2035 if India improves significantly on skills training. India must focus on upskilling its workforce training efforts to meet the demands of employers and drive economic growth.
The introduction of employer engagement through the development of Sector Skills Councils is a positive step towards this. But more needs to be done to incentivise vocational training and adequately reward workers who have undertaken skills development programmes.
Additionally, if Prime Minister Modi wants India to provide 'the requisite manpower to all', developing international partnerships is key to Indian skills policy. This will ensure skills supply meets international demand and quality standards.
It is also important for the government, employers and education providers in India to invest in primary research around the topic of VET to create a more compelling argument for ongoing investment. New insights could challenge the inherent stigma around vocational education, encourage employer engagement and inspire young people to consider the opportunities VET provides - rather than viewing university as the best or indeed the only route to a career.
The National Policy for Skill Development and Entrepreneurship 2015 has put in place an all-inclusive approach to strengthen the entrepreneurship development scenario in the country. The plan is competent, quality conscious, market savvy, innovative and has globally competitive entrepreneurs. But it needs to be carefully mentored and encouraged, in order to hit the target of skilling or upskilling 500 million workers by 2022.
Guest Author
The author is business head at Manipal City & Guilds
