Need to focus on market-oriented skill development

CHARLES Metcalfe, ambassador to the East India Company, once told Maharaja Ranjit Singh: “In ancient Europe, there was the empire of Rome. It rose to greater and greater glory till the glory was that of Rome as a whole.” Fascinated by the young man’s views, the Maharaja thought about what made empires and kingdoms truly eternal, about how they could belong to their people — and the skills those people possessed to run and sustain economies and not merely armies. Little wonder then that the conditions in his time were so good that the people did not wish to migrate to British-held regions in search of comforts and modernity. The best workers were sent to European countries for acquiring new and diverse skills. While establishments connected to the military were state-owned, sectors like textiles, leather, wood and paper industries were largely privatised and competitive in methods, quality and pricing. The mixed economy absorbed the youth and upskilled them at a time when societies went from peace to war rather quickly. In the words of Lord Roberts, this kingdom was the “finest in Asia”.

Today, as big talk on trillion-dollar economies and projections of grand progress take precedence over the reality of job losses and insecurity, some reflection is needed. Recently, the Institute for Human Development (IHD) and the International Labour Organisation (ILO) released the India Employment Report 2024, which highlights that a big segment of India’s youth is grappling with unemployment. The report suggests that self-employment was the primary source of livelihood for nearly 53 per cent of the Indians in 2022, and this may or may not provide a dignified living wage to many, let alone a social security net. The number of youngsters with secondary or higher education has almost doubled from 35.2 per cent in 2000 to 65.7 per cent in 2022. Youth unemployment has surged over the years, and the educated youth is in the grip of higher levels of joblessness. This is called ‘educated unemployment’. We need to ask what a college/university degree is worth — more and more MBA degree holders are entering the market, even as the demand has dropped by 55 per cent this year. At IIT-Bombay, 36 per cent of the graduates are yet to get campus placement.

Companies want people with specific skill sets. The focus needs to be on employability and not merely degrees that require unlearning. The youth needs to identify emerging skills in high demand — sustainability, artificial intelligence, machine learning and other skills which a digitised world requires. A key takeaway from the report is that while the wages of informal labourers maintained a modest upward trend during 2012-22, the real wages of regular workers either remained stagnant or declined. As high as 62 per cent of the unskilled informal agricultural workers and 70 per cent of such workers in the construction sector at the all-India level did not receive the prescribed daily minimum wages in 2022. In the post-Covid era, the report points to a rapid introduction of platform economy gigs that are tech-enabled and have introduced new dynamics into the way labour is paid and engaged. Increasingly, platform and gig work have been expanding, but it is, to a large extent, the extension of informal work, with hardly any social security provision.

A two-pronged approach towards enhancing job security and market-oriented skill development is the need of the hour for the benefit of the youth. Within this pattern of work and employment, we have to find a way to make livelihoods sustainable, and only skill development can enable this. Gig workers can find work on various digital platforms. Amid the rapid increase in the usage of apps like Zomato and Swiggy Instamart, we must remember that not merely delivery partners, but cloud kitchens, local home-grown brands, manufacturing and new-age professionals are also going to receive a massive push. With over 6.3 crore small and medium enterprises, this sector contributes around 30 per cent to the GDP, providing employment to 11.3 crore people.

In the Niti Aayog’s June 2022 policy brief on the platform economy, a suggestion was made to launch a ‘Platform India initiative’, built to accelerate platformisation by handholding, funding support and incentives, skill development and social financial inclusion on the lines of Startup India. A national push for better social security and funding must kick in. At the ground level, a robust network of upgraded ITIs (industrial training institutes) that offer market-oriented skills to the youth must be established in tandem with the industry as well as social impact organisations.

Let’s take a look at present-day Punjab. According to the Punjab Economic Survey report released by the state Department of Finance in March 2023, the services sector grew at 7 per cent in 2022-23 and employs 38.46 per cent of the workforce. This space is largely being driven by contractual work.

The manufacturing sector, which accounts for 17 per cent of India’s GDP, must be boosted to create more jobs. The reverse migration to agriculture, as suggested in the IHD-ILO report, is proof that youngsters are not skilled enough to find jobs in other sectors and are reverting to farming for survival. In a 2021 projection report by BCG-Dell Foundation on the gig economy, it was stated that even in sectors such as oil and gas, small & medium businesses and healthcare, there would be greater demand for highly skilled gig workers. Of the 9 crore job opportunities, construction, manufacturing, retail, transportation and logistics would be the largest industry sectors with the potential to create around 7 crore jobs for gig workers in the next eight to 10 years.

Today, of the one lakh young men and women who leave Punjab for foreign shores every year, barely any are trained in vocational skills that can find them employment and progress globally.

If the skill gap between the youth and industry is fixed, there will be no dearth of jobs and progress right here. It is the collective responsibility of all stakeholders — the state, the industry and society — to ensure that the skill ecosystem is not left underutilised and that it is upgraded from time to time. A gig economy that is vibrant, skill-driven and offers a shot at progress can buck the age-old trend and make cities and towns of Punjab more appealing and global.