Investing in Skills and Education

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Skills education

The narrative on the future employability of India’s youth and workers hinges on developing skills and bringing education to the 21st century. What are the opportunities to supercharge the Indian workforce?

By 2020, India will be blessed with a median age of just 28. Quality education and skill-building can become the key to reaping the benefits of our demographic bounty. Does India have a workable plan to address the scale of investment required to create a quality labour force? A recently released white paper by MBAUniverse.com resolutely states that ‘investing in education and human skills’ is an undisputable pre-requisite for India’s ambitions to get slotted as a major world economy.

Market Size

Half a billion in the age bracket of 5-24 years is the education market slice in India- the highest in the world. The Indian education sector is poised to reach US$ 101.1 billion in FY19 with the higher education segment expected to touch US$ 35.03 billion by 2025.

Growth Enablers

  • A big-ticket item of the Union Budget 2019, the much-discussed draft National Education Policy aims to increase Gross Enrolment Ratio (GER) in higher education from 25.8% in 2017-18 to 35% by 2025 and 50% by 2035. Which means, the number of universities has to increase from the current 950 to at least 1200 by 2025 to buoy up the GER ambition. This presents unparalleled investment and growth opportunities in higher education.  
  • The education sector by 2030 will become the largest employer in the country opine some, with nearly 8% of the country’s workforce (between 54-80 million workers) engaged in the capacity of a worker or a student. Massive investment and robust public-private partnerships are required to achieve international quality standards encompassing all aspects of education- from pedagogy, teaching staff, physical infrastructure, to allied educational services such as coaching, edtech providers, and skills training institutions.
  • The draft NEP places the highest priority on overhauling archaic single programme curricula run by 40% of Higher Education Institutes, which it reports as grossly misaligned with the multidimensional skill requirements of a 21st-century economy. This opens up investment and collaboration avenues in curricula re-design, re-skilling teachers and trainers, infrastructure development, and leveraging technology to meet the needs of a multi-disciplinary modern education.
  • Increased public and private investment also expected in skilling, including a strong focus on technical and vocational training and education (TVET).  There are plans to route US$ 1 billion from central government coffers to states for skill development initiatives. Further, campaigns like the National Apprenticeship Promotion Scheme (NAPS)  are actively seeking industry-academia partnerships to make education more relevant to employers.

Also Read: National Education Policy – Enough Focus on Vocational Education? – Part I


  • Active internet users is expected to touch 627 million in 2019, fueled by rural demand. This signals a massive market for online and distant education with increasing internet connectivity. India is the second largest market for e-learning after the US, growing towards US$ 1.96 billion by 2021. “Brick and mortar educational institutions will have to ride the digital highway that Digital India promises to build, reshaping their focus towards distance, online and continuing education in addition to campus programmes,” states the MBAUniverse.com report.
  • A favourable policy regime towards entrepreneurship in the last few years has resulted in around 3,500 start-ups jostling for space in the lucrative edtech sector, which received nearly US$ 700 million in funding in 2018. Furthermore, a 2017 KPMG in India and Google report pegs the Indian edtech market to reach $1.96 billion by 2021.

Employable Skills a Goldmine for Investors

Case in point- of the 1.5 million fresh engineers unleashed into the job market annually, an abysmal 1% get recruited by the top 100 companies. The rest simply don’t make the mark. For years IT companies have had to mass train fresh graduates often for months of zero productivity before they are allowed to work on real projects. However, this has proved unsustainable in the long-run with bottom lines taking a hit. The resultant shift is now towards youth who can hit the ground running- or at least skilled in the minimum requirements of employers. Which means closing the academia-industry gap. And this is where the streets are paved with gold for investors. Training and development in India is already a US $5 billion business. And only growing- considering 90% of the jobs in the country are skill-based (all levels and sectors), and a paltry 4-6% of the workforce skill-trained.


Also Read: Do Employers See ROI in Apprenticeships?


Players who can plug the education-employment divide with job-readiness programmes designed to boost employable skills can be assured of many takers. These may vary from immersive curated work-based experiences such as internships and apprenticeships, to short-form and online training courses. The preference is heavily skewed towards a blended learning experience what with theoretical training fast losing sheen to more practical knowledge acquisition in real workplaces. Training providers who can cater to these new-age employment demands have a real shot at bagging strong returns.

Anticipated Tailwinds

The Indian education sector is poised for tectonic reform to support an acute need for a quality future workforce. With employment-linked human resource development increasingly a matter of national agenda, increased investment in the education sector will be a natural corollary to those savvy enough to grab the opportunities with innovative business models and unique solutions.