Did we forget about skills along the way?

Did we forget about skills along the way?

India inherently was a nation that encouraged skill building in all domains of life but somewhere along the way we lost track of this, becoming synonyms to a mass producer of under-skilled technical workforce (with all due respect to the tech gurus out there, numbers don’t lie). Today we face a mass skilling gap especially when it comes to white collar non tech roles beyond the technical profiles, which I will briefly be touching upon in this post

Ancient India had its roots deep in specialization…

Ancient India followed the principles of Karma, Varna, and Dharma which assigned occupations to people based on the need to maintain a system in the society. The ancient education system thrived on collaborating skills, specialization, and duty in tune with the functions in the society.

The drawbacks of this system were much clear in the years that followed but for the scope of this note, we will focus on the merits alone. This system encouraged individuals to be specialized and by virtue of having a joint family system, individuals were constantly in contact with the family occupation and it was natural to be employed in the traditional family occupation.

Switching trades was not a popular option…

Purely because picking the family trade brought with it a metaphorical Starter kit (aka tips and tricks of the trade aka skills) that were passed on from the ‘family elders’.

As the industrial revolution set in, creation of gig work and mass culture became the first threat to this system…

Money became the prime motivator of the workforce and we started levitating towards income generations above all else. Not to undermine, any of the struggles of millions who lost their jobs out of necessity. Lots of individuals migrated to find a better life and opportunity. Somewhere along this journey, we lost our focus on developing skills and our pride in perfecting them over generations.

Fast forward to today,

In India, 1 out of every 100 migrant, moves out for education. 1 in 3 professionals in India is career sleep walking and nearly 60% agree that switching careers to find a better opportunity is always on their minds.

Today we have the third largest number of students pursuing higher education every year, succeeded by China & USA.

And yet, unfortunately, we rank 107 out of 141 countries in terms of workforce skills, and India Skills report 2021 reported that today’s youths employability reduced to 45.9% from last year’s 46.2%.

Our Gross Enrollment Ratio stands at 26% which is projected to get to 50% by 2030 (optimistically)

So what does this mean for the future?

Based on this projection, it is safe to conclude that a lot of individuals (>100Mn) will be pursuing higher education in the next 10 years and a lot more will be pursuing diversified courses (not just engineering)

An interesting study also shows an early trend in dropping enrollment in professional (technical) courses in India. Which would mean that a substantial part of the population that may have chosen engineering or medicine as an obvious option earlier, is now open to exploring more courses within the non-technical courses category.

Graduates from non-technical courses currently chose to apply for government jobs as a go-to option, with a few others opting for further studies. A very few elites have access to placement cells and a chance to pivot. Today this group is to the tune of ~18Mn non-tech graduates (based on our estimates)

Companies have realized the potential of this (non-tech) underdog, since a graduate from B.Arts and B.Com is reported as being as employable as a B.Tech grad in 2021.{Number crunching – this has gone up from ~26% (in 2015) to 45% (in 2021) for the former ascompared to 54% (in 2015) down to 46% (In 2021)}

With a drop in enrollment in tech, gradual skewing of the population towards non-tech and with a GER target of 50% being a few of the many reasons, there is a high probability of a larger number of non-technical graduates, than ever coming out of the higher education ecosystem. For sure not all of them will go on to do government jobs or try to become technically skilled as is also supported by this survey LinkedIn (Jobs on the rise in 2021).

A fresh stream of professions…

Then where will they be employed? Given the high amount of digitization and creation of SMBs in India, a likely consequence would be more jobs in sales, digital marketing, lead generation experts, SEO experts, design etc. There will be a large pool of non-tech jobs available which graduates will not have skills to pivot to.

We can see a rising trend for the sales and business development profiles for the last one year since today on Naukri.com (which captures over 70% of the job recruitment marketplace) there are ~20,000 jobs in digital marketing and ~20,000 in sales (profiles like Sales Consultant, Sales Operations Assistant, Inbound Sales Specialist etc) for people with 0-2 year of experience. Comparing this to the number of technical jobs (with 0-2 years experience) was ~60,000, which means that for every 3 technical job openings in India for freshers, there are ~2 in sales and digital marketing with similar experience. In my next post, will elaborate more on the specific profiles and business models within these categories that can become large.

Given that today, we are faced with a total of 37Mn graduates (tech + non tech) and a large chunk of them trying to upskill/reskill themselves without the umbrella of “elders” teaching them tricks of the trade nor having resources in college or at work, it is imperative for startups to come and solve for this gap.

If you are a team that is building for this category, with your focus being on the larger market of non tech graduates, we would be happy to connect with you and brainstorm ideas!

You can reach us at sonia@kae-capital.com Or gaurav@kae-capital.com



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