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Microfinance India Summit 2009
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Skilling IndiaIssues, Challenges and Opportunities
Hotel Taj Palace
New Delhi
October 28th, 2009
•India– GDP 1 trillion; Double in next ten years
– Why doesn’t it feel right? Growth vs. Poverty
•Five Labour Market Transitions– Farm to Non-Farm
– Rural to Urban
– Unorganized to Organized
– Subsistence self-employment to Decent wage employment
– School to Work
• Context– People supply chain company out of inventory; open positions, Jaipur
– Market failure
– Population repackaged
Background
•Learning's– Reforms lifts all boats but some reforms makes boats seaworthy
– Radical Revamp of 3E’s (Education, Employability, Employment)
• Three Problems
– Immediate Matching Connecting Supply to demand
– Medium Term Mismatch Repairing Supply for demand
– Long Term Pipeline Preparing Supply for demand
• Innovation at Intersection
– Public, Private, NGO
– Financing, Delivery, Certification
– Education, Employability, Employment
Human Capital
What is the problem?
Poor Education Regime
Low penetration
of education
Low/ Uneven
returns to
education
Regulatory;
Accreditation
heavy but
outcome light
Not work
ready; BA
Architecture;
Delivery
Systems
Quantity vs.
Quality trade-off
10+2+3;
Few on/off
ramps, Multiple
intelligences
What is the problem?
Poor Employability Regime
Financing vs.
Outcomes
Financing vs.
Delivery
Repair different
from Prepare; 6mo
Entry Gate/
Exit gate
Centre
regulates but
state delivers
Market
Failure
Not self-
healing; NOC
code mismatch
Apprentices;
Learning by
doing/ while
earning
What is the problem?
Poor Employment Regime
Employment
Elasticity; labour
Saving bias
Missing Middle;
hero/ zero?
Subsistence
self-
employment
No Backpack
Benefits
Unions; Minority
rule
Unorganized
Sector
Defunct
Employment
Exchanges
Why are these related and urgent?
India
Lopsided GDP;
agricultural
productivity
Next 10 years;
1/4
Migration;
People to Jobs
Inability to
afford social
security
Equality of
opportunity;
Naxalites?
Labour market
Outsider Access
Geography of
work; 6 lac,
Blr vs Manipur
Questions
• Employers• Getting a return on investment; 3 holes
• Free rider problem
• Is manufacturing employees a core or non-core activity?
• Private Trainers• Is the business model sustainable with yield?
• Unpack; financing vs delivery, focus?
• NGOs• Self-employment
• Inch wide mile deep vs. mile wide inch deep; focus?
• Baby vs Dwarf
• Public Policy• State vs Centre
• 19 ministries vs 2 human capital ministries
• Moving from outlays to outcomes
The Agenda
Matching
Entry gate;
Assessment
Apprenticeships;
Jaipur mela,
blending
Employment
Intensity; labour
laws
Employment
Exchanges; Career
Centres, PPPs
Exit
Gate; Credible
certification,
Signaling
The Agenda
Mismatch
Separate financing
from delivery
Measure and
publicize outcomes;
Information
Asymmetry
Link financing to
outcomes;
pay for yield
Separate Repair
from Prepare;
3 kinds of
Unemployability
Use students as
financing vehicles
The Agenda
Mismatch
Financing
InnovationsPerformance
Management
Using Technology
for scalability,
consistency,
support
Create Asset Bank Activate NSDC
The Agenda
Mismatch
Ramp state skill
missionsRamp MES
Tweak ITI PPP
policy, New scheme
Job Framework;
Redo NCO,
Curriculum vs. ICP
Enforce operating
principles
The Agenda
Pipeline
English;
Windows, Migration
Learning for
earning;
6 mo vs 15 years
On & Off Ramps,
Fungibility
Quantity vs. Quality
SSA
Regulatory
Revamp
• Binding Constraint; 30% of time
•Challenges– No MOE; politicians one-innings game, bureaucrats too small/big
– “Distributional coalitions”; Unions, Status Quo
– Concurrent list vs. Delivery systems; 1 PM vs 10 CMs?
– Unwillingness to make 2nd best choices; price, excellence, quantity
– Reform not good politics yet; know about reform
•Learning's – Satyagraaha argument works; Million negotiations of democracy, CNBC
– Solution not in Totalizing or Micro-fragmenting
– No. of statistically independent tries; Policies and Projects, Private and
Public, Financing and Delivery, Thinking and Doing; Woody Allen
– Private sector cannot substitute for state; ISB, State cant do everything
– But public policy is key; seen Government in 4 roles
– Strategy; Akbar’s Horse
Reflections - Public Policy Campaign
Closing Thoughts
• India
– WSJ in 1994
– Unique Time in India
– Missed tryst with destiny; 300 million
– Sins of Omission vs. Commission
– Change in democracy?
•Way Forward
– Move into execution; all ideas on table
– Resource question overrated; not more cooks, end stereotypes
– Unique entrepreneurial opportunity, triad
– Daily spectacle of tragedy; losing their future
– Talk in third person. Who? When?
Skilling IndiaIssues, Challenges and Opportunities
Hotel Taj Palace
New Delhi
October 28th, 2009