I recently bumped into a former colleague, at Geneva airport. By a quirk of fate, he had moved up the hierarchy and currently holds a key position in an organisation of India's automobile manufacturers.

There was much catching up to be done on this forenoon flight to Munich. I was sipping orange juice and he was already on his second sparkling wine downing the insipid liverwurst sandwich.

Our discussion ranged over many topics, but his response to my question — on how the booming Indian automobile industry was coping with the skills shortage and mismatch — floored me. He said: “We are coping well — fortunately, because the automobile industry needs the bare minimum of the skills available in plenty within the Indian workforce”.

European investors are aware that the Indian labour market is wrought by issues such as educational and skill mismatch.

As a member of the India Advisory Board of a well-known European automotive multinational, I can say a key topic of discussion at board meetings is the scarce talent, growing skills shortage, the challenges of retaining skilled employees and competitors poaching best talent.

Several European companies operating in India have put in place financial and non-financial incentives to retain talent and have redoubled measures to train employees with the required skills, with greater emphasis on apprenticeships and internships.

NSDC mandate

For European investors, evidently, the so-called ‘demographic dividend' is losing its sheen. Other than making tall claims, the government seems to be doing precious little to restructure and reorganise the labour market system.

We seem to be in a terrible hurry to spend $10 billion to buy combat aircraft but the Prime Minister's National Council on Skill Development, which has endorsed a vision to create 500 million skilled people by 2022, will spend not even half of that figure.

And, this in a scenario where only about 2 per cent of the Indian workforce has formal training as against an average of 75 per cent in Europe. And the National Skill Development Corporation is charged with the “responsibility of transforming India's skills landscape” with a mandate to skill 150 million youth in India.

I took a quick look at the web site of the NSDC. I did not find any extraordinary progress report or noteworthy achievements listed except concept papers and futuristic forecasts. Curiously, almost every sentence is in the ‘simple future' tense — proclaiming a resolve to do something in the future! What about now, I wonder?

Skill mismatch has been the focus of Europe's education and skills development policy debate for several years. Skill mismatch refers not only to dearth of skills or gaps, but also to qualifications, knowledge and skills beyond job requirements.

The European experience can provide India with new insights to address skill mismatch. For instance, in the German system of vocational education and training, the Federal Ministry of Labour and Social Affairs spends about 3 billion Euros annually on the apprenticeship system. The system absorbs 5,00,000 trainees, each year.

It is estimated that German enterprises, too, spend on average 9,000 Euros on the training of each apprentice. Large technology-intensive enterprises often run their own training centres.

A matter of mindset

It is clear that there has been a transformation in the way Europeans consider ‘education and training' with regard to ‘work' and about the interrelation between them. Europeans see it as integrated into a distinct lifetime learning process, displaying unceasing innovation and open to all.

This mindset has helped to ensure that many more people, businesses and public bodies recognise the value of skills, within the EU.

In fact, it is this attitude that is helping the EU to recover from the current crisis. There is an ongoing sharing of information on surplus and shortages of skills, across EU states. Such sharing takes into account immigration policies and mobility.

Challenge for India

Although India is perceived by European investors as a nation that has a large, potentially restless pool of unemployable youth, European multinationals are eying India as a massive investment destination over the next few years. We cannot anymore hide our uneducated youth communities, unskilled workers or low-skill companies.

For that reason, ‘business as usual' is not an option. We need the right skills and we need to skill India up on a colossal scale and in quick time.

We require a significant change in our thinking about skills. Only then can the so called demographic challenge transform into an opportunity.

(The author is a former Europe Director, CII and lives in Cologne, Germany. blfeedback@thehindu.co.in )

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