microfinance india summit 2009

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