Skill Development & Entrepreneurship
July 17, 2020

Skill Development and Entrepreneurship during COVID-19

Strategic shifts in times of COVID-19

The tectonic shifts in the marketplace can be a challenge or a great opportunity. Global supply chains may take a detour from China to India if we are ready to take on the challenge. This would require us to reinvent ourselves with a growth mindset. We need to have funding and incentives aligned. Focus on next generation skills with design led manufacturing and electronics. Finally, embrace the gig economy to facilitate demand proliferation.

The success of technology in supporting micro entrepreneurs lies in its ability to provide tools and services to simplify their functioning without adding the high additional overhead that most cannot afford. Technology will also help to create a safety net around these entrepreneurs and enable better monitoring and access to support. The second shift is in the increased focus on entrepreneurial and soft skills, and improving overall productivity of labour. Both job creation and improvement in wages for the blue collar workforce are contingent on improvements in productivity enabled by the three E’s of Education, Employment and Employability, which serve as the infrastructure of opportunity.

The final shift is in the need for developing the next tier of cities and towns. When the economy revives, it will likely be a more distributed revival, with a reduced burden on urban centers. As the migrant workforce chooses to work closer to home, industry will need to find ways to improve infrastructure for remote work, and models of distributed production and workforce participation.

Jobs and sectoral impacts

Just when we thought the lockdown will lead to job losses, the migrant population (or as Kerala better refers to them as Guest workers) have left en masse. This rural reverse migration will take toll on the unorganised sector for years to come. The returning workers do not have sufficient opportunities in the home states. They would need re-skilling to find means in alternate non-urban sectors. Micro-entrepreneurial support can help.

Meanwhile many sectors have ground to a halt and will see over 50% shrinkage, like hospitality which will see over 20 crore people hit. Some services will also be massively hit — beauticians, salons. Construction and allied services while hit may see a recovery with people seeking larger dwelling in times of social distancing.

The path to recovery seems paved with pragmatic solutions. Apprenticeship is a way to gainful experience. A platform for skills marketplace can help better information dissemination allowing both sides to be agile. It is heartening these times to find the sector coming together and enabling skilling collaboratively rather than with a zero-sum thinking.

Role of policies and governance

India is a unique economy. Behind the veneer of potential demographic dividend is a large missing middle class. If one is earning a mere Rs.88,000, one would be top 10%. Hence the economics of the country and policies need to be squarely aimed at the poor. Productivity is the key to creating reasonable impact with meagre resources at our disposal. Mere employment will not solve the problem. A human centric approach as suggested Prof. Amartya Sen might help. Responding at nanoscale, enabling individuals to achieve economic agency and enabling enterprise at the smallest level is called for.

There was a crisis brewing in skilling for the past two decades. While policies and governance has tried to play catch up with the need of the hour, the need for future skills have started tilting the scales. And now, the skill value chain has been severely disconnected with sectoral impact and social distancing stopping the slow progress in its tracks. In this hour it is critical to enable local level decision making and efforts to bridge gaps. Cluster based approaches, with recognition of prior learning and bridge learning will enable dislocated masses to slowly get back into productive employment.

Further with the half-life of skills rapidly falling, previous generations are no longer in a position to determine the best options and outcomes for the next. Therefore, skilling needs to be further democratised. Tamil Nadu has implemented an apex model in partnership with Japan International Co-operation Agency (JICA), as a 50–50 joint venture. Models such as these enable faster iterative thinking, essential to respond quickly in times of uncertainty and rapid transformation.

Upstream participation of Industry

The government has spent a lot since 2008 to solve the skilling problem in India — some to good effect, and some not. Market failures still exist. The skill gap has widened despite an uptrend in formalisation and skilled workforce joining the economy. Investment is still called for from a future of skilling perspective. Fixing parts of the value chain that need mending — like making investments linked to outcomes, thus making PMKVY more placement directed. Investing in high quality facilities that match the industrial need of productivity, and not mere employment. Enabling capex models to be converted to opex can ease this process. Co-pay models can create a virtuous cycle as well.

Setting up a skills passport for bringing visibility and encouraging market participation, whereby a worker can continually and verifiably keep adding to their skill repertoire. Further, assessment and skill recognition is still industrial era where intermediaries add less value and create more red tape. Embracing technology can automate this, and help make this transparent and market linked. A national skills registry, and a platform for discovery can help bridge market players to directly reach out and invest in employability.

Role of platforms

Traditionally much of the informal sector opportunities and growth have come through informal networks. Many professions run in families and social circles like driving and plumbing. With the rapidly changing scenarios the information asymmetry can lead to a lot of pain. Platforms can play a huge role in reducing the gaps. But will need innovating thinking to work at scale, and at a very local level across a less connected rural India.

With good platforms however local jobs and opportunities for entrepreneurs can mushroom. With platforms capable having vernacular interaction vital information can be gathered enabling federated measures where the problems will be most visible. Allowing for community measures and panchayat level mobilisation to reach the right targets.

Many new applications of technology can pave way to innovation solving intractable problems of the past. Moving from private and public and multi-sided commercial platforms, it is perhaps time to think of social platforms. A shared CV perhaps, or SME led apprenticeship demand aggregation, or access to financing and markets. Solving for a social need with crowd sourced data can bridge gaps in information.

A nation on mobile is essential to make technology useful to the last mile. A cultural reset may also come about as parents start allowing the girl child to access learning anytime, anywhere or the woman to start a home business. Yet even public infrastructure today like UPI can are yet to see maturity. Consumer focused design is essential enable usefulness and adoption. Openness in facing up to the past problems is essential.

Virtual learning and remote learning

Digital transformation is no longer a buzzword in silicon valley. Suddenly our entire education systems has progressed from 1900s to 2020 overnight. Learners can now learn from anyone, anywhere, any time. Data driven insights, VR-AR enabled almost real simulation and adaptive intelligent systems are driving almost same outcomes and in some cases even better. For example professions hitherto difficult for women because of social stigma or perceived danger like welding and construction are becoming open to all with non-judgemental technology.

While learners benefit from these advances, one must not put the cart before the horse. The educators are still of a previous era with tools and techniques that will not easily transport to the digital world. Distance learning needs to accommodate and carry along the educators by making tech accessible.

While the world has found new tools and toys. The needs have not changed. Technology should still have the learner in the center. Skilling and entrepreneurship are just a means to the end. Interventions should need to a productive lives. Life skills will continue to be paramount to enable lifelong growth beyond the first step of employment. Dignity and equity should be the eventual outcome.

Collaboratives/Collectives for Mass Entrepreneurship

The stereotype of an entrepreneur needs remaking. The unicorn sitting in a glass building with a bevy of funders on one side and an exit plan on the other has its place, but India probably needs a firefly.

Hari Krishna lost his construction job to COVID and could not provide for his elder parent and family of four. With atypilcal chutzpah he managed to raise some funds to get a push cart and sell vegetables. When this was confiscated by a cop he lost, along with his means to life the courage to live that set him on his path, and took his life. There are a million fireflies like him who take to an enterprise out of need and as a way of living. Not to exit anywhere.

The ecosystem needs to enable fireflies. Encourage them to seek freedom while preparing them for the incredible odds. Equip them with the functional knowledge but more importantly open them to the essentials of systems thinking and complexity so they deal with forces much larger that impact the business. Teach them the power of collaboratives, so in hard times one can find power and wisdom in partnerships. As Mahatma Gandhi said, policy needs to operate in a paradigm for the weakest in the society. It is on them the rest of the economy is built.

Challenges and the way ahead

The future of skilling seems to point to four Ds — democratisation, data, digital and dematerialisation. Mobile will be the new school — we need every learner to have one. As last mile connectivity will accelerate the system will need to dance in step by aggregating critical data, making it free openly available and drive skilling adoption intelligently through digital means perhaps solving mobilisation problems by making it parent-centric. Accessibility improves with cloud telephony and AR/VR applications aided by hyper-local assessment. Online universities should become a norm if policies back them up with recognition and modern frameworks to take full advantage of the situation.

Several sections of Indian economy need to shift from informal to formal employment. There is a likely shift to the next tier of cities, triggered by government’s efforts to revitalise the rural economy. The skilling sector needs to be agile in meeting the new demand triggered by these trends, and gear towards re skilling of the workforce towards industries that will revive and grow in the post-COVID normal. Apprenticeship will emerge as a model to improve employability in the short term, particularly in the MSME sector.

Entrepreneurship, particularly mass entrepreneurship will play a critical role in economic revival and job creation at a local level. Policies of the government need to be geared towards promoting mass entrepreneurship and making it aspirational for the youth of the country. The skill development sector can help in creating collaborative platforms for such entrepreneurs to come together, acquire skills, learn and experiment, and function as a support system and safety net for the collective.

Pressure Points

  • Uncertainty in skilling for urban livelihoods due to migrant exodus from cities
  • Gig economy driven by tech platforms will see better skill and price discovery
  • Demand for digital platforms and delivery mechanisms
  • Development of entrepreneurial and 21st Century skills is more critical than ever before
  • Need to focus on skill development for rural livelihoods and entrepreneurship

Written by Ram Ramalingam, Head — Products, Research, Technology ,Innovation and Action at The/Nudge Foundation with inputs from National Skill Development Corporation, G.A.M.E and DeAsra Foundation

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