India’s population explosion will make or break its economy

India's newspapers are booming

India’s demographics are mind-boggling: By 2020, it will have 900 million people of working age, and the average age of its citizens will fall to 29. Two years later, it should pass China to become the world’s most populous country.

This army of workers — tens of millions of young people enter the workforce each year — could be the key that finally unlocks India’s vast potential. Millions will be lifted out of poverty if they’re able to find good jobs.

But unless India makes big improvements in how it educates and trains students, this demographic boom could instead saddle the country with another generation of unskilled workers destined to languish in low-paying jobs.

The need to train workers up — and quickly — is paramount. Currently only 2% of India’s workers have received formal skills training, according to Ernst Young. That compares with 68% in the U.K., 75% in Germany and 96% in South Korea.

It’s a problem spread across industries. The Royal Institution of Chartered Surveyors estimates that in 2010, India needed nearly 4 million civil engineers, but only 509,000 professionals had the right skills for the jobs. By 2020, India will have only 778,000 civil engineers for 4.6 million slots.

There is a similar gap among architects. India will have only 17% of the 427,000 professionals it needs in 2020.

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The problem? The RICS found that India’s education and professional development system has not kept pace with economic growth and is in “dire need for reform.”

In industry after industry, the same story is repeated. A recent survey by Aspiring Minds, which tracks workforce preparedness, found that more than 80% of India’s engineering graduates in 2015 were “unemployable.”

“The quality of training offered in most colleges is not at par with the high demands generated by tech industries,” said Preet Rustagi, a labor economist at the Institute for Human Development. “There is no regulatory body that keep checks on the quality of education.”

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Critics say India’s universities are too focused on rote memorization, leaving students without the critical thinking skills required to solve problems. Teachers are paid low salaries, leading to poor quality of instruction. When students are denied entry to prestigious state schools, they often turn to less rigorous private colleges.

“When IT industries boomed in India a few years ago, many below-the-mark private colleges emerged to cater to their needs,” said Alakh N. Sharma, director at the Institute for Human Development.

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Prime Minister Narendra Modi is racing to provide workers with training. His government is recruiting skills instructors, and turning old schools into learning centers. Programs strewn across various government agencies are being consolidated. Companies in the private sector are pitching in to help provide training.

The most pressing need, however, might be in primary education. Pupils in India are expected to perform two-digit subtraction by the age of seven, but only 50% are able to correctly count up to 100. Only 30% of the same students are able to read a text designed for five-year-olds, according to education foundation Pathram.

If the country’s unique demographics are to pay dividends, improvement is a lesson to be learned quickly.

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