April 04, 2020
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We Need 'Nano Unicorns' For India To Succeed | By Subroto Bagchi

Thousands of skilled people creating small units with risk capital is what the country needs today

We Need 'Nano Unicorns' For India To Succeed | By Subroto Bagchi
Photograph by Getty Images
We Need 'Nano Unicorns' For India To Succeed | By Subroto Bagchi

When I took on the assignment of heading Odisha’s Skill ­Development Authority, I had just one ask from Chief Minister Naveen Patnaik. That I wouldn’t be available to him for the first 30 days. I was myself new to skill development and government, so I wanted to spend the first 30 days doing my own skill development! For this, I decided to travel to the 30 districts of the state by road—and ended up covering 7,700 km, roughly the length and breadth of India added together. It was the summer month of May, and day-time temperatures soared to 48 degrees. Just right for revelations—not sudden epiphanies; rather, ones that accumulated over time.

At the end of my journey, I became clear about some key issues. Primarily, it centres around the question of how to create employable skills for school dropouts. Three years into my task, as we try newer ideas and push the envelope, I have no doubt that these are the issues that really matter—and all of us would do well to focus our energies on these with clear eyes, without swimming in data, reading reports and listening to experts.   

The first problem: information asymmetry. When I hit the road, I was amazed to see the knowledge gap between young people who actually need the skills and the jobs on the one hand, and the government that facilitates long- and short-term skill development, the agencies that undertake skill training and the employers themselves, on the other. They simply do not communicate among themselves. Each has a partial view of the task on hand. Among them all, we in government tend to think we are doing a great job of communicating. But in reality, we speak to ourselves. The profusion of full-page advertisements announcing myriad government schemes is a colossal waste. At the level of the school dropout, there’s only information overload and attention deficiency.

Who are the people who can fix the information asymmetry? The district officials, school teachers, the village sarpanch. But first, they must together go on a conducted tour to an ITI, a PMKVY and a DDU-GKY centre to know what happens there. Most government skill training is free, but mobilising trainees is a herculean task. And these are the people who can motivate and guide a skill-aspirant.

Photograph by Getty Images

As a society, we treat skilled individuals shabbily. It’s apartheid of a different kind.

The second problem is a paradox we are all aware of: social stigma. It discourages young people from taking up skill training. There’s a deeply ingrained bias against people who work with their hands. A government peon gets upwards of Rs 20,000 a month, a public-sector driver makes twice as much, but an ITI-trained welder starts life for a pittance of Rs 6,000-8,000. There are aspects beyond depressed wages that make skills non-aspirational. As a society, we treat skilled individuals shabbily.

It’s apartheid of a different kind. When an electrician or a plumber comes to fix something at home, we ask him to remove footwear. It’s unlikely that he is offered a cup of tea and, in case he is, it’s not served in the cup the household uses for itself. We don’t say thank you to a tailor, a barber or a security guard.

Despite all that, many young people do line up at a skill development centre and learn how to run a high-speed industrial sewing machine, take care of patients in a hospital or drive a dumper truck. But all these jobs are far away from where they have grown up, often thousands of kilometres away, in alien cities. Many educated people seek simplistic solutions to this. They ask, why can’t jobs be where people are? Why are we crowding the cities? Creating job opportunities in the villages is largely a utopian idea. Even as we create the needed infrastructure and the required entrepreneurial boom, it would take decades before we can create enough job opportunities outside the cities. Additionally, moving to a city often gives a young person a sense of freedom we cannot deny. Thus, for a long time, most jobs would be in the cities and displacement is inevitable.

People can deal with displacement only if they are paid well. With the kind of wages we pay our workers, they can only rent accommodation in a slum. In contrast, government servants wouldn’t accept a transfer unless comfortable quarters are part of the package. Elected representatives have their elite bungalows reserved for them. Public sector undertakings build colonies even as they start their plants. The military has its cantonments. For the ITI kid, there’s only the ghetto. And if it’s a she, we must add personal safety to the bucket list of risks in moving to a new place.

While talking about skills, often there’s talk about entrepreneurship. Could some of the skilled workforce turn to micro-enterprise? Yes, but truly speaking, this requires making available risk capital to a young skilled worker. The operative word here is risk capital, not lengthy paperwork-based, collateral-driven bank loans. We need a paradigm shift to comprehend this.

Most Indian employers feel they are saddled with skilling as the government has failed.

Consider this: India has so far given the world 14 Unicorn companies. A Unicorn is an internet business with valuation in upwards of a billion dollars. For this, the start-up entrepreneurs don’t seek a loan, they don’t pledge parental property; they seek risk capital. As much as we need the Unicorns, India would succeed only when we create thousands of “Nano Unicorns”. People who get a small amount of risk capital to start a small entity that can be scale up beyond self-employment to create one or two jobs. But like the Unicorn, the Nano Unicorn must be liberated from the fear and financial consequence of possible failure.

Now, capacity creation. Most of us tend to look at education and skill development through the same lens—as educated people with no physical skills (or at least non-reliant on them to bring home the bacon), we simply do not know how skills are transferred. There are two fundamental differences between imparting education and transferring skills. In the former, one professor can sheep-dip an entire class of economics or physics students. It’s okay if the best students know the subject only 90 per cent well. But consider skill development: here you cannot sheep-dip an entire class of welders or nurses. To each, the transference must happen on a one-to-one basis. Even as simulation can take away some of that effort, a time comes when one must yield the real welding-gun or catheter to be inserted into a patient. Unlike 90 per cent proficiency in economics and physics that can get you the laurels, you cannot do a 90 per cent job in welding a gas pipeline or in inserting a catheter without killing someone.

This is where trainer quality becomes supremely important. India has a huge gap because most skill training agencies are just shops living off government money. These are not the places that can attract and retain high-quality trainers who see training as a calling and a paying career.  

I must raise the issue of employer involvement here. Unlike the IT industry that invests heavily and upfront in human capital development, most Indian enterprises see it as a combination of avoidable cost and nuisance. In 2017-18, the IT sector’s contribution to India’s GDP stood at 7.9 per cent. Today, it directly employs close to 4 million people and, indirectly, another 12 million. This was pretty much zero in 1990. These 16 million world-class jobs got created because, beyond greed, entrepreneurs saw this as a worthwhile thing to do and took upon themselves the task of building human capital.

Barring a few enlightened private sector captains and the public sector, when it comes to skilling, most Indian employers believe they are saddled with the task because the governm­ent has failed. What India needs is a generation of patriotic businessmen who look at the task as a never-before opportunity to participate in human transformation.

Never before in the history of humanity have we seen such a large number of economic refugees in their own country, trying to cross a social chasm and the only power that can make it happen is skill development. Skill is an amazing thing. Beyond livelihood, it gives people their identity and, done well, the insurance against the ­inevitable odds of life.

Subroto Bagchi is Chairman, Odisha Skill ­Development Authority

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