India – A growing skills gap IBM finds

India has significant socioeconomic advantages over other developing countries. A thriving entrepreneurial culture, strong investor confidence, a vibrant diaspora, a young enthusiastic workforce, supportive government initiatives and growing institutional engagement combine to form a solid platform for a robust, internationally competitive economy. But beneath the surface, several challenges are becoming increasingly evident regarding the availability of skilled labor.

A majority of Indian executives surveyed in a recent IBM Institute for Business Value (IBV) global skills study said the quality and quantity of skills in the country’s workforce are at least comparable to those of other countries, and many reported them to be superior. However, only 40 percent indicated new employees recruited in local labor markets have the requisite job skills. A dynamic, responsive higher education system is crucial for India to redress current skills challenges and realize its full economic potential. But to serve industry and citizens fully, the system requires significant transformation.

In an effort to identify a higher education model that better aligns India’s educational
activities with industry imperatives, the IBM IBV conducted a survey of almost 300 academic, corporate-recruiting and emerging education leaders in India. In addition, we analyzed results of recent surveys of startup entrepreneurs, venture capitalists and corporate executives. We found that higher education leaders and institutions need to evolve traditional educational models; address key challenges in filling the skills gap; and embrace applied educational experiences, emergent technologies, and industry and government partnerships to keep up with today’s ever-changing skills requirements.

A growing skills gap

The Indian economy has enormous growth potential. While many countries’ economies face aging populations and declining markets, India benefits from a young, vibrant population and expanding economic opportunities. As a consequence, entrepreneurship in India has grown rapidly. From 15,000 Indian startups in the 1980s, the number has increased to almost 100,000 in the 2010s.

And India’s economy and entrepreneurial community are becoming ever more vigorous. Between 2014 and 2015, external funding of technology-oriented startups more than doubled, and by 2015, more than 80,000 people were employed in startups. What’s more, 97 percent of India’s startups planned to continue hiring in 2016.

But India’s ongoing growth and development is not assured. In our recent report on Indian entrepreneurship, 70 percent of India’s venture capitalists surveyed indicated that startups are experiencing difficulties scaling due to challenges obtaining employees with the right skills. Of even greater concern is that, according to estimates from a recent employability survey, as many as 70-80 percent of India’s engineering graduates are reported to be functionally unemployable.

Chosen excerpts by Job Market Monitor. Read the whole story at Upskilling India: Building India’s talent base to compete in the global economy



  1. Pingback: India – Jobless rate at multi-decade high | Job Market Monitor - February 1, 2019

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