India’s young population presents both a challenge and an opportunity. While the country is expected to have the world’s largest working-age population by 2030, it also needs to create 200 million jobs over the next 10 years to provide employment to its youth and to shift away from farming jobs. Unfortunately, the nominal wages for blue-collar jobs have remained stagnant over the past decade, leading to over-supply of talent in some areas, such as truck drivers, delivery boys, and warehouse operators. The country needs to find innovative solutions to address this challenge.
Opportunities for skill export
One potential solution is to unleash the potential of skill exports. The world is ageing rapidly, and many countries, such as Europe, are facing a shortage of skilled workers. For example, 35% of truck drivers in Europe are above 55 years of age, and only 7% are below 25 years of age. Europe alone needs 400,000 drivers today, a number that will cross 1 million in the next few years as old truck drivers retire. The global shortage of truck drivers is above 2.6 million. India can benefit immensely from sending its skilled workforce globally to fill these gaps.
In fact, India is already benefiting from remittances, which are at 100 billion dollars, up from 65 billion dollars in 2014/15. This is the highest in the world and double that of China. However, this is still only 2.8% of India’s GDP, which is half of the global average. India should aim to increase this to 5% of its GDP and aspire for 500 billion remittance inflow over the next 10 years.
Another area where India has a significant opportunity is education. India sent 7.7 lakh students to study abroad last year, a 68% increase from 2021. Assuming every student on average spends 1 crore for the course, this amounts to about a 100-billion-dollar expenditure on education outside of India over a 3-4-year course. Unfortunately, 30% of these students return because they do not get jobs. India needs to find ways to retain these students and leverage their education and skills to benefit the country.
Three big ideas
To unleash the potential of skill exports, India needs to create innovative solutions that leverage its talent pool. Here are three ideas that could help:
- Set up International Skill Universities – India should set up international skill universities based on the curriculum/standards of international skills and invite foreign employers to come down for placement fairs. These skill centers should use immersive AR/VR technologies to rapidly upskill talent and use AI-based real-time translation tools to improve the effectiveness of the skill workers in cultural and language adaptation. Private sector should be invited to set up these institutes initially, just like we did with engineering universities in 2003.
- Create a Digital Skills Passport – India should create a digital skills passport, which includes the verification of skills and personal data, issued by the government to build trust with global employers and governments.
- Study and create migration corridors for skilled talent – India should study and create migration corridors for skilled talent. For example, a truck driver earns INR 25,000 in India, INR 50,000 in UAE, INR 3 lacs in Europe, INR 6 lacs in Canada, and INR 8 lacs in the US per month. Rather than spending crores of rupees in foreign education and getting extra MBA and engineers, youth should be inspired to study in these international skill universities. Celebrate and inspire youth to work outside India.
India’s demographic dividend provides a great opportunity to address the challenge of job creation in the country. While the PLI scheme for manufacturing and service export can boost employment opportunities, there is also a need to explore the potential of skill exports to bridge the gap in the global workforce. India can leverage its skilled workforce to address the global shortage of skilled workers and increase its remittances. Setting up International Skill Universities, creating a Digital Skills Passport, and creating migration corridors for skilled talent are some of the ideas that can help India tap into this opportunity. It is crucial to encourage entrepreneurship, technology solutions, service providers, and ecosystem development to create a sustainable and thriving job market in India.