Learning to work

PARTHA MUKHOPADHYAY

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MUCH of higher education is now seen as instrumental – as training rather than preparation. The focus is more on learning to work rather than learning to learn. It is argued that the ‘escalation of economic globalization has driven a demand for instrumental education – that which can be clearly tied to the goals of production, productivity and employment’1 and that ‘academic majors and programmes that directly affect the economy…are increasingly elevated over other fields of study.’ 2 India seems, at first glance, to exemplify this trend quite robustly, with a sharp rise in the number of professional education institutions in disciplines such as engineering, medicine, nursing, and so on, mostly in the private sector, specialized ‘deemed to be universities’, and the growth of self-financing courses in our universities.

While extremely important, this is not a debate I engage in. Rather, I focus on that part of higher education that has been unashamedly instrumental, to the extent that some would even deny that it belongs within the fold of higher education, viz. vocational education. As higher education supposedly becomes more instrumental, what is happening to vocational education in India?

On the face of it, the existing system for vocational training in India is quite extensive. However, it is not performing. The report of the Second National Commission on Labour in 2002 points out the following lacunae, which can be grouped into three core problems:

1. Mismatch in the supply of training for trades and the kinds of skills that are in demand: (a) inadequate coverage of skill requirements; (b) mismatch in demand and supply relation; and (c) inability of small firms to hire apprentices.

2. Inadequate and poor quality of training facilities as well as training staff.

3. Procedural issues emanating from public ownership: (a) lack of flexibility in engaging trade apprentices within the same trade group; (b) lengthy and clumsy administrative process for record keeping and filling up returns; and (c) lack of incentives to encourage industries to modernize their training facilities.

To redress these shortcomings, the Second National Commission on Labour recommended, inter alia, a stronger link between industry and vocational training and private involvement in the improvement of training facilities.

 

Not all sections of industry have waited for the government to build a stronger link between industry and vocational training. In the face of rising demand for skills, there has been a strong private sector response from the organized sector3 in the form of backward integration. Just as industries and apartment complexes have established captive power plants in reaction to the lack of grid supply, and households invest in water storage and purification to cope with poor water supply, industry too has made forays into education in an effort to counter the skill shortage. The real impetus has come from the services sector, especially software and retail, areas where the existing vocational training establishments, like Industrial Training Institutes (ITIs) and private Industrial Training Centres (ITCs), have not had a presence.

The rise of specialized IT training providers like NIIT, established in 1981, and Aptech, started in 1987, is now well known. Recently, however, the IT industry has been in the forefront of demanding changes to the broader educational curriculum since their perception of the quality of the existing graduates is low. According to NASSCOM (National Association of Software and Service Companies), only about 25% of technical graduates and 10-15% of general college graduates are suitable for employment in the offshore IT and BPO industries, respectively.4 

To address this, Nasscom has moved into to skill-testing starting with IT Enabled Services (ITES). The Nasscom Assessment of Competence (NAC) aims to create a pool of talent for the ITES industry through a standard assessment and certification programme. The programme tests the aptitude of a candidate on seven different skill sets.5 

Besides testing, Nasscom has established a National Skills Registry (NSR).6 The database includes self-provided details of the IT Professionals (ITPs) with associated background check information. It includes personal, academic and employment details of individuals in the IT and ITES industry and every ITP registered in NSR is identified uniquely by photographs and fingerprints.

 

A test for the core IT sector, NAC-Tech has also been launched.7 It has two components: a self-administered on-line diagnostic test, which enables candidates to assess their preparation levels and the NAC-Tech certification test. Nasscom has also entered into MoUs with UGC and AICTE to strengthen professional education in line with industry requirements. A key component of this is a mentorship programme between a higher education institution and a firm.8 

In addition to Nasscom, individual firms have also engaged with training and supplementary education for their employees. WIPRO has had an Academy of Software Excellence since 1995. Apart from work experience, it offers a eight-semester (four years) off-campus collaborative MS Programme with Birla Institute of Technology and Science (BITS), Pilani. The Infosys programme, branded as Campus Connect, adopts a different approach, by supplementing education in a variety of colleges.

 

Launched in May 2004 with 60 colleges, as an ‘industry-academia collaboration programme to align engineering student competencies with industry needs’, it had grown to 500 colleges as of March 2008. Over this period, it has trained 25,000 students and enhanced the skills of 2000 faculty members. The core of Campus Connect is a 130-hour proprietary educational supplement for a batch size of 60-75 students that is integrated with the college’s academic schedule.9 A companion Soft Skills Programme is intended to develop students’ skills in communication, team work, corporate work culture, etc, which is delivered by alliance partners at a cost to the student.

Similar efforts are now being undertaken in other services sectors, where firms like Reliance have acquired training firms like NIS-Sparta from specialized training providers like NIIT and firms like the Future Group have announced plans to establish training institutes.10 The extent of remediation efforts being undertaken is evidence of the mismatch between education and skill needs, whether it is for the more generalized education pool of ITES and service employees or the more specialized pool of engineers from higher education institutions.

Other countries where skill development has been enterprise-led, such as Japan, have an expectation of a long-term relationship between the employer and employee. It is unusual to see such investments being undertaken by firms even though the turnover rate for employees in the IT and ITES sectors, as well as the retail industry, is quite high. Indeed, Infosys does not guarantee that graduates of Campus Connect will be offered employment, nor is it incumbent upon graduates to accept an Infosys offer, if one is made.

In determining their return on investment in programmes like Campus Connect, Infosys and other firms making similar investments thus bank on their reputations as superior employers and their large annual recruitment to ensure that a sufficient number of such graduates accept their offers so as to as to make their investment in the programme worthwhile. It is interesting to ask why, if this is the case for the services, are such initiatives not more visible in manufacturing?

 

In manufacturing and construction too, there have been similar initiatives, e.g., the adoption of training institutes.11 The Confederation of Indian Industry (CII) has launched a Skills Development Initiative.12 The CIDC (Construction Industry Development Council) has become quite active in this area, with sector specific ITIs and work-site training programmes for construction workers, with certification through the Indira Gandhi National Open University.13 

 

However, formal vocational education in these sectors has largely depended on the public sector Industrial Training Institutes (ITIs) and their private counterpart, Industrial Training Centres (ITCs). The reform of the vocational system in India is thus not just a matter of introducing private participation which is already extensive and long standing. Indeed, the number of private ITCs at 3717, far exceeds the 1780 ITIs though the average private ITC has only half as many trainees (107) as the average public ITI (207).14 Trainees at the public ITIs and private ITCs appear at a common certification examination conducted either by the National Council for Vocational Training (NCVT) or in some states, for some trades, the State Council for Vocational Training (SCVT). Despite their private provenance and therefore supposedly better market orientation, these private ITCs have not been able to play the kind of transformative role that service providers like Aptech and NIIT were able to in the services sector. Indeed, large scale training service providers have not emerged in manufacturing.

 

In a recent review, Gasskov et. al.15 find the condition of these institutes is below par. Their internal efficiency, measured by share of sanctioned strength utilized, the dropout rate and the pass percentage, is often low for a variety of courses, sometimes dropping to below a third. External efficiency i.e., market acceptance, is also low, the major reason being low demand from organized industry for ITI and ITC graduates, due in part to the ‘financial, management and operational inflexibility of ITIs and lack of incentives for them to deliver courses that more accurately reflect a potential demand for graduates.’ These institutes are characterized by:

(a) Geographical concentration: Private ITCs are more concentrated geographically, as compared to public ITIs, though both ignore the eastern region. Nearly 60% of the ITCs are in the four southern states with a further 12% in Maharashtra and Gujarat. While these states are also the industrial powerhouses of India, there may also be other factors at work, such as a demand for trained and certified craftsmen from the Gulf countries, which creates a derived demand for training in these states.

TABLE 1

Regional Distribution of ITIs and ITCs

 

ITCs (private)

It is (public)

Share of private in total

East

10.4%

9.4%

69.8%

North

18.4%

41.2%

48.3%

South

59.4%

19.1%

86.6%

West

11.8%

30.3%

44.9%

 

Interestingly, the share of private ITCs is also high in the East, where almost 70% of the institutes are private though the number of institutes, both public and private, in the eastern region is relatively low. This large private share is primarily driven by Orissa, which has almost half the total number of institutes in the region and where 90% of the institutions are private, but a large private share is also seen in Jharkhand and Bihar.

(b) Small size and limited trade offerings: ITCs have fewer trainees than public ITIs. In part, this is because the private ITCs offer fewer trades, preferring to concentrate on those trades that do not require large capital investment. This implies that trades such as diesel mechanics, machining (especially CNC machining), milling, etc., that need expensive equipment for providing training do not benefit from the private sector expansion in capacity. Note that these trades are also those that will be required in large numbers if manufacturing grows in India.

(c) Financial self-sustainability: Most ITCs are financially self-sustaining. Private ITCs, for the most part, charge market-based fees to recover costs. There is, therefore, an existing culture of user fees in industrial training. This, however, does not address the issue of equity in access.

(d) Industry linkage: The trainees have little exposure to industry while they are at the ITIs. Some ITIs offer a system of campus placement and maintain links with industry for that purpose, but this does not extend to training during the period of study and there is not much industry linkage in terms of curriculum interventions. The situation is not much better in the ITCs. Survey evidence in Gasskov et. al. indicates that the placement performance of ITCs may not be better than ITIs, especially in states like Andhra Pradesh where there has been a rapid expansion of ITCs.

From the discussion above, it can be conjectured that private institutions seem to emerge both when there is a rise in demand as well as a lack of supply from the public sector. However, the types of ITCs that have been established seem to be not much better than the existing ITIs in terms of industry linkage. Nor are they offering a number of relatively capital-intensive trades.

One is tempted to speculate on the reasons for the difference between manufacturing and services. The large employers in manufacturing are textiles and garments, food and tobacco products which account for 40% of the organized work force. Iron and steel, other mineral and chemical products make up another 20%. Compare this to the trades offered at the ITIs and ITCs, where fitters, electricians, motor vehicle and electronic mechanics and wiremen comprise more than half the units in these institutes. Diesel mechanics, turners, computer operators, civil draughtsmen and cutting and sewing make up another fifth. What explains this mismatch? Why did these industries, especially the first two, not demand a trained workforce in the same manner that an externally-oriented sector like IT and ITES did? Will the situation change as competition increases and quality and cost become more important?

 

It is not as if the government does not recognize the problem. Early in its tenure, in its first budget, the government announced its intention ‘to launch a programme in the central sector to upgrade 500 ITIs over the next 5 years at the rate of 100 ITIs a year... and create a public-private partnership (PPP) model for designing and implementing the scheme... to produce technicians of world standard.’16 As part of this, Institute Management Committees (IMCs), with participation from the private sector have been established for 492 ITIs in 28 states as of June 2006.17 

 

Taking the PPP approach further, in February 2007, the government proposed that ‘the remaining 1,396 ITIs be upgraded into centres of excellence in specific trades and skills under public-private partnership. Under the proposed scheme, the state government, as the owner of the ITI, will continue to regulate admissions and fees; the new management will be given academic and financial autonomy; and the central government will provide financial assistance by way of seed money.’18 The IMC is expected to improve the functioning of ITIs in areas such as (a) availability of machinery, tools and equipment, (b) training and development of faculty, (c) student placement and industry interaction, and (d) revenue generation. They are also expected to have better management information systems regarding institute functioning and student performance.

There seems to have been little learning from the previous experience however. Approval for this expanded scheme was accorded by the Cabinet Committee on Economic Affairs only on 25 October 2007 and the guidelines for the scheme were issued in the next financial year, in April 2008, with the last round of clarifications on IMCs being issued on 28 May 2008. Meanwhile, a National Policy on Skills Development has also been issued (see Box).

National Policy on Skills Development

THE National Policy on Skills Development has some positive features. Its broad approach appears to be to move to certification rather than training provision. To this end, it also proposes a Modular Employable Skills approach and recognition of prior learning to expand certification among persons who may not be in a position to acquire skills in a formal training programme, e.g., those employed in the informal sector. It also allows for multiple assessment and certification bodies to be accredited by the National Skills Development Authority.

However, it is stuck in the old groove in many other areas. On the core issue of labour market mismatches, it continues to be in planning mode. It states that ‘reducing such mismatch requires establishment of labour market information systems and human resource planning for reliable and realistic assessment of economic trends and labour market needs – at the national, state and local (district and block) levels. Accordingly, as a matter of policy, sector specific Labour Market Information Systems will be established at national and state levels, and area specific LMIS at local levels. Human Resource Planning exercises will be undertaken to bring out the anticipated supply and demand of skilled manpower for different skill groups, economic sectors and geographical areas, over different periods.’

This ignores the presence of a regional, if not national market for skilled labour and persists in the myth that an agency can somehow predict what requirements would be like in the future. This is also seen in an excessive reliance on mechanisms such as Sector Skills Council and Partnership Development Council, etc. to guide the process and the role accorded to activities like inter-ministerial co-ordination.

The public private partnership approach is seen as necessary only because the task is ‘just too large for the public sector to achieve on its own’ and the government is determined not to ‘abdicate its responsibility to set up lead institutions of excellence which serve as beacons and role models.’ The approach treats the private sector as an object of largesse, e.g., the recipient of concessional loans and as a gap-filling measure rather than recognizing the flexibility and responsiveness that needs to be developed in private training. Not much thought seems to have been given to the kind of regulation that needs to be developed to distinguish unscrupulous operators from serious private service providers, without stifling private initiative.

The use of IMCs as the core PPP mechanism for private participation has many limitations:

a) First, the provision of a long-term (30-year) loan of Rs 25 million and the flexibility given to the IMC in respect of 20% of admissions puts the government in a position of patronage vis-à-vis the IMC. The private sector has little at risk and therefore little incentive to perform.

b) Second, since the ITI continues to be owned by the state government, the IMC is limited in the capita decisions it can make. For example, it cannot dispose of scrap nor can it purchase immovable property

c) Third, the scheme gives the IMC only partial control over the institute since its role in respect of the activities which are being funded by the state government is only recommendatory. This division in management is likely to be cumbersome.

d) Fourth, upgradation of trades is limited to the trades supported by the National Council for Vocational Training (NCVT) and excludes those supported by the State Council for Vocational Training. This automatically limits the localization that may be necessary.

e) Finally, even on course content, one of the primary reasons for enhancing industry linkage through an IMC, any modifications to NCVT courses need be intimated to the DGET and if these changes are found necessary they will be introduced at the national level. Training on machinery other than NCVT machinery may be provided but such machinery should not be purchased out of the scheme funds. Both these restrictions arrogate a degree of knowledge to the NCVT, which it has done little to earn so far. It also presumes a national uniformity in course requirements, a feature that is not present even in university education, where each university can decide its curriculum.

 

Many other such issues can be flagged but the root cause is the inability of the government to provide both responsibility and authority to the private provider and hold it accountable. This does not mean that the public sector should exit service provision, but that even to run the public ITIs well, needs financial, management and operational flexibility, and stronger incentives, as pointed out in Gasskov et. al.

 

One aspect on which little has been said in the NSDP as well as the PPP approach is the issue of equity of access. There is currently little support in the form of organized loan availability for vocational education, though this is increasingly becoming an option in professional education.

Here, one has to choose between making loans more freely available or providing support to providers of education and/or loans. Once the employability of the graduates has been established, it may be possible to use the bank loans to finance vocational education even if full cost recovery fees are charged. At such a time, the public funding could move to a scholarship system but until such time one has to consider other support mechanisms.

One may question this claim since it would appear that prospective trainees have so far been able to afford the cost of education. However, this is partly because trades that had a high training cost have not been offered. If substantial investment in training equipment is required, full cost recovery through fees may initially be prohibitive.

Equity of access is also an issue in vocational certification, where the pre-payment of fees may be an issue for those who have to take the examination. The risk is that one may seek to achieve equity by lowering the fee to a point where effective test administration is not possible. In other presentations,19 the concept of ‘pay to fail’ has been advanced, whereby trainees who succeed in obtaining certification will be refunded the examination fee. Since the lifetime earnings of the certified workers will be more than that of the failed trainee, there is an inherent element of inequity in this approach.

At the same time, frivolous attempts at the examination must be discouraged. More nuanced methods include a graduated fee remission that declines with the number of attempts or a fee remission that falls sharply with performance, such that those that fail marginally are penalized less than those that fail abysmally (on the presumption that the latter group did not prepare and took the examination frivolously).

 

There is now increasing interest from industry and the involvement of industry bodies in vocational education. As the need for trained manpower is felt, the pre-eminent emerging trend is a pairing of industry and training. This is taking many forms, for example:

(a) Industries, especially in the service sector, are building their own links to training institutions and evolving their own certification schemes.

(b) Private ITCs being established/ adopted by industrial entrepreneurs to cater to their own requirements.

(c) Government is pairing ITIs with industry partners through Institute Management Committees and providing long-term loans for development.

However, this is not necessarily optimal from the point of view of completeness of the trainee’s education. In an economic environment that is likely to change many times in a typical person’s working life, it is important not only to learn how to work but learn how to learn. This is especially true for multi-skilling and the inculcation of a healthy attitude of innovation and experimentation. While industry backward integration and pairing may be necessary quick fixes, we run the risk of seeing them as permanent solutions. As in other sectors, the government seems content to limit its responsibility to the facilitation of private participation but even this is being done in a ham-handed manner, with mere tinkering around the edges and is unlikely to get the benefits that are expected. A more responsive vocational education system would have the following minimal characteristics: (a) service providers who are responsive to market needs but who not only teach how to work but also how to learn new skills, and who are staffed by competent instructors; (b) a funding support system that would allow potential trainees to borrow against their increased future earnings to support their education; (c) accreditation system that would enable potential trainees to make an informed choice across institutions; (d) a certification system that enables a person to provide a reliable signal of his or her abilities in particular fields; and (e) a certification system that is able to recognize knowledge acquired through experience and which can be modularly acquired

 

Given the last four, the first can automatically fall into place, given the level of entrepreneurship in this country and the demonstrated experience of training providers in the service sector. However, as of now, the NSDP potentially addresses only the last three and the IMC scheme does not appear sufficiently robust to foster responsive service providers. Most importantly, there is little thought as regards an inclusive and sustainable funding support system for potential trainees, apart from somewhat woolly notions of a National Skill Development Fund. Regardless, the future may still not be bleak, as manufacturing may make its own solutions, as the services sector seem to have done. If so, the government will have the luxury of continuing to remain obstructive rather than supportive.

 

Footnotes:

1. Nelly P. Stromquist, Education in a Globalized World: The Connectivity of Economic Power, Technology and Knowledge, Rowman and Littlefield, 2002.

2. Robert A. Rhoads and Carlos Alberto Torres, The University, State, and Market: The Political Economy of Globalization in the Americas, Stanford University Press, 2005.

3. The unorganized sector has always had informal methods to transfer skills, though there has been no mechanism as yet to evaluate the quality of these skills or enable the possessors of these skills to make them more visible to potential employers and customers in a transparent manner.

4. NASSCOM-McKinsey Report, Extending India’s Leadership in the Global IT and BPO Industries, 2005.

5. These are listening and keyboard skills, verbal ability, spoken English, comprehension and writing ability, office software usage, numerical and analytical skills, and concentration and accuracy. For further details, see http://nac.nasscom.in/

6. Currently, 58 companies and over 250,000 ITPs are registered (www.nationalskill sregistry.com)

7. http://www.nasscom.in/Nasscom/templates/NormalPage.aspx?id=53326

8. Some examples of these mentoring relationships are Zensar with VIT, Pune XANSA with Jammu University, and Pixtel Technologies Mentorship with ISB Engineering College, Ghaziabad, and Galgotia College of Engineering, Greater Noida. In addition, companies such as ITC InfoTech, Satyam Computer Services, Accenture, SUN, MindTree, Microsoft and Patni are undertaking Faculty Training Programmes. Nasscom is also piloting a ‘Finishing School’ for engineering graduates seeking employment. (See Nasscom Finishing School for Engineering Students – Nasscom Education Initiative, 2007.)

9. The recommended semesters for a Foundation Programme are the 5th and the 7th semesters of an 8 semester course of study, while that for the Soft Skills Programme is the 3rd, 4th and 5th semester. The course material for the Foundation Programme is provided by Infosys and is based on material it uses for its induction programmes, including assignments, case studies and a Student Project Bank that simulates live project situations, adapted but all other facilities are provided by the participating college.

10. http://www.thehindubusinessline.com/2008/04/06/stories/2008040650970200.htm

11. For example, Maruti Udyog adopted ITIs in Gurgaon and Rohtak, Liberty Shoes in Karnal, Sona Koyo Steering Systems in Nagina and Jay Bharat Maruti in Faridabad. See http://www.tribuneindia.com/2006/20060131/haryana.htm#3 and http://www. tribuneindia.com/2006/20060216/haryana. htm#9 and http://www.ciionline.org/ bookshop/images/july/skills%20 development.pdf

12. http://www.cii-skillsdevelopment.in/

13. See also http://www.cidc.in/post_diploma/partner.pdf

14. See http://dget.nic.in/schemes/cts/NumberOfITIs.htm. There are discrepancies in this disaggregated data and the data on total ITIs provided in the National Vocational Training Information Service accessed through http://dget.nic.in/lisdapp/nvtis/nvtis.htm

15. V. Gasskov, A. Aggarwal, A. Grover, A Kumar, and Q.L. Junega, Industrial Training Institute of India: The Efficiency Study Report, ILO, Geneva, 2003.

16. Part A of the Union Budget Speech by the Finance Minister (para. no. 23), 8 July 2004 at http://indiabudget.nic.in

17. http://pib.nic.in/archieve/others/2006/may2006/2years_upa_gov_may2006/labour_emp_2years_upa_gov_may2006.asp

18. Part A of the Union Budget Speech by the Finance Minister (para. no. 104), 28 February 2007 at http://indiabudget.nic.in

19. Ashok Kumar, ‘Skill Development Initiative (SDI) through Modular Employable Skills (MES)’, National Conference on Skill Building through Public Private Partnership, 5-6 October 2007.

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