Monthly Archives: June 2012

India and China: Pre Occupations with Skills Development. Shanti Jagannathan, Senior Education Specialist, ADB

I recently attended two events related to skills development – the first one linked to the Asia Competitiveness Forum 2012 in New Delhi and the second, UNESCO World TVET Congress  in Shanghai.

India and the People’s Republic of China attract popular attention, and comparisons are common. As two giant economies with high rates of growth and potential for increasing influence in world markets, they offer much scope for discussions on policies and strategies.

The priorities for skills and training in the two countries have many similarities: both acknowledge that it is talent and high skill levels that will determine competitiveness in the times ahead, particularly talent for innovation. Both have an interest to move up the value chain to compete in higher value added manufacturing and services. Skills development is expected to be a key driver to facilitate their transformation from a low-end manufacturing to more sophisticated, service-oriented and innovative economies. Corporations in PRC aspire to move from ‘Made in China’ to ‘Created in China’. India announced 2010-2020 as the ‘decade of innovation’ that includes setting up innovation centres of excellence in different frontier areas.

Skills development is high on the agenda in national plan priorities for both countries – India has the target of creating a pool of 500 million skilled works by 2022. In PRC, the National Medium and Long Term Talent Development Plan for 2010-2020 puts emphasis on vocational training and employment promotion.  New and innovative public policy instruments are being directed towards TVET. In PRC, the development of vocational training parks such as the Tianjin Vocational Training Park is an example of a dedicated large scale facility to promote vocational training connected with the needs of enterprises. Allocating a third of the Shanghai urban tax to education, particularly TVET, helps to increase financing for the sector. The Government of India is setting up a credit guarantee fund to encourage students among weaker sections to go for higher technical and professional education. In 2011, 3.95 million TVET students received government aid in PRC. The World TVET Congress advocated a transformational role for TVET.

It was clear from the presentations that both India and PRC need TVET not only for higher order manufacturing and innovation (which is a high priority for avoiding the ‘middle income trap’), but also for social equity. The overwhelming share of informal labor markets in India poses a challenge to skills development. About 11 m small and medium enterprises (SMEs) in the country contribute to an estimated 7% of GDP, 40% of manufacturing output and 60% of exports. The Government of India is actively promoting the concept of clusters to support Micro, Small and Medium Enterprises (MSME). In PRC, skills development for accelerating development in rural and impoverished areas has been a key priority through programs such as the Sunshine Program for rural labor transfer training. Both countries are actively encouraging the contribution from industry and the private sector. In India, the unique private-public partnership model of the National Skills Development Corporation follows a results-oriented approach to skill development and has the target of skills development of 150 million people by 2022 and assuring employment for 70% of those. PRC’s policies to encourage industry-school partnerships with students spending about a third of their training period in enterprises strengthens much needed employability.  Inequality is a critical issue that both countries need to grapple with – the gini coefficient has worsened in both counties.

Thus the three dimensional lens (economic, equity and transformative) attributed to TVET by the forthcoming world TVET report seems quite appropriate.