Making skills self-healing

Investment competition between states is increasing even as opportunities for offering investment tax incentives are diminishing. States are left with three levers for differentiation — ease of doing business, infrastructure and the skills of their labour force. Apprenticeships are a non-fiscal alternative to dead-end sub-sidy schemes such as the National Rural Employment Guarantee Scheme (NREGS) but don’t get the attention of state governments because of real and imagined reasons: central government in the driver’s seat, employer reluctance, student unwillingness, low social sig-nalling value, etc. But the natural learn-ing-by-doing and learning-while-earn-ing make apprenticeship more sustain-able, scalable and self-healing than other skill programmes.

We suggest that each state set up a State Apprenticeship Corporation (SAC) as a public-private partnership co-chaired by the chief secretary and the chairman of one of the state’s largest private employ-er. SACs will anchor programmes on state strengths such as tourism in Rajasthan, information technology in Karnataka and manufacturing in Tamil Nadu; target employers with different strategies for companies headquartered and those operating in the state; make employers volunteers by simplifying procedures and recognising perform-ance; create matching infrastructure, and enable higher education linkages.

SACs can work with the Board of Apprenticeship Training under the Ministry of Human Resource Development and the Regional Directorates of Apprenticeship Training of the Ministry of Skill Development and Entrepreneurship to open state offices. SACs could operate from an employment exchange in a state capital and slowly add apprenticeship offerings to employment exchanges across the state. SACs would create an interface suite (website, mobile app, and call centre in multiple languages) for employers, industrial training institutes, polytechnic colleges, private colleges, and students to match demand and supply. Most importantly, SACs would facilitate academic credit for apprentices by partnering with universities within and outside the state. India’s education system is imbalanced—we have 20 million people in physical college classrooms, three million in distance-learning classrooms, but only 300,000 in apprenticeship classrooms—even though we should be indifferent to the mode of delivery. Degrees and apprenticeships complement each other: one has social signalling value, the other employability signalling value, so states can inno-vate in their convergence. Over time, SACs could work with school dropouts by mobilising subsidy money (NREGS, etc) to subsidise apprenticeship stipends, but this should be done in phase two and only after putting in place appropriate processes and plumbing to avoid fraud.

Nobel Laureate Daniel Kahneman says, “Most successful pundits are selected for being opinionated because it’s interesting and the penalties for incorrect predictions are negligible. You can make any predictions you want, and later people won’t remember them.” Policymakers can try but will rarely predict where jobs are created. Apprentices can make the system self-healing — the global experience in this regard is positive. Germany has Europe’s lowest unemployment rate because of apprenticeships, and UK has found that employers gain 26 times their investments on apprenticeship stipends. Recent amendments to the Apprenticeship Act of 1961 create the space for innovation, scale, and higher education linkages for state governments. If they don’t take advantage, then who will? And if not now, then when?