Skill gap can cost India $1.97 trillion in GDP growth: Accenture

A report by global technology services company Accenture estimated that India could forgo up to 2 to 3 percentage points, or $1.97 trillion in potential cumulative GDP growth over the next 10 years if skill-building does not catch up with the rate of technological progress.

According to the report, this would mean a further increase in unemployment and widening income inequality in the country.

The report – ‘Fueling India’s Skill Revolution,’ says that a large number of people need to be skilled. This along with the institutional gaps, calls for radical changes in how training programs are developed and delivered. Incremental changes to education and corporate learning systems will not be sufficient, it says.

“We must offer more experiential on-the-job training and help people adopt life-long learning as their jobs are transformed. Digital tools and applications — like artificial intelligence, analytics and blockchain — will be essential in delivering these new learning approaches,” said Rekha M Menon, chairman and senior managing director at Accenture in India. “Intelligent technologies increasingly require people to hone more exclusively human skills such as creativity, empathy and ethical judgment.”

India is already grappling joblessness. IT industry body NASSCOM estimates show that of the 3 million-plus graduates and post-graduates that enter the workforce, a mere 25% of technical graduates and 10–15% of other graduates are considered employable in IT and Information Technology enabled Services (ITES) sector.

The National Skill Development Corporation estimates that construction, retail, beauty and wellness, road transport and highways, textile handloom and handicraft, electronics, furniture and fittings, tourism and hospitality, logistics, and automotive auto components and capital goods – together account for over 80% of the total estimated workforce that need to be trained.

By 2027, India will comprise of the world’s largest workforce, with one billion people aged between 15 and 64 years. The challenge is to turn this demographic dividend into an opportunity by taking necessary steps to address the skills gap.

“Organizations must recognize that they need to be innovative not just in developing products and services, but also in the way they offer learning opportunities that ensure their communities are ready for the future,” said Menon.

The report, released on Monday, recommends a four-pronged approach for government departments, industry bodies, academia, non-profit organizations and corporates to ensure that the country’s workforce has the skills needed for the digital economy.

These include: collaboration of multiple stakeholders including employers, education providers, startups and public agencies to work in a collaborative manner, use of blended learning models formats “that offer the optimal mix of in-person interaction, on-the-job learning and online learning.” India also needs to create skills-based learning path in schools and colleges, and build technology solutions that are, “affordable, device-agnostic, multi-lingual, and compatible with offline infrastructure,” the report adds.