Today, India stands as one of the countries with the largest youth population with a whopping 62% belonging to the working age group (15-59 years). With over 54% of its total population below 25 years of age, it is slated to become the world’s youngest nation by 2022. This demographic dividend not only provides a huge reservoir of manpower, but also draws focus towards making this talent pool employable. As one of the countries with currently the highest youth population in the world, India faces its greatest opportunity and challenge.
Skill development is seen as an essential catalyst to transform India’s demographic dividend into a demographic advantage. However, research corroborates that only 1 in 20 people in India receive formal skill training. The Government of India, under its ‘Skill India’ mission, has initiated a number of schemes to achieve this end. Skill trainings, however, are fraught with challenges. First of all, India needs to train 20,000 trainers annually, and equip them with varied skills. India currently has the capacity to produce only 8,268 trainers per annum. Also, a study by NITI Ayog states that the pace at which job are being created, is not speedy enough and those that are created are of poor quality. To top it all, a report clearly shows that technology is putting 25-30% of jobs at risk today. If sufficient job opportunities are not created to correspond to the number of individuals skilled, India runs a risk of turning its demographic dividend into a demographic disaster.
Considering the vastness of this challenge, an important aspect that needs to be further strategized and strengthened is the promotion of self-employment and imparting skills on micro-entrepreneurship. Micro-entrepreneurship holds the promise of the development of the per-capita income of an economy by generating immediate job opportunities at much lower levels of investment. It effectively utilises untapped human and material resources.
To deliberate and dialogue on the scope of self-employment as a sustainable option for newly skilled, up-skilled and re-skilled individuals and the best practices to operationalise this, a panel on Skilling – A Building Block for Self-Employment and Entrepreneurship was held. This panel discussion was part of UnLtd India’s learning journey series – Skilling Matters – conducted in collaboration with its partner J.P. Morgan.
This blog will highlight the key insights and learnings brought out by the panel on promoting self-employment and micro-entrepreneurship to transform India’s demographic dividend into a demographic advantage.
Major job creators today are small and medium enterprises (SMEs)
A large number of job creators today are SMEs and bottom of the pyramid (BOP) jobs, thus serving as a rich pool for employment generation. To capitalise best on this resource requires efforts in two directions:
-strengthening existing SMEs and entrepreneurs to scale and expand their business
-facilitating the creation of new SMEs through training and hand-holding in hard skills and entrepreneurship training
Entrepreneurship has to be inculcated and not taught
The skills required for successful entrepreneurship are highly subjective – they vary across different domains/sectors and they vary across cultures and geographies. However, there are certain universal traits that are essential and are the basis for early identification of entrepreneurs – mental agility, learnability, self-efficacy, grit, experimentation and self-awareness. These are aspects that cannot be taught to an individual in course of skill training, but requires long-term experiential learning. Skill trainings are the first platform to identify candidates who have the potential to be trained and groomed as entrepreneurs.
Hand-hold a new/early stage entrepreneur till business reaches ‘minimum stability’
New/early stage entrepreneurs might often lack the knowledge on basics like how to avail a loan, accounting, measuring profits etc. A clarity on these concepts of running and sustaining a business define the ‘minimum stability’ for a business to function. It is ideal to support and hand-hold a new entrepreneur till he/she achieves minimum stability.
Community-based entrepreneurship models are best suited to achieve scale
When larger communities and groups take responsibility for growth it takes place in a much more structured and sustainable manner. A successful model of this is the National Rural Livelihood Mission’s (NRLM) entrepreneurship model. Creating community-based organisations (CBOs) as a platform for group entrepreneurship enables members to give strength to each other and the concept of savings and accounting gets ingrained and becomes a norm. This is an important strategy for growth and scale.