Educated, But Not Skilled: India’s Skill Deficiency Hampering Tech Economy Growth

Educated, But Not Skilled: India’s Skill Deficiency Hampering Tech Economy Growth


India’s working-age and student population is estimated to grow beyond 600 Mn in the next couple of years

India’s education system ranks among the worst in the world when it comes to human capital contribution

According to Datalabs by Inc42, less than half of the tech workforce in India has employable skills

Doctor or engineer? It’s a question perhaps every school student in India is asked at one point or the other. These two professions have been the go-to choice for Indians not only because there are plenty of options in terms of colleges and universities, but also because India has always had high employability quotient for doctors and engineers. But these patterns have had an adverse effect on many other parameters, particularly skill development and tech talent for the new-age economy.

And this predilection has largely stymied the mindset of students as well. Few are able to look beyond the present job market and look at what skills future jobs might need. That’s where India’s skill deficiency and talent gap rears its ugly head.

In the context of the digital economy, this talent crunch has had an adverse effect on the employability of Indian tech workers. Many only have basic knowledge thanks to years of simply cramming things and learning by-rote.

In its latest report on the edtech sector, DataLabs By Inc42 has analysed the market from the point of view of startups which are operating in the skill development sector. The report — The Future Of India’s $2 Bn Edtech Opportunity Report 2020 — unearths the trends that matter and the sub-sectors that have the biggest potential.


How Edtech Is Solving Skill Gap In India

With industrial revolution 4.0 knocking the doors of every industry, there is an ever-growing need to upgrade skills according to new-age technologies. Companies are opening up newer roles such as data scientists, machine learning and predictive analytics experts, and algorithm specialist.

Zishaan Hayath, CEO and cofounder of Toppr, a popular online learning app, told Inc42, “The problem with the traditional Indian education system is its ‘one-size-fits-all’ approach that fails to take into account the varied abilities of the students they’re trying to educate. This, combined with the questionable quality of education in schools, leaves students in the lurch after they graduate, as they simply don’t have the skills to get good jobs. The second issue is, of course, that industries are evolving at a rapid-fire pace and potential employees have to stay on their toes and adapt to the changes.”

A recent report titled “India Skills Report 2019,” states that the Indian workforce is estimated to increase to approximately 600 Mn by the year 2022 from the current 473 Mn. As the workforce will increase by about 27% during this period, the overall composition of the unorganised sector is likely to change from 92% and 8% today to 90% and 10% in 2022.

The report further states that the major forces impacting these shifts are that of globalisation, expanding the domestic Indian market and adoption of new technologies like AI, robotics, blockchain, and Internet of Things (IoT) by Indian companies and the industry at large.


Limited availability of the resources required for technology and experience-based learning in the Indian education system has only increased multifold the scope for edtech startups, which are offering short-term courses ranging from three months to one year.

According to DataLabs analysis, more than 4,450 edtech startups launched in India, of which about 25% of them shut shop.

Neetin Agrawal, CEO and cofounder of Dronstudy which offers video tutorials by IIT faculty told Inc42, “Edtech startups are innovating their models to fill in the gap in the Indian education system. This year will see a number of trends getting explored to take the industry a notch up. Implementation of AI, vernacular learnings, personalization, data science, OTT educations, etc, are some of the major trends to follow this year.”

Why Skill Development Is The Need Of The Hour

Learning is an everlasting process. This stands true to the journey of every human being from the time he joins the conventional schooling system and continues until the very end. This opens the scope for educational institutes to offer programs and tech-based solutions for a variety of categories.

From K-12 and test preparation to skilling and learning management systems, edtech startups have branched out to cater to various submarkets. As per analysis on data recorded by DataLabs for the edtech market, more than half of India’s workers will require reskilling to meet the talent demands of industrial revolution 4.0 by 2022 — emerging skill requirements are primarily focused on areas such as technology-led design and programming, complex problem solving, reasoning, ideation, emotional intelligence, critical thinking, and analysis.


In 2018, with a score of 0.44 on a scale of 0 to 1, India ranked 115th in the Human Capital Index (HCI), much lower than the average global score. The HCI, which covers 157 countries, gauges the amount of human capital that a child born today can expect to attain by age 18. The index determines the productivity of the next generation of workers compared to a benchmark of complete standard education and full health. It measures three factors: survival, expected years of quality-adjusted schooling and a healthy environment.

On the need for skilling edtech platforms, Agrawal of Dronstudy said, “Undoubtedly there has been a gap when it comes to skilled youth. Even in technical fields like engineering, there has been a dip when it comes to employable youth. Providing refined courses and education focused on skilling and reskilling can enhance the overall workforce quality.”

He added that tech companies are now tying up with edtech platforms to train their manpower and prepare a future-ready workforce.”

According to the International Labour Organization (ILO) estimates (in PPP terms), the output per worker in India is the lowest among BRICS nations. It is 97% lower in comparison to the world average. This indicates that the efficiency of the country’s workforce is relatively lower in comparison to the world average. Our report further analyses that the very preference of the Indian education system on high grades over skill development is the main reason behind the poor labour efficiency in the country.

Sumeet Jain, cofounder of Yocket, an edtech startup that provides a solution for students planning to study abroad, believes the right choice of course and college can make a big difference in employability. There is a big disconnect between the colleges and industry, this is a place where edtech can help, he said.

“Skill development is a big elephant in the room. Indian engineers have been unemployable, according to Nasscom. If we don’t focus on skilling and reskilling and upskilling, the demographic dividend will very soon turn into a liability. ”

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

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