Vocational training for MSMEs should change

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Developing and implementing a vocational skills development policy for micro, small and medium-sized enterprises (MSMEs) is a difficult exercise, especially for emerging countries. While the transmission of vocational skills should generally be demand-driven, MSMEs do not have the incentive or the fiscal/human capital or scale to train workers.

Therefore, any skills development policy for MSMEs should be supply driven. However, supply-driven skills development policies run into the problem of a mismatch between what education/training organizations provide and what companies want (NCAER Skills Report 2018). Also on the demand side, workers in MSMEs generally need to be versatile.

One solution to overcome this mismatch is to offer vocational training in clusters. Basically, there are three approaches.

Local initiative involves public-private partnerships (PPP). IL&FS had launched a cluster development initiative, working in PPP mode (public-private partnership) with governments on MSME manufacturing clusters. The Tripura Bamboo Mission (TBM) is working to develop a value chain in the bamboo industry in the state, from bamboo plantations (farmers) to the production of bamboo handicrafts (self-help groups, producers, etc.) to really help connect with the market through digital and offline means. TBM meets skills and training needs throughout the value chain.

However, when NCAER surveyed private companies in the bamboo industry in 2016, located in Agartala but outside the TBM, it found that the interaction between MSMEs and local Industrial Training Institutes (ITIs) was rather limited.

The objective of the Model ITI program, launched by the Center in 2014, was to transform some of the government ITIs into model ITIs. The key idea was to improve the interaction between industry and ITI. The ITIs would be established in industrial poles. An industrial partner chairs the management committee of the institute, providing inputs to the course curriculum, improving the skills of teachers and offering internships, apprenticeships and jobs, etc. During a mid-term evaluation of the program in 2018, differences were found in the levels of involvement. industry partners.

German model

Germany has one of the best professional skills models in the world. There are several institutions in Germany working on both the supply and demand side of skills – training workers and upgrading member business organizations so that they can come together on the skills aspect, as well as other aspects. Elements of dual training systems had been introduced by the Ministry of Skills Development and Entrepreneurship in partnership with the German International Cooperation in the automotive, electronics and construction clusters in India.

Under the auspices of the Indo-German Chamber of Commerce, dual vocational training programs have been provided by German automotive companies in Pune since 2015 with a vocational training partner in the city. The course allows trainees to focus on practical skills and applications, to gain workshop experience in their respective training companies and to join the working world immediately after graduation with great career prospects. coming.

Despite the many initiatives, a field visit to Karnal in December 2021 revealed that the clusters had little interaction with ITIs or any other vocational training partners. Maybe big companies hired apprentices, but there was nothing more than that. MSMEs continued to report the lack of skilled workers as a major constraint. Yet the cluster-based vocational training model has not been successfully scaled up. The policy question is: how to improve the interaction and therefore the matching of skills between local industries and vocational training institutes?

The draft MSME 2022 policy emphasizes skills development at the district level and recommends assessing the demand and supply of vocational skills. This should also be done at the industrial cluster level. District Industrial Centers (DICs) can map clusters in their regions and understand their skills needs. It is recommended that the DICs work with industrial clusters, local vocational training partners, in particular ITIs and State services. The idea is to increase interactions between all stakeholders and fill skills gaps.

Interactions between industrial clusters and ITIs may include elements of the ITI model scheme and other examples cited above. It is recommended that DICs play a bridging role between local clusters and state departments in terms of transmitting skills needs in real time. In addition, ITIs may offer short courses for upgrading/retraining, especially in the evenings/weekends. Public and private financing can help meet these challenges.

The match between industry needs and skill providers needs to improve if we are to address employability and employment issues in the context of the Covid-19 pandemic.

The author is a Senior Fellow at NCAER. Views are personal

Published on

June 10, 2022

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