inching up over hard skills. But it is clear employers can’t
find people capable of doing the jobs they offer. The intersec-
tion of education and employment is broken.
T
he Indian job market is evolving with four transitions;
farm to non-farm, rural to urban, subsistence self-
employ ment to decent wage employment, and informal
enterprises to formal enterprises. Our binding constraint
has shifted from jobs to wages. Multinational companies no
longer have an unfair advantage over Indian employers and
start-ups with employer brands. While we will never reach
the 45 per cent peak of any country’s labour force in manu-
facturing (Britain in World War II), manufacturing can
go from 11 to 20 per cent, driven by domestic consumption
(Make-in-India might be Make-for-India). But our services
bias will continue and the fastest growing job function in
the next decade will be sales, customer service and logistics
across industries that include healthcare, hospitality, con-
sumer durables and education. India’s development is being
driven by our economic complexity; we make everything
and do everything (even if we don’t always do it well or at
scale). This economic complexity provides a useful habitat,
catalyst and user for our university system.
The purpose of universities
has been debated globally (since
the first ones came up 800 years
ago) and in India (since our first
three came up in 1857) for long but
becomes important because the
world has produced more graduates
in the last 35 years than the 800 years
before that. A useful framework comes
from the great book Building Universities
that Matter by Pankaj Chandra; he suggests
the first purpose of education is to create good
citizens; an educated society usually has higher
rule of law, diversity, tolerance and peace. The
second purpose of education is to prepare the youth for
livelihoods and incomes. The third purpose is to help find
one’s lifelong passion for learning and one’s own meaning
in that life. Universities must reflect on how successful they
have been in the first and third—they are very hard to mea-
sure—but on the second employers are clear that the system
often does not work for them. Many graduates agree because
Michael Spence’s Nobel prize for his work on the social and
economic signalling value of a degree continues to be relevant
despite a college degree not being what it used to be; 60 per
cent of taxi drivers in Korea, 31 per cent of retail check-out
clerks in the US and 15 per cent of high-end security guards
in India now have a degree.
Traditionally, signalling value came from tightly man-
aging entry and exit gates; IITs and IIMs have tight entry
gates and wide-open exit gates and the chartered accoun-
tant exam has wide open entry gates but tight exit gates.
But India’s scale—Kanpur has as many people as Switzer-
land, UP has more people than Brazil, and Maharashtra’s
GDP is more than Pakistan’s—means our current calibra-
tion of entry and exit gates is not giving our employers the
quality, quantity, cost and employability they need. The
base trade-off between quality and quantity is shown by
the differing attitudes of engineering and medical educa-
tion regulators over the last decade; every year, we prod uce
1.3 million engineers and only 45,000 doctors. Not every
engineer is ‘IIT quality’ but everybody who wants to be an
engineer can be one and this massive increase became the
supply chain for India’s IT industry (an oasis of high pro-ESSAY
Illustration by SIDDHANT JUMDE