India became an anomaly for economists by exporting more software than Saudi Arabia did oil in 2021. Karnataka played an important part in this delightful anomaly through its 1980s lead in deregulating engineering college education, developing technology skills, and attracting software employers. We make the case for a second revolution in the state’s human capital ecosystem by embracing five design principles in skills embodied by degree apprentices.
It is impossible to predict where jobs will be created in the next 25 years for the same reason most people won’t buy a plane ticket from Bengaluru to Delhi for 2034; many things will change, the relationship between things will change, and an airline silly enough to sell tickets so far in advance will probably be dead. Yet, it’s impossible to attend a policy meeting about skill development without the discussion quickly veering towards commissioning a report to predict where jobs will be created till 2034. But the inability to predict hardly means an inability to prepare. Of course, Karnataka’s trajectory will not defy economic gravity; our road to mass prosperity lies in higher-productivity cities, sectors, firms, and citizens. But enabling degree apprentices — a tripartite contract between an employer, university, and kid — will make Karnataka’s skill system self-healing because these courses embrace five design principles:
Learning while earning: Skills confront a market failure in financing; employers are not willing to pay for training or candidates but pay a premium for trained candidates, candidates are not willing to pay for training but for jobs, and financiers are unwilling to lend unless a job is guaranteed. Training institutions can’t fill their classrooms. Most young Indians can’t pay out-of-pocket to build employability; the income support of learning while earning is crucial to raising enrolment and making employability more inclusive. Degree apprentices attract new money — stipends and degree scholarship payments — from employers because of the high return on investment arising from higher productivity, lower attrition, and faster time to hire.
Learning by Doing: Our skill system has largely been driven by supply — curriculum and faculty — rather than demand. The wage premium in the fastest growing parts of our job market — engineering, sales, customer service, and logistics — are moving from the hard skills of quantity (how much you know) to quality, the soft or life skills that are not taught but caught. The guaranteed workplace and theory immersion of degree apprenticeships ensures kids develop the current, soft, and theoretical skills required because employers are responsible for curating the practical and theoretical curriculum that is integrated with actual doing.
Learning with Flexible Delivery: Skills can be learnt in four classrooms: on-the-job (apprenticeships), online, on-campus, and onsite (faculty coming to workplaces). Each of these has very different price points; one of us paid Rs 18,000 per hour for an American Business School campus degree, while an online degree apprenticeship over five years costs about Rs 20 per hour. Massifying India’s higher education — our goal of 50% GER — requires equal treatment for all four classrooms. Institutions offering degree apprenticeships will deliver employability and inclusiveness by innovatively combining the four classrooms in varying proportions depending on the needs, abilities, and means of different employers and kids.
Learning with Qualification Modularity: In 1934, Gandhiji imagined Nayi Taalim around holistic and experiential education and suggested asking children to choose their subjects early in life was like child marriage. However, the policy apartheid between vocational and degree education grew larger and stronger with the 1948 Radhakrishnan Report, the 1968 Kothari Committee, and the 1986 New Policy on Education. Students couldn’t use a three-month certificate as an opening balance for a one-year diploma, a two-year advanced diploma, or a three-year degree. The National Education Policy of 2020 removes these strong and poisonous partitions between schools, skills, and colleges. Degree apprentices offer academic credit for prior skills, on-the-job learning, and full qualification modularity via multiple on and off-ramps between certificates, diplomas, and degrees.
Learning with Signalling Value: Michael Spence got his Nobel Prize for the signalling value of higher education; his insight was the IIMs and the IITs are good places to be “at” but better places to be “from”. This signalling has exploded supply; the world produced more graduates in the last 40 years than in the 800 years prior. Consequently, degree holders comprise 60 per cent of taxi drivers in Korea, 31 per cent of US large format retail checkout clerks, and 15% of high-end Indian security guards. Traditionally, institutions created signalling value by enforcing tight entry gates (IIM/IIT) or tight exit gates (chartered accountants). But massifying Indian higher education — with equality, excellence, and employability — needs a different balance of entry and exit gates. Degree apprentices have higher capacity than many pure campus degrees because the tripartite contract is a financing, a signalling value, and a delivery innovation.
Most poor countries developed by moving their farm labour to factories so economists didn’t believe a poor country like India, ranked 136th in per capita income, could export software worth billions of dollars. They suggested focusing on the larger export market of physical merchandise ($24 trillion) rather than services ($7 trillion). But Karnataka took the lead in technology skill development, and India is now a world leader in software. However, despite many enlightened employers and willing kids, Karnataka only has 79,000 apprentices (0.2 per cent of Karnataka’s Worker Population). Karnataka could spearhead a second revolution in human capital and break ahead of other states by embracing degree apprentices that are conceptually one-third ITI, one-third employment exchange and one-third college.
Expanding apprenticeships is not a new idea; this was the 20th point in Indira Gandhi’s 20-point programme of 1975. But policy execution since then has been timid, tentative, and shameful. As change in the world of work accelerates, we must be intellectually humble enough to recognise that predicting where jobs will be created in the future has the efficacy of palm reading or astrology. But preparing Karnataka’s youth for jobs is within our power.
(The writers are with TeamLease Services)