We don’t live in an economy but a society. Societies need and politics is pushed to provide equality of opportunity.
Society responded to the inequality of high-paying manufacturing jobs of the industrial revolution with state-funded universal K-12 schooling.
Society responded to the next wave of wage premiums in service jobs with a massive increase in the number of college graduates—the world has produced more college graduates in the last 80 years than the 800 years before that. India responded to IT (information technology) offshoring by raising engineering college intake capacity from 500,000 to 1.5 million in 10 years.
But automation, longer lives and faster technological change call for another revolution in education. We would like to make the case that the traditional 10+2+3+2 system—two board exams followed by a college degree directly for some and then a master’s degree for some—is past its expiry date and needs complementing with a hybrid model that has flexible delivery (classroom, online and apprenticeships), modularity (full mobility between certificates, diplomas and degrees), and is spread more evenly (lifelong opportunities and reskilling rather than loaded upfront). This shift needs bold changes to the current regulatory regimes in education that have delivered quantity but are inadequate, inappropriate and wrong for today’s battles of quality and employability.
A college degree has long been a lazy filter for employers, prospective in-laws and students. This practice has strong theoretical underpinnings. Michael Spence won the Nobel Prize in economics in 2001 for his work on the signalling value of higher education; how hiring an employee is like a lottery and education can be a useful screening tool. But it is becoming a dangerous filter because 60% of US college undergraduates with fee loans no longer get jobs with wages high enough to repay their loans. Our guesstimate is that this is now true for 30% of India’s engineering graduates. And while the UP government receiving 200,000 applications from graduates for 368 peon positions has more to do with the government wage premium, it’s a testimony to the diminished value of a degree.
Unlike China’s farm to non-farm transition that involved factories, India’s fastest growing formal jobs are in sales, customer care and logistics, paying Rs8,000-20,000 per month. Recent conversations with 1,500 of our customers about their bottom-of-the-pyramid jobs gave us three insights: (a) The college wage premium is now being replaced by the school premium because the most important vocational skills are now reading, writing, arithmetic and soft skills that depend on 12 years of school, (b) there is a clear preference for hands-on experience or apprenticeships rather than freshers, (c) they feel new connectivity between skills and higher education will substantially increase the social signalling of vocational training.
These insights suggest five policy actions: (1) Shift the focus of school education from enrolment to learning outcomes, (2) retain the rigour of testing in our schools but create a focus on soft skills, (3) lift the ban on online higher education by Indian universities so students can learn before migration, (4) enable new connectivity between skills and higher education, (5) catalyse education innovation by separating the roles of policymaker, regulator and service provider.
The first intervention of shifting from school enrolment to learning outcomes is obvious; the right to education (RTE) Act confuses school buildings with building schools. We need amendments to the RTE Act that nuke the hardware obsession and decentralize to states (somewhat like last year’s replacement in the US of the centralizing No Child Left Behind Act with the Every Student Succeeds Act).
The second intervention of broadening of the school curriculum needs Central and state boards to explicitly target soft skills by taking inspiration from the learner profile of the International Baccalaureate curriculum; curious, confident, risk-taker, team player, etc.
The third intervention is lifting the unjust, dysfunctional and arrogant ban on online education by Indian universities. This ban—rooted in the misinterpretation of a Supreme Court judgement prohibiting off-campus physical centres—handicaps Indian universities in building a key capability and gives an unfair advantage to foreign universities that have signed up more than 400,000 Indian students online. It prevents apprenticeships morphing into degree pathways. The fourth intervention requires the ministry of human resource development (MHRD) to acknowledge that norms for small research universities using classroom delivery do not work for larger vocational universities using classrooms, apprenticeships and online delivery. The All India Council for Technical Education (AICTE) is the designated vehicle of MHRD for skills; it should create space for innovating in connecting skills and degrees. The final intervention is the most important. MHRD as a policymaker needs to distance itself from AICTE and the University Grants Commission (whose policymaking function needs to be taken away) and laws that discriminate between government institutions and private institutions (like RTE) must go.
Fixing K-12 education, nuking regulatory cholesterol and massively expanding apprentices will create an education revolution to complement the job formalization revolution that has begun.