Sunday 23 July 2017

Reach out and thrive

Before we judge people, we must remember that there are many sides to a story and that our evaluation embeds our own biases that make us want to jump to the conclusions that serve our egos best. We generate justifications, often intricately, to be at ease and to gain ascendancy in our conceptualised version our world.  We attach meanings to words and actions of others, without allowing others a chance to be heard or defend themselves. And even if we do we hear, what we want to hear, because we are not really interested in listening. Our compulsion to be right and establish our superior position, is more compelling than to be truly be just and understanding. Just take some time to reflect on this in context of your relationships, especially the troubled ones; and every time, you begin to pass judgement on the other, ask yourself this: Are you really being true to your own self or has your Self fooled you? To share a harmonious and positive relationship with another human being is one of the most enriching and salubrious acts, don’t rob yourselves of it. Reach out and thrive.  

Wednesday 28 June 2017

Jobs Creation 101 - The information imperative

The problem with job creation strategies and discourses is that they start not by fundamentally analysing the principles of job creation, but by already advocating the need for removing growth barriers for existing businesses, making a case for fiscal spending, removing barriers for new business and focusing on innovation. Unfortunately, these are actions that are based on certain principles and when we start from actions and not principles, these can not only be misleading but may not provide us with the full picture, leading to critical omissions and partial perspectives. 
The fundamental pre-condition for meaningful increase in job creation or net new job creation stems from the following:

A demand – supply gap in favour of greater demand and lower supply of goods and services.

Let us deconstruct this statement to uncover all important elements that factor in here. Demand, supply, goods and services, and a gap. Have we covered it all? 

The important thing which we tend to overlook is the information basis of it. The collection and communication of this information. The information of the demand and supply gap is critical for job creation. Without this information creating mechanisms to bridge this gap, ie. create jobs, will be inefficient, perhaps ineffective and counter-productive as well. 

History stands testimonial to the fact that precise information and meaningful use of it has been not only the basis of progress, but also has served to bring respect, accolades and prosperity to societies and individuals. Kings and the erudite, prided themselves on being able to accurately measure time, sizes and distance of celestial objects, or create architecture that required precise measurements to achieve marvelous and often difficult creations. As societies evolved precision systems were being used in manufacturing, astronomy, and for other practical uses. Data systems for socio-economic use have not yet evolved to the extent required, while the technology is there it is the intent and the effort that is missing, and perhaps to some extent the competence to design effective systems, along with devising reliable compliance mechanisms. 

It is no surprise that in recent times, the evolution of data management and analytics is in great focus across the world. Countries that invest in devising systems for precise and meaningful collection, storage, analysis and use of data and information, will be at the vanguard of economically developed and well-functioning societies. In developing countries today, where key national macroeconomic-data itself is being challenged and doubted there is little hope of meaningful and planned progress. 

From a job-creation perspective, to create jobs it is important to:
  1. articulate demand and supply and the resultant gap in quantitative and qualitative terms
  2. tip the scales in favour of greater demand. For that, we can either increase demand or decrease supply. Decreasing supply will logically reduce jobs, therefore the lever we are seeking to use is 'increase demand' and thereby raise supply to meet that demand. 
Yet when we talk about job creation we tend to almost always look at setting up and growing supply institutions more than focusing on generating demand. 

Let’s now look at the demand side, on the demand side we can increase demand by creating aspiration and enabling purchasing power. 

Programs such as employment guarantees, minimum wages, social security, directly and indirectly sustain consumption by enabling purchasing power, apart from the other socio-economic benefits they provide. Another way to increase incomes (purchasing power) is to shift economic and labour activities towards higher value and productivity practices, that enable to command better prices (returns). This may be done by enhancing skills, technology employed, making better choices and working in a supportive eco-system, that is designed for better productivity. This also may result from shift in socio-cultural work practices and attitudes, and increased labour rate participation for collective units. 

An additional way of enhancing income is by reducing over-supply in the economy, something that depresses prices and therefore returns. 

On the other side to enable aspiration, requires us to educate people, enhance their awareness not only of goods and services, but generate a sense of competition and achievement motivation through addressing the issue of self-worth. This is a significantly under-focused aspect of job creation. The socio-cultural basis of this requires us to work differently at this, but much can be achieved through this, as this is a generative method that not only produces the maximum impetus, but also sustains itself. 

Some people confuse greater demand with greater consumerism and high ecological costs. There is an underlying bias that needs to be corrected here, as we are not stating the nature of goods and services that are to be consumed within societies and economy, the value ascribed to these goods and services is by society and it may not be as materialistic and damaging as the bias suggests. Effective Education for example can be a service with low ecological impact and high sustainability, it really needs to be developed in that frame. Similarly, as an example, the value of organic food today is greater in both sustainability terms and economic terms and thereby the increased consumption of organic food may well be a lever for higher future jobs and economic growth.

Now when demand is generated, or existing surplus demand is captured in data, then the supply side wakes to fulfill the demand. It is here that new investments, growth of existing institutions and setting-up of new institutions and mechanisms for meeting that demand take importance. Removing barriers for setting up new business, access to capital for new and existing businesses, laws and levies that make businesses unviable and undermine growth will need to be looked at.  More and more economies and societies are focused on these, and governments are being pressurized to develop laws and business environments where the supply can increase in response to existing demand, even where demand and supply information is not readily and accurately available. One of the reasons why this is so is because companies and businesses are looking for comparative advantages in a global context and currently such entities are able to exercise influence and power in governance mechanisms even unduly. Businesses are competing for the same pie and as long as they can inveigle an advantage that allows them to sustain and grow irrespective of any real need, they are happy. But in order to generate meaningful jobs and capacities, we need to not only work on these, but really focus on getting better information, and work on the levers on the demand side of job creation, that will be the real lever for evolution of jobs, businesses and real progress. 
Click image to enlarge

I will bring forth in this section concepts, strategies and practices pertaining to job creation, a critical theme for development in the contemporary world, especially in light of automation and technological advances that are making certain skills and jobs redundant on one hand, and on the other developing economies and conflict-afflicted contexts pose varied other challenges for creating and sustaining jobs and putting people to meaningful work. 

I hope to have a solution focused discourse that necessitates focusing on fundamentals that will bring a refreshed understanding of context, causal relationships, complexity and consequences. 

Thursday 4 May 2017

Views on Sharda Prasad Committee Report on SSC and TVET reforms

It is evident from the report commissioned by the government, through the Committee that was chaired by Mr. Sharda Prasad, former Director General of Employment and Training, Government of India that the focus and struggle to find solution in the TVET and Skills Development space is still very much on. There seems to be much effort to try and understand the various elements of it and attempt to deconstruct it, to find insights, which is appreciated. While this is important, it is disheartening to see it still being done in a somewhat ad-hoc fashion with counter-productive biases and agendas surfacing therein. Neither do we seem to correctly identify the start point of the discourse and nor are we able to construct an accurate representation of the eco-system, elements, relationships and dependencies therein. So inevitably we latch on to whatever seems an easy end to catch. This is evident through the report that aimed at studying the rationalization of Sector Skills Councils. The committee oversteps its remit and unfortunately aims to say too much about too many things failing to create a coherent and logically flowing discourse, therefore it ends up making sporadic, unfounded, incoherent arguments and recommendations across the report.

The only point it successfully puts across is the conflict of interest that exists within Sector Skills Councils established in the country and to some extent the continuing failures of TVET practice under the new system anchored by National Skills Development Corporation (NSDC), primarily criticizing the short-term training schemes including the SDIS scheme of the government, but fails to provide a meaningful elaboration on causes of the failures. Neither does the report provide coherent guidance on the overall governance structures and framework required for managing TVET in the country, nor does it quite elaborate the principles based on which TVET structures and practices need to be created. There is a hodge-podge of governance ideas which unfortunately, sabotage themselves on further elaboration or the lack thereof.

The report seems to get lost in trying to assert government control over the TVET system and structures, by demonstrating failure of the private sector to lead such efforts, without calling into account the performance of government efforts in the space.  There is no clear articulation of principles and no overall design framework under which TVET and Skills Development need to perform. The easy way out suggested is to concentrate powers under the Ministry, NSDA and a few other government institutions. While criticizing the implementation of the private sector, the committee carefully evades calling into account the government’s own performance in the TVET space. The solution to most challenges as given in the report is to make the government and government institutions implement the solution, whether it is in assessments, content development, research or training of trainers, etc. I think the committee best be reminded that it is the failure of the government structures to deliver, that is the reason for the genesis of the ‘Skills Development and TVET system reform agenda’ and related efforts, to develop complementary and competitive systems that provide evolutionary gains. Just because the new system was poorly designed and implemented, does not automatically make a case for regressing back to the old ways. Also, the reasons for failure are yet to be understood and deliberated upon, and that will throw interesting insights if done, perhaps a deeper elaboration with that focus could have made this report truly worthwhile.

The report in its eagerness to carry forward the agenda of providing a basis for consolidation of power, errs grievously in suggesting that NSDA take care of some implementation responsibilities as well as become the regulator for TVET and Skills Development. The report states, “The Committee, therefore, recommends that NSDA should be designated as National Skills Qualification Authority”. “The Committee feels that this governance structure compromises with the supervisory role of the NSDF and, therefore, the Chairman NSDC should be excluded from NSDF and instead Chairman of NSDA included in it as member.” “The organizational structure, in accordance with the role assigned to NSDA should have four verticals- Qualification Framework, Quality Assurance, LMIS and Research in Skill Development, each to be headed by an additional CEO.”

It is obvious firstly, that there is a serious conflict of interest in the regulator discharging other implementation responsibilities including the ones that ought to be regulated. On the other hand, a regulator must be independent and not under government which is the master of other implementation agencies and is carrying out various responsibilities in this regard. It is this lack of articulation and application of such basic principles, that surfaces at various places in the report, which undermines its applicability.

Given that the committee was given the clear task to rationalize the SSCs the key driver has been to find reasons to downsize them. Apart from overlaps in remit, and inability to perform their job properly, there has been no logical justification for why the SSCs should be downsized, and both those issues can be solved in many ways than just reducing numbers, not that I am making a case for not reducing or reducing the number of SSCs. Conflict of interest, corruption, etc. are governance issues and strong governance frameworks should be brought in to address these instead of just trying to reduce the size of the problem by reducing the number of SSCs. Perhaps there was a need to question the definition of Sectors and the nomenclature of these bodies itself, that in my mind would be more relevant, after all it is something that we have borrowed from other countries, which themselves are grappling with issues of relevance and effectiveness in meeting their objectives. The size of the market served to generate sufficient returns to sustain an SSC does not have to be measured against standard budgets and sizes, different bodies can have different sizes and serve different requirements, perhaps it is lack of understanding on part of those who planned SSCs to know what purpose they are meant to serve and the various mechanisms to add value to their target market segment that allows them to be meaningful and sustainable.

To classify the basis of a sector skills council based on size and number employed alone in that area of work is not enough. It also must be based on several other qualitative factors such as criticality to economic growth and specialization, contextual factors and the requirement of specialized approaches to skills development therein, etc. These factors need greater deliberation. Also, the failure of the committee to prioritise inclusion of every target beneficiary segment in the skills framework as a driving principle versus the justification of SSCs based on size and number of people employed, shows the limited perspective with which the study has been approached.

The committee paints the beneficiary segments using broad classifications of large organized and unorganised sector workers, which fails to capture the complexity of make-up of both beneficiary segments and areas of work. In fact, most of the report is written with such broad generalizations that the report fails to provide any real insightful framework on which to base decisions. The National and International Classification of Occupations is cited as one basis for classifying SSCs, here too there is no articulation of the basis except that. Also, the report states that the Occupational Standards and the unit structure of the Classification should align. Given the ISCO, 2008 is quoted in the report, there is a valid question to be asked for contextual variances if any and how are they to be incorporated, secondly, in a fast-moving, dynamic world, are we to wait on ISCO to change their classification and unit structure to address emerging needs? This is too simplistic a solution to a complex issue.

On merging SSCs, finding the report recommend merging of Gems and Jewellery with Sports, under Gems and Jewellery and Creative Arts, or for that matter Management with Security just highlights the broad brush used to paint this canvas. Yes, to have plumbing and construction as separate SSCs prima facie seems odd and I too have wondered the logic for it, but instead of focusing on the arguments made by the sides party to the decision and deconstructing it, the committee recommends merger by merely castigating the status because of overlaps and low volumes.

For example, SSC for People with Disabilities, there is clearly an integration across sectors and there is need for specialized knowledge, to embed a team within each SSC to address inclusion and support for the purpose is as much justifiable as having a separate SSC or a like body to support all SSCs. The committee takes the easy route of generalizing without providing any real solution to these issues or even addressing this issue for that matter. I wonder why the committee does not think it is important to comment on this. Perhaps it was just easy to knock down Green Jobs rather than SSC for PwD.

All SSCs were created based on business cases, it may have served well to not only dissect the basis presented in the cases and the preparing parties’ intent on serving up these make-believe cases, in case they are not justified. Perhaps questionable data sets quoted in these cases could have been raked up and the data sources could be questioned as well. In fact, I am very interested in knowing if there were conflicts of interests or if consultants were just cashing in by stating what people wanted to hear, even if there was no truth in it. It certainly would seem to have been central and integral to the remit of the committee to evaluate these bases of SSC formation.

The report just states the obvious and the common refrains of issues such as importance of industry engagement, the case for bolstering the apprenticeship act (already underway), developing the Labour Market Information System being the start point of developing the TVET system, etc. In fact, it extracts from a researcher’s model to suggest the various manners in which industry can be engaged. It further, neither provides a framework for evaluation of the model nor does it provide a contextually relevant extrapolation or framework for subsequent action. It merely quotes selective international examples and urges that we follow suit. 

In another case the report asks for a reimbursable industry fund to be created by levying taxes on the corporate sector, stating that government fund should not be spent on essentially an industry agenda except where there is a developmental challenge and under-served segments of society. Someone may first clarify this to the committee that all ‘Government Funds’ are collected from industry and individuals directly or indirectly, the government is of the people, by the people and for the people, much rather than trying to assert and centralize control over the TVET system within the government and put the burden of funding on the private sector, the committee should actually be deconstructing the real problems and evidencing solutions that work and are required for effective implementation of TVET systems which is a horrendous failure even in the government sector. Rather than staking claim on funds and asserting control, the attempt should be to first gain confidence of all stakeholders that the TVET system will yield positive results with the robust plan and demonstrate effectiveness of the plan. The report again talks of bringing assessments within the remit of the National Board for Assessment and Certification, an idea that has yet to be articulated in detail to communicate what will make the Board deliver better results than what Assessment bodies both within private and government sectors have currently yielded, which have been abject failures.

A comment in the report states “NCVT was the only assessment and certification body but now large number of assessing bodies have been floated by the SSCs and NSDC.” Yet the SDIS scheme of the government has over 56 Assessment bodies, and most of them date back to before the Assessment bodies were even empaneled under SSCs. In fact, their ineffectiveness has long been evidenced. There is a larger case for dismantling all assessment bodies until the concept of third party assessments can be developed further and issues therein resolved, but the committee is silent on this.

The Labour Management Information System repeatedly has been quoted by all and sundry to be the start point for any responsive TVET and Skills Development System, yet all the report does is reiterates the need for it and suggests NSDAs inadequacy to develop it for which it should take help of other research institutes and transforming 978 Employment Exchanges as hubs to collect such information. At the same time, it states the important role the SSCs must play in it and that the SSCs should be tasked with development of sectoral LMIS, including based on annual NSSO employment unemployment surveys. The disjointed statements serve to befuddle the reader and clearly communicates that we haven’t given the all-essential start point of TVET and Skills development much more thought, perhaps being too busy focusing on who controls the structure and who pays for it.

The one other thing that I always fail to understand is that how come the most commonly quoted solution to solve TVET and Skills Development problems is to open more TVET training centres when the existing ones are not delivering results and a lot of them are not even working on full capacity. How will opening thousands of new ones or renaming the old ones, as suggested in the report, improve effectiveness of these institutions? Throwing more money at a bad idea, I am not sure how that will turn out something good.

There is a joke, that goes, ‘65% of all statistics are made on the spot’. Much similarly, there is magic wand that throws up recommended percentages and numbers at various points in reports which begs a logical basis. Here are some instances of this in this report:

“The estimates and setting RIC rate can be decided after a thorough estimate of national skill finance needs. A multidisciplinary expert group could be constituted by the Government to work out all details, implementation strategy and drafting of a law on the subject. However, the Committee recommends that the rate should be 2% of payroll bill of the firms.”
“Individual person should also be made to compulsorily pay for training to the extent of about 10 to 20% of cost as anything free is not valued at all.”
“There are 1, 31,287 secondary schools in the country where about 3.7 crore children enrol every year. If we take a pass percentage of 75%, about 2.77 crore children will pass out every year.”
“Another important point is that until 10-20% of the top employers are part of the SSC, it is not going to be effective”.
“The person should also learn two academic subjects so that after two years, he can acquire NCSC and graduate to VETC.”

It is much in this vein that decisions are made on how much should the common norms be and how many hours of training is required, or what should be duration of the courses. Unfortunately, the hard work to be done to establish the appropriateness of these figures or to check their veracity, is beyond the remit of policy makers and governing bodies. 

The report quite craftily, selectively quotes international experiences and seems to suggest we should follow international practices in structuring our skills systems and endeavours, unfortunately other than that there is no real logical plan for addressing skills development issues and to make skills development effective going forward. I think unless we engage true experts, leaders and original thinkers we will continually keep looking to follow others and not only repeat the mistakes they have made, but make some more beyond that as we seek to defy evolution and contextually relevant solutions by focusing to force-fit mindless imports, peddled by those with vested interests and impoverished perspectives. I though appreciate the committee looking outwards across countries to make themselves more aware of the possibilities.  

The Reimbursable Industry Contribution, that seems like the report’s grand idea given the space given to it. This by itself is something of a conception that should worry people and organisations. To impose 2% of payroll bill to be contributed to this fund by all establishments with more than 10 employees. In an over-governed, over-taxed, and over-interfered environment, businesses may now contend with another levy and related complicated filings. Going through the complex implementation concerns, this at first sight itself seems like a bad idea. It not only requires establishing baseline studies of existing training capacities, but also requires the establishments to provide quarterly skills requirements, annual training plans, estimation of increased training capacities, etc. etc. A governance and monitoring nightmare, that will result in not only dissatisfaction, but also tremendous wastages and anyone who has worked in companies or government both know just ‘how meaningful this data is going to be’.

The report also does not highlight any examples of good work or qualitative results of the work of any SSC, it does not provide detailed activities, budgets, time frames, results on SSC activities, limitations and challenges faced by the SSCs, rules and regulations under which the SSCs operated and impact of these. If the remit of the committee was to rationalize the SSCs work then the conditions under which they were made to operate was important to explore, but this area was not at all commented on. The report is scathing as it should be on the failures, but the reason for failure were hardly explored, which makes the report unreliable, ineffective and devoid of real insight.

The report highlights failings in many areas and I think the value of the report is limited to just that. Apart from that the report provides little to go by for constructing the future system for TVET and Skills Development in this country. Looking to be future, the only relevant suggestion that the committee has come up with to project future skill requirements is to have Advance Hi-tech Institute lead the charge for identifying future (new) skills. Again, this shows the limited understanding of the government in encompassing the complexity and plurality of the challenges of skills development especially in this dynamic and rapidly changing world. With the vast scope of this mandate to think that one single legacy institution can carry the burden seems to have worse chances of success than me jumping off the ground in the hope to make it to outer space.  In a world where there is a requirement of decentralizing and having a framework that is spread out and closer to the ground, recommendations of centralizing power and relying on a command and control structure, reeks of 19th century thinking in a 21st century world, which is what this report seems to be, ‘a 19th century piece of work, trying to claim relevance in the 21st century’.

There is so much more to say about the report, but for the moment I shall just state that while there is no intention to criticize the writers of the report, there is a need for much more detailed and comprehensive studies and investigation into each element impacting the TVET system and just getting this elaborate structure in place itself will be one big challenge. I don’t envy the committee members as they truly had an impossible task, given the scope of the study. The government needs to realise the complexity of the issues being dealt with and that this requires more than just ‘an innocent call to ask someone to carry out a study with a scope of this magnitude’. I think the inherent biases are bound to colour the report, the pre-decided mandate, the environment within which the deliberations were done, the background of the members, etc.

It is my humble request to not make knee jerk reactions, since admittedly the committee member believe as do I that each of the recommendations may prompt action with far reaching consequences and I believe not necessarily intended ones.  Let us not mistake motion for progress, while there is no substitute for action there is also no substitute for thoughtful and meticulous planning, especially given the scale and size of potential impact.