On a recent trip to India, Anant Agarwal, an entrepreneur who has founded several companies including Tilera Corporation which manufactures semiconductors, had an interesting experience. He was thanked by a person at the Bangalore airport for “saving” his life. Narrating this incident during a panel discussion at the Wharton India Economic Forum held earlier this year, Agarwal said that the man was talking about edX, a free online education provider where Agarwal is currently the chief executive. Founded in 2012 by Harvard and MIT, edX, offers courses from universities and institutions around the world.

“EdX has about seven million students all over the world, and about 800,000 students in India alone,” said Agarwal. Unlike conventional universities, he explained, edX provides micro-credentials and programs that have skill-based outcomes, rather than coursework aimed at more theoretical specialties that rarely generate direct job opportunities. Students sign up online for edX courses of their choice, which they take at their own pace. After completing a program, if they want they can also receive a certificate from edX (for a small fee) verifying the student’s mastery of the coursework. This can be used to highlight the students’ skills on their resume or LinkedIn profile.

Huge Skills Gap

But despite the progress made by edX, and the thousands of students that it has qualified for professional positions, India still faces an educational crisis, noted Agarwal. “One of the things I kept hearing in India from companies, people and academics alike is a shocking statistic that 90% of the students who graduate are unemployed,” he said. “There is a huge skills gap between all the people who are graduating versus all those people who are graduating without the skills to get a job.” So the real challenge for India is to ensure that the country’s huge population of 1.25 billion people becomes a demographic dividend, rather than a demographic burden.

Agarwal felt that “there is a big opportunity” to make a major positive impact on India by providing skills for its youth population. “Many of these students can learn online during the period when they are looking for jobs, and they can learn from the best. They can learn digital marketing from Wharton. They can learn software-as-a-service from Berkeley. They can learn Chinese from Tsinghua University in China. All of this is completely free because edX is a non-profit. We see people getting jobs from learning online; that’s where the real opportunity exists.”

“We see people getting jobs from learning online; that’s where the real opportunity exists.” –Anant Agarwal

Amitabh Shah, founder and chief inspiration officer of YUVA (Youth) Unstoppable, a non-governmental organization in India, highlighted the lowering of quality in India’s education sector. “The idea of a Bachelor’s degree is supposed to signify some sort of general excellence; it gives you something that you can take to a job interview to show that you know how to do something. [But], despite the plethora of institutions popping up on every street corner in India, that [old-fashioned] notion of a degree has disappeared. Now you can have someone who comes to you with a Bachelor’s degree in English literature and you’re not even sure that they can speak English.”

Why are standards for so many training programs too low to produce reliably skilled workers? Shah noted that an inordinate amount of the funding involved with conventional university programs is devoted to qualifying students via professional entrance exams. For instance, he pointed out that the total amount of money being spent by students on preparing for the Joint Entrance Examination (JEE) for admission to Indian Institutes of Technology (IITs) is “approximately $2.5 billion” but “the amount of money spent by the Indian government on the budgets of all the IITs combined is [only] one-fourth as much. You have huge numbers of people willing to spend money … to get into a system that is spending less on them than they spent on getting into it.”

Nevertheless, Shah said, “this tells you that the IITs are a pretty stellar group of institutions. The difference between the last student who qualifies to get into an IIT and the next student who did not [get in] is a score of 0.1. So, there is this group of people who are capable and whose difference in talent – based on how much a test can tell you that – is minimal. But their access to content and the sort of education that allows them to fulfill that talent is just non-existent.”

Lack of Soft Skills

The panelists also discussed the importance of less measurable skills – “soft” skills such as confidence, teamwork and leadership, which are essential for students to make the most of the technical skills they learn at the IITs and elsewhere. Shah observed: “This is not just about degrees. It is also about giving people confidence, and giving them the ability to understand and communicate.” These people are willing to spend really significant amounts of money in order to make sure that they differentiate themselves,” not just by virtue of their hard skills but their mastery of the soft skills.

“You have huge numbers of people willing to spend money … to get into a system that is spending less on them than they spent on getting into it.” –Amitabh Shah

Given the growing awareness such challenges, “the demand for good skills is going through the roof,” Shah said: “Many people joke that if you want to start a business in India, start one in education because it is low-risk, which is why they pop up everywhere. But excellence is hard to find. Being able to bring excellence to the table means, by definition, being able to get people jobs. So it is important, as you start to look at India as an opportunity, to recognize that you are not necessarily going to find [skilled] people in the market that you want [to address]. But if you can help create [such qualified people] in the IT industry – and Bangalore has shown that you can [indeed] build world-class capability in India — then [you should] make sure that you train [your] people right. That’s why Infosys has a campus that trains thousands of people at a time; because they can’t find them elsewhere.”

Anand Shah, vice-president of Albright Stonebridge Group’s India and South Asia practice, agreed about the importance of hiring people with soft skills, not just technical expertise.

Before joining Albright Stonebridge, Anand Shah was CEO of Sarvajal, a social enterprise that creates affordable access to safe drinking water for those who live at the base of the economic pyramid. “When I tried to hire people in India, in a number of businesses, I discovered that it is sometimes very easy to find people with hard tech skills; you can find people who can solve the problem if you give it to them. But, anything adjacent to that is a little bit more difficult. The soft skills, which also come from effectively applied civics, are also important skills for making things happen.”

Technology “is the solution that democratizes access to excellence. You are not going to find 600,000 professors who go to every village and teach physics.” –Anand Shah

Anand Shah argued that advanced technology “is the solution that democratizes access to excellence. You are not going to find 600,000 professors who go to every village and teach physics. But you might be able to take the best ones in the world and get them to every village [via computer technology.]” However, maximizing the power of that technology “still requires a set [of skills]. This is where we’ve been lazy at solving that problem. Indira Gandhi National Open University is perhaps the largest university in the world, but it literally sends stacks of paper to every village in India. You have to go and pick up that paper and go to the nearest town and take your exam every couple of months. The problem with that is not the paper itself, but that the paper doesn’t get updated for 15 years and therefore loses its relevance.”

He went on to relate how one of his friends was taking an economics exam at a university, only to discover that the curriculum for this economics course was written 26 years earlier. The reason the curriculum had not changed, he discovered, was that it had not been designed to be continually adaptive. Adaptivity, Anand Shah added, “is where technology allows you to go from yesterday to today – if not to tomorrow – almost immediately. This is an asset in a country that likes to leapfrog – which is one of the favorite words used to describe today’s political and economic predicament. In this space, India can leapfrog quickly – in a wide range of sectors when someone creates a solution.”