India is at a unique position of being able to meet both its internal skills demand while at the same time fulfilling requirements of other countries and growing its economy. How? Much of the developed world has an aging population, while India has one of the youngest populations with about 600 million younger than 25, and nearly 70 percent of its 1.2 billion population less than 40 years old. The fact that a huge part of this population is English speaking just adds on to India’s advantage.

Unfortunately, information from various surveys paint a different reality taking shape:

– A report by PurpleLeap, a joint venture between Pearson and Educomp, states that only 12 per cent of the surveyed undergraduates were employment-ready. While 52 per cent of the students were readily trainable, 36 per cent were not.

– According to the National Employability Report (NER)2011, while India produces more than 500,000 engineers annually, only a miniscule 3.51 per cent are appropriately trained to be directly deployed on demanding projects.

– Another survey by Aspiring Minds found that the top 100 engineering colleges have 2 to 4 times higher employability as compared to rest of the colleges. In a country with 3,393 colleges providing 1.5 million seats, these numbers indicate that a large portion of candidates are simply not viable for immediate hire by employers.

 What happens to the unemployable?

While most students are excited to have an undergraduate degree and start earning, they are most often disappointed. The reality is that they lack the required domain knowledge, work experience, communication skills, managerial skills, and awareness of new technology, which are prerequisites in the current work environments.  After numerous rejections these educated youth turn to menial jobs so as to fend for themselves and repay their educational loans. Some (many?) may never realize their earnings potential from their education.

What does this mean for youth from low-income families?

For many low-income families, their children are often the first generation going to colleges. They are the first ones to attempt to make careers in the formal/organized sector and are the family’s only hope for getting out of poverty. Most families don’t think twice before mortgaging their homes or selling their valuables if it means presumed-good education and secure jobs for their children. What they fail to comprehend is that just any college degree is not the answer to their problem.

Absence of soft skills,  poor English fluency, and lack of tech savviness are just few of the many hurdles the students have to cross before they can become employable. This is understandable considering the background these students come from. The sad part is that most colleges are not equiped with the right resources to close this knowledge gap. All too often, families end up losing everything having to payback their huge loans and have the added burden of an unemployed/underemployed child.

What is being done?

One would hope that with these dismal performance statistics, both private and governement colleges would be working hard to improve in quality so they can produce employment-ready graduates. That will be a slow process. In the meantime, “finishing schools” are one answer to this problem. Some of these schools work to compensate for the deficiencies of low-tier colleges by providing specialized vocational training in technical fields such as computer programming and information technology as well as soft skills like communication. Others attempt to make up for deficiencies in the Indian secondary education system with regards to math and science education and to bring the student up to the level necessary for attending university and gaining admission. RiiT and C-DAC centres are examples of finishing school for engineering graduates. Startups like iStar and Edubridge provide similar services with the goal of helping low-income students get employed in better jobs, thereby increasing their lifetime earnings.

Unitus Ventures is actively investing in innovative startups that provide scalable, profitable solutions to improve employability for low-income students in India. If you are an entrepreneur who has made initial promising progress on a new employability startups, please read more about Getting Funded.