Building Future-ready Workforce To Bridge The Great Indian Skill Gap
Shreyansh Chandak, Manager, Partnerships and Programs, South & Southeast Asia – Village Capital
Village Capital’s Future of Work India report provides added evidence of the need to further invest in the sector, and support the innovations that help bridge skill gaps, enhance employability, and produce job-ready candidates who can compete with the global workforce.
1) Village capital has recently released the Future of work report. What is the core idea behind this report and how do you plan to realize the vision of preparing India for the future workplace with it?
Shreyansh C: The report is the culmination of our learning from the Future of Work program implemented last year. We received an overwhelming response with over 500 applications from startups across outcome-based learning programs, HR tech solutions, and the ones on a mission to increase productivity, employee engagement, and vocational skills.
The rising need for skill-based education has made the sector popular over the past decade. EdTech became the third most funded sector in India, attracting an investment of $4.7 bn in 2021. Our report was an attempt to bring attention towards the rising skill gap and the need to further boost the EdTech sector. We aim to support the innovations that will help bridge the gaps, enhance employability, and produce job-ready candidates who can compete with the global workforce. This is to fight the most critical roadblock that has hit the Indian job market post COVID.
2) How deeply rooted is the problem of the skill gap in India? How, according to you, can technology help bridge the gap?
Shreyansh C: The unemployment rate in India remains above 7%, and while the government recently pledged to create six million jobs over the next five years, at least 90 million jobs still need to be created by 2030 to accommodate the growing employment-seeking population. India’s growing prowess in the tech space gives hope for the future. We see great potential and promise in technology startups that are reinventing the way in which education is delivered and consumed, making learning methodologies more outcome-oriented, making hiring and onboarding processes more efficient, and designing tools that improve workplace productivity. From being educated to being employable, the roadmap is being created by transformational education technology and edtech startups.
3) How mature do you think the Indian startup system is to accommodate the growing need of creating a skilled pool of workforce and lead the education to build a future-ready workforce?
Shreyansh C: The sector is growing in nature. We have seen a number of new entrants emerging in the space that have attracted huge pools of capital. But in the aftermath of covid, when users/customers have started going back to more traditional learning methods and processes, several of these new-age businesses are struggling.
We expect to see more collaboration within the ecosystem to better support the diverse needs of founders as well as the emergence of a more mature ecosystem with more robust business models that will serve both the offline and online learning ecosystems.
4) VC has already supported 18 startups in future of work. As an entrepreneur support organisation, what did you look at the startups to qualify for the program? What are the areas where opportunities haven’t been tapped yet?
Shreyansh C: We primarily look at 8 different parameters while evaluating a startup – team, problem & vision, product, value proposition, business model, market, scale, and investor exit. Additionally, we consider the impact of the product/service on the end user.
5) What are the major challenges faced by startups in the sector and where do you see the investment trend going?
Shreyansh C: Increasing customer acquisition costs, bringing a high quality / productive team, differentiation in offerings, and long sales cycles for b2b2c businesses are some of the challenges we have seen the businesses struggling with.
Over the last 2 years, we have seen a lot of capital going into early-stage businesses. Over the next 18 months, we expect a lot more consolidation to happen. Growth stage / mature companies will raise capital for acquisitions and that’s where we see an increasing opportunity – in private equity / late-stage investing in the sector. Additionally, early-stage businesses with a strong moat (product/story that sells) will continue to attract and raise capital.
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