Building a Future-Ready Workforce to Address India’s Great Skills Gap
Village Capital’s Future of Work India report provides further evidence of the need to invest more in the sector and support innovations that help close skills gaps, improve employability and produce ready candidates jobs that can compete with the global workforce.
1) The village capital recently released the report on the future of work. What is the central idea behind this report and how do you intend to realize the vision of preparing India for the future workplace with it?
Shreyansh C: The report is the culmination of our lessons learned 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 technology solutions, and those with a mission to increase productivity, employee engagement, and job skills .
The growing need for skill-based education has made the sector popular over the past decade. EdTech has become the third most funded sector in India, attracting an investment of $4.7 billion in 2021. Our report was an attempt to draw attention to the growing skills gap and the need to further boost the sector EdTech. Our goal is to support innovations that will help close the gaps, improve employability and produce job-ready candidates who can compete with the global workforce. This is to tackle the most critical roadblock to hit the Indian labor market post COVID.
2) How deeply rooted is the skills gap problem in India? How do you think technology can help bridge the gap?
Shreyansh C: India’s unemployment rate 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 population seeking employment. . India’s growing prowess in technology gives hope for the future. We see great potential and promise in tech startups that are reinventing the way education is delivered and consumed, making learning methodologies more results-oriented, making hiring and onboarding processes more efficient and designing tools that improve productivity in the workplace. From education to employability, the roadmap is created by transformational education technology and edtech startups.
3) How mature do you think India’s startup system is to meet the growing need to create a pool of skilled labor and spearhead education to create a future-ready workforce ?
Shreyansh C: The industry is growing. We have seen a number of new entrants emerge in the space which have attracted huge pools of capital. But in the wake of covid, when users/customers have started to revert to more traditional ways and processes of learning, many of these new era businesses are struggling.
We expect to see more collaboration within the ecosystem to better serve 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 ecosystems of offline and online learning.
4) VC has already supported 18 startups in the future of work. As an entrepreneur support organization, what startups did you look at to qualify for the program? What are the areas where the opportunities have not yet been exploited?
Shreyansh C: We mainly look at 8 different parameters when evaluating a startup – team, problem and vision, product, value proposition, business model, market, scale and investor exit. In addition, we take into account the impact of the product/service on the end user.
5) What are the main challenges facing startups in the sector and where do you see the investment trend?
Shreyansh C: Rising customer acquisition costs, building a high quality/productive team, offering differentiation and long sales cycles for b2b2c businesses are some of the challenges we face. have seen companies struggle.
Over the past 2 years we have seen a lot of capital flowing into early stage companies. Over the next 18 months, we expect much more consolidation to occur. Growth-stage/mature companies will raise capital for acquisitions and this is where we see a growing opportunity – in late-stage private equity/investing in the sector. Additionally, start-ups with a strong moat (product/story that sells) will continue to attract and raise capital.