By Sahil Aggarwal and Ravinder Pal Singh

The world’s most populous nation with the world’s largest young population has an obvious challenge. How do we gainfully employ so many people? Can college placements be the answer? The job outcomes of education have been low this year with students from top institutes struggling for internships or settling for lower ‘packages’. It is time that we think of higher education as an enabler of entrepreneurship, not just a gateway to placements.

The issue may look like a temporary aberration for this year but it is not. The scenario indicates a systemic challenge that we have to solve—a mismatch between what is available and what is aspired for. The country has been growing steadily, a good sign for economic progress and more people to enter the job market. New job roles and new industries create winners. Top talent is rewarded. Companies recruit the best students from campuses and offer them attractive salaries. To provide the best, the costs of education rise and so do the expectations. This imbalance is what creates fissures in the placements. How do we rebalance? Consider the key parameters for the talent pipeline—demographic change in the Indian population, the number of people coming out of college, and macro shifts in the skill requirements.

First, people who are entering the workplace are not simply filling the gap that those who retire create. Being a young population, we have a larger pool of talent to absorb than what we retire. We have roughly one crore Indians at the age of 62 (a proxy for retirement age) and a whopping double, that is two crore at the age of 22 (a proxy for graduating age). A burgeoning young population feeds growth and in return, gets absorbed in that growing economy, so we are not seeing massive unemployment at this stage. However, we have to create structural ways of improving the quantity and quality of work opportunities. Beyond a tipping point, unemployment is a national risk that can cause fiduciary burdens and unrest in the population.

Second, the gross enrollment ratio (GER) is a little higher than 27% at the moment. This means 27% of people who are in the age group of 18-23 are enrolled in college. GER was 8.1% in 2001, 19.4% in 2010, and 27% in 2020. The trend tells us that we are educating much more youth because the percentage as well as the number of people in that age group has increased. Yet, there is a long way to go. Approximate GER for other countries are 88% in the US, 70% in Germany, and 60% in the UK. The new National Education Policy targets a GER of 50% by 2035. A higher GER means a larger trained workforce, which means many more students to be placed. This doesn’t mean we keep a low GER, but that we create enough opportunities.

Third, within the macro shifts in the nature of work, the most important are the technological changes. The debate is not settled on whether technological advancements, primarily AI and automation, will drastically reduce the number of jobs. In January 2024, Deloitte India nudged its senior partners into retirement seven years earlier than planned, an indication that relevance and not age will be the deciding criterion in the future. Thus, even after getting a job, one has to compete to remain relevant. Analysts believe that while jobs are getting replaced by machines, new jobs will be created, but we doubt how many new jobs will be created, what will be the talent bar in such jobs, and how many of these jobs will be created in India.

A confluence of these three factors paints a concerning picture if we rely on placements. One, the number of people entering the working age group is double that of those leaving it. Two, more of them have completed higher education and thus aspire for a white-collar job role. Three, such jobs may cease to exist. It is time we recognise that the solution lies in actively facilitating the entrepreneurial ecosystem. Higher education plays a key role here. Currently, top-tier institutions are more about selection than education. They simply pick, polish, and place the students. Higher education must become an active enabler of entrepreneurship. Graduating outcomes in the form of startups, family businesses, self-employment, micro-enterprises, and intrapreneurship have to become the norm. Then only a country and young population of our size will survive and thrive. We cannot place the bet on placements.

The authors are co-founders of Rishihood School of Entrepreneurship. Views expressed are personal.