ABSTRACT
With the recent growth in market globalization and competition, countries are taking a major interest in developing and maintaining workforces that are highly skilled, educated and healthy. The quality of the workforce of a country in turn affects their labour market outcomes through greater participation in the labour market, increased productivity and higher income. Several countries have recently announced major reforms to their higher education systems including Australia, Finland, Germany, the United Kingdom and the United States. Some of these changes have been in reaction to a perceived need to maintain international competitiveness. Governments are prepared to acknowledge more openly the importance of higher education for the nation’s economic performance, with some seeing higher education as the main engine of economic growth. Globalization and skills development are key words within the context of developed
economies. Implicit in the term globalization is the notion of change for workers in the labour market and the need to have basic foundation skills including literacy (and numeracy), skills to make transitions from one job to the next, and hence the link to skills development. The term is becoming increasingly important in the context of developing countries, including India, with the recent endorsement of its National Skill Development Initiative Policy. Though the emphasis on developed countries has another driver, population ageing, a country like India is in the envious position of having a demographic dividend. Figure 6.1 shows population projections for developed world and developing world for the period 1975-2000 and explains the advantage of a developing world. Figure 6.2 depicts the population pyramid of India based on Census 2001 data. This shows
that India has a much larger population base in the younger age group compared with people in the older age group. The population projection of India for 2026 in Figure 6.3 shows that
India will continue to maintain the demographic dividend. This demands continued investments in early childhood interventions, education and health as well as human capital policy aimed at developing a highly skilled labour force to meet the global labour market demands and challenges – increasing demand for labour with certain types of skills, skills imbalance in demand and supply of labour in certain sectors/industries and demand-supply imbalance of labour in general.
