Building the nation’s human capital

Ashish Dhawan, Livemint on December 1, 2014

India is one of the fastest growing economies in the world, but the low quality of education in our schools threatens our dreams of global excellence. Far too many of our students complete school without the knowledge and skills that they need to find employment, while talent shortages limit corporate growth. Indeed, one of every three school graduates in India, upto the age of 29, is unemployed.

Companies clearly have a strong incentive to invest in improving education quality. The Companies Act, 2013, which mandates qualifying companies to earmark 2% of their annual average profits for corporate social responsibility (CSR) activities, presents an important opportunity for corporate action.

Typically, companies focus their philanthropic efforts in education on building infrastructure. As part of the Swachh Bharat Abhiyan, for example, firms have recently committed to building separate girls’ toilets in all government schools. While this initiative is critical for ensuring higher attendance and retention of girls in schools, we must complement it with interventions that drive quality changes. This is how we will ensure that girls’ attendance in school ultimately enables them to realize their potential.

As business leaders, we instinctively realize that the success of any enterprise is largely determined by its human capital, and not just its infrastructure. This is why we have a natural inclination to contribute to developing a skilled workforce. And, just as our employees drive our company’s outcomes, our education system’s human capital (teachers and school leaders) drives our students’ learning outcomes. This recognition should inform how we invest.

Research tells us that 25% of a school’s impact on student achievement is dependent on one person—the school principal. This confirms what we know as business people—leaders play a critical role in building great institutions. Companies can invest in programmes aimed at developing great school leaders, and can also draw on their own knowledge of leadership training to contribute to curriculum.

Another area where firms can apply their skills in human capital development is teacher training. Several organizations are working with government school teachers to equip them with skills that will prepare them for effective classroom delivery. Public-private partnerships can also help demonstrate high quality schooling and introduce innovation in the government school system.

There are several other promising areas for CSR such as early childhood education, vocational education in secondary schools and social integration in classrooms under the Right to Education Act.

However, to ensure impact in any of these areas, we need to strengthen our education system’s human capital. Without trained teachers and motivated principals, we will not be able to ensure that our children are actually learning.

A collective recognition of some of these critical issues will have a multiplier effect and ensure maximum impact. As firms invest in human capital they should look to support innovative programmes with potential for scale, which can also serve as models for policy reform.

The development of the information technology (IT) industry provides a model for corporate investment in education. Nearly two decades ago, our IT industry recognized the urgent need to invest in its human capital, and today, Indian IT companies are among the world’s largest IT services employers.

Improving the quality of our education will benefit all companies and industries alike by contributing to a better talent pool for our economy. The quality of our education system cannot exceed the quality of our teachers and school leaders, and the success of our companies cannot exceed the talent of our workforce.

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