Bangalore: Test preparation company Career Launcher India Ltd is set to more than double its network of branches over the next 18 months, investing $25 million (Rs116 crore), says Satya Narayanan R., founder-chairman of Career Launcher.
Not by degree alone: Career Launcher’s Narayanan. The firm’s new centres will offer training in fields such as refrigeration mechanics. Harikrishna Katragadda / Mint
Three-fourths of its existing 225 centres help students prepare for the coveted and premier engineering, medical and management school entrance tests, while the rest offer vocational training. But the firm wants to change that equation.
About 65% of its 250 new centres will be dedicated to vocational training, says Narayanan. These are courses in fields such as carpentry or industrial jobs, mainly for the unemployed and unskilled so that they can find jobs or set up small businesses.
Till some years ago, the onus of offering such training fell on the state, but the government has over the past two years courted private firms to partner it in providing skill-based courses to India’s vast number of poor and jobless.
Career Launcher started offering vocational training in some of its 225 centres 16 months ago. Narayanan says that with the firm’s expansion, he is eyeing a sizeable population of nearly 500 million under the age of 35, of which 90% are unskilled or semi-skilled.
A mere 12% of the country’s 1.1 billion population opts for higher education after school, leaving the rest uninitiated for the job market.
Career Launcher’s new centres, which will offer training in fields such as air-conditioning and refrigeration mechanics and plumbing, will come up over the next 18 months.
It already works with the government on various schemes. Its staff regularly visits centres of the Industrial Training Institutes (ITIs) to train the trainers, add value to the curriculum and upgrade the infrastructure. ITIs are run by the government specifically to provide skill-based courses suitable for industrial jobs.
The government either fully bears or heavily subsidizes such training, which typically costs Rs5,000-12,000 per person, depending on the course.
The Rs110 crore Career Launcher is not alone in eyeing the vocational training segment, which brokerage CLSA Asia-Pacific Markets estimates could be a $1.4 billion market.
Other similar firms, such as the Chennai-based education technology provider Everonn Education Ltd and Manipal Education and Medical Group International India Pvt. Ltd, are also scaling up their vocational training wings.
Manipal City and Skills Training plans to invest Rs200 crore to set up 500 vocational training centres over the next five years on a franchise model.
Still, it’s a challenge to get students to enrol for these courses, says Hari Menon, chief executive of the Rs1,500 crore Manipal Education group’s Manipal City and Skills Training Pvt. Ltd, set up in September. “Vocational training has a stigma...India is a degree-oriented economy,” he says.
The government is estimated to have spent $250 million in 2007 on programmes such as the Swarnjayanti Gram Swarozgar Yojana, which focuses on skills training for the poor, and on public-private partnership for overhauling the 1,396 ITIs across the country, says T.V. Jayaraman, chief executive of Everonn Skill Development Ltd, a subsidiary of the Rs12 crore Everonn Education.
Everonn Skill Development plans to spend at least Rs30 crore to set up 100 branches over the next 18 months to offer skills training in sectors such as nursing, hospitality, retail and fashion technology. “Every company is interested in this space right now. It is a huge market,” he says.
The government’s own budget for vocational training is likely to swell as some of its programmes gain pace. The response to the scheme, started two years ago, has been “fantastic”, says S.J. Amalan, regional director of apprenticeship training, ministry of labour and employment, who oversees the government’s modular employable skills training programme in Andhra Pradesh, Karnataka and Orissa.
Under this scheme, around 550,000 people have been trained, assessed and certified in skills such as engine mechanics, carpentry and plumbing; and about 65% of them have found employment, he says. “The scheme had a target to train one million people in five years but we will reach the target in the next year itself.”
Amalan says he is trying to get the government to raise the R500 crore, five-year budget for the scheme so he can widen its reach. Career Launcher and Everonn Skills Development are partners in the scheme.