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Skills Development for Informal Economy: Issue and emerging approach. Akiko Sakamoto Skills Development Specialist ILO. Why skills in I/E?. Over 90% of employment in unorganized sector Contributes to 60% of GDP Large number of low-skilled people Large number of survivalist MSEs

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Skills development for informal economy issue and emerging approach

Skills Development for Informal Economy:Issue and emerging approach

Akiko Sakamoto

Skills Development Specialist


Why skills in i e
Why skills in I/E?

  • Over 90% of employment in unorganized sector

  • Contributes to 60% of GDP

  • Large number of low-skilled people

  • Large number of survivalist MSEs

  • Skills -a step towards improving working and living conditions

  • Preservation of traditional artisan skills

Diversified profile and needs

Farmers, rural livelihood

Own-account workers, home workers

Casual labour

Child labour


Survivalist enterprises (1-3 workers)

Profitable micro enterprises (0-10)

Vocational training

Business training



Life/soft skills

Literacy, communication

Labour rights, OSH




Placement support

Diversified profile and needs




Demand supply

Over 10 million p.a. entering I/E

Nearly 50% of workforce has below primary schooling

Demand-driven skills

Short-term modular skills training

Life/soft skills

Post training support

Formal training available for 2.6 million p.a.

ITI entry criteria class X, or VIII

12-15,000 NGOs but no data

Largely based on ‘perception’

Public TIs –curriculum preset

SDI/MES scheme (GOI)

Largely provided by PPP, NGOs

Demand & Supply

Skill formation process
Skill formation process

  • Learning from family, community

  • Own practice and experimentation

  • Traditional apprenticeship

  • Unstructured, often incidental, and potentially a long process

  • Out of reach of the formal training system

  • Some learning through sub-contracting with formal sector companies

Emerging features of skills dev for i e
Emerging Features of Skills Dev. for I/E

  • Pre-training

  • Training

  • Post-training

  • Systemic issues

1 pre training
1. Pre-training

  • Knowing demands of skills

    • national or state profiles may be too broad, perhaps need local-area based, or sector-based info.

    • Who should collect the info and fund?

      • VD councils/panchayat/District office?

      • Industry associations/DIC/Sector Councils?

      • Training institutions?

    • community assessment in rural areas

    • Knowing demand is not straight forward --skills not high priority for MSEs

    • Future demand is difficult to assess

1 pre training1
1. Pre-training

Raising demands for skills

  • For enterprises

    • Drivers can be:

      • Technology upgrading

      • New market/diversification of products

      • Sector/cluster/village development plan

      • Stipulation in public contract (Singapore)

      • Training voucher (Kenya)

  • For trainees

    • Motivation is an issue

    • Need to raise self-awareness

2 training
2. Training

  • Short, modular, practical skills training

  • Not only vocational skills, but also business, soft/life skills

  • Flexible hours, locations

  • PPP (training-cum-production, curriculum collaboration, internship, employment link)

  • Recognition of prior learning

3 post training
3. Post-training

  • Post-training support

    i.e. How to integrate skills training with other support services

    • Access to credit, marketing and other available support schemes

    • Business training

    • Hand holding

    • Placement (for wage employment)

4 systemic issues
4. Systemic issues

  • Unclear skills profiling and progression for vocations

  • Required for:

    • Helps to develop training programme

    • Trainees to decide career path

    • Counseling of trainees

    • Incentive to encourage training and upgrading

      • Shows to employers the skills levels, improve wage setting

      • Incentive for trainees to engage in training or pursue higher level qualifications

4 systemic issues1
4. Systemic issues

  • Recruitment/upgrading of trainers

  • Registration, and quality assurance of training providers

  • Identification and up-scaling of successful models

    • Many efforts and experiments

    • Unassessed, some antidotal evidence

    • Need rigorous assessment

      • of impact, of coverage

      • what works, what doesn’t

    • No common criteria to assess ‘success’

How do we reach out the sector
How do we reach out the Sector?

  • Approaches can include:

    • Area-based approach

      • Local govt (DM, Panchayat, VDC etc.) takes a lead in guiding the dev. of the area/community, including provision of LM info./training opportunities

      • Skill training facility at community levels

    • Sector/cluster-based approach

      • Link between organized/unorganized sector through subcontracting

      • Unorganized sector upgraded as part of the overall effort in developing the sector/cluster

      • Sector skill councils/ industry training centre

How do we reach out the sector1





How do we reach out the Sector?

Expansion of

Public TIs/PPP



Local govt.

-rural livelihood


Area-based approach

(DM, panchayat, VDC)