India’s transition to a knowledge-based economy requires a new generation of educated and skilled people. Its competitive edge will be determined by its people’s ability to create, share, and use knowledge effectively. A knowledge economy requires India to develop workers – knowledge workers and knowledge technologists - who are flexible and analytical and who can be the driving force for innovation and growth.
In a globalized economy, a large pool of skilled workers is indispensable for attracting foreign direct investment. Developing skilled workers enhances the efficiency and flexibility of the labor market; skills bottlenecks are reduced, skilled workers are more easily absorbed into the economy, and their job mobility is improved. It is crucial to invest in quality secondary and tertiary education and in vocational education and training (VET) if India’s economy is to develop and remain competitive in world markets.