Having invested in India for over a decade, in 2019 Acumen concentrated its investment strategy on the areas most impacting Indians’ living wages.
India’s working-age population has skyrocketed to become the country’s largest age group—a trend that will continue for at least the next 30 years. While this boom may seem like an opportunity for nationwide economic growth, the number of jobs has not kept pace: nearly 27 percent of India’s 423 million young people are engaged in neither education nor employment nor training, and nearly half of the country’s population is still living on less than $3.20 per day.
But the solution to rising unemployment and underemployment in India is not just about connecting working-age people to jobs. Tackling this issue requires connecting unemployed young people to good jobs—jobs where they feel safe, valued and can earn a living wage. This revolution in workforce development is not easy: India’s labor laws incentivize employers to hire people as temporary, “informal” laborers rather than as permanent or contracted staff. Being an informal worker presents a difficult work landscape for India’s young people. Informal work means lower wages without benefits such as healthcare, a pension or sick leave, nor protection against arbitrary dismissal or workplace accidents. Without a pathway to stable, reliable and dignified employment, families are left dangling without a safety net: it takes only one unexpected misfortune to plunge them deeper into poverty.
One approach to creating pathways to good jobs is through skill-development programs. Facing few job prospects in rural areas, millions of young Indians are migrating to cities—but without the skills they need to succeed in urban industries. It is a simple, yet daunting reality: to be a productive lifelong worker in today’s economy, you have to also be a lifelong learner. Edubridge, Acumen’s first workforce development investment in India, offers young adults job training to secure entry-level white-collar roles that require technical and interpersonal skills, such as technology or banking services. For nearly 95 percent of Edubridge’s 100,000 students, this is the first time they are engaging in training, for some, the first time in their families. Daughter of a rural dam worker and a housewife, Pragati signed up for Edubridge’s three-month banking and accounting course. She is the first woman she knows to move to the city to look for a job. “It’s scary to be the first,” she said. “But someone has to be the one to move forward.” Without training, Edubridge’s students would be unemployed or limited to working on small family farms or in informal jobs. To date, the company has placed over 70 percent of its students in stable, formal-sector jobs, empowering students like Pragati to break the cycle of poverty.
Creating pathways to opportunity in the formal sector is just one piece of the puzzle. To fully unlock people’s potential and build the workforce of the future, India also requires enterprises addressing the needs of informal workers—over 90 percent of the country’s workforce. Entrepreneur Gayathri Vasudevan is building towards a solution at the helm of LabourNet, a skill-building and job placement program that has already trained over 1 million people working in the informal sector. LabourNet offers over 130 training courses from cosmetology to construction safety as well as support starting a small business. Gayathri believes that improving informal workers’ skills will not only increase their safety and productivity, but also their wages and job security: the more skilled workers are, the less likely their employers are to dismiss them—especially in India where skilled workers are often difficult to find. At LabourNet’s core is Gayathri’s vision to stand up for a largely voiceless group. “The informal sector,” she says, “is often absolutely invisible. They’re nobody’s workers. They’re building buildings for you, they’re cleaning up roads for you, but you don’t see them. So who’s going to invest in them?” Inspired by Gayathri’s leadership, Acumen became LabourNet’s first equity investor. Where many have shied away from the problems of the chaotic informal sector, deeming them unsolvable, Gayathri has courageously envisioned solutions and adapted LabourNet’s business model to meet their needs.
Beyond investing in companies, Acumen also supports leaders addressing the needs of the modern workforce at the systemic level through its Fellows Program. Acumen’s Fellows are not only leading companies creating good jobs for low-income workers but also driving solutions ranging from recruitment platforms to alternative ways of accessing benefits. For example, Fellow Aniket Doegar co-founded Haqdarshak to help informal workers access government benefits such as healthcare and welfare for which they qualify—providing a social safety net to build a more secure life. Over 20 percent of the 2020 cohort of India Fellows is made up of leaders like Aniket, solving problems on behalf of workers and their families.
To help build sustainable solutions for the long-term, in 2019, Acumen also began to unite the fragmented national conversation on workers in India—across social entrepreneurs, nonprofit leaders and heads of government ministries—to amplify our collective impact.
In an era that heralds innovation, it is still human beings that are driving India’s workforce. By investing in companies and leaders championing new solutions, uniting sector leaders to drive the national conversation and more, we believe that Acumen’s multi-pronged workforce development strategy can revolutionize the future of work in India and unlock human potential.
This excerpt on Acumen’s strategy in India comes from our 2019 Annual Report.