Developing Skills to Alleviate Poverty

This essay is designed as a straight-to-the-point note for all those who wish to explore this specific area, and is a culmination of my experiences. I have kept it based in facts & logic.

Before you start reading, let me share that I am a firm believer in the power of commerce and believe that this century is about reaching out to the bottom of the pyramid by building economic models that are designed to unleash the value therein.

BACKGROUND OF THE PROBLEM

UNDP identifies 5 barriers to poverty reduction at the Bottom of the Pyramid (BOP), and Skill Barriers is one of them. Education and pre-employment training are among the most important and effective means of building skills and combating poverty. The importance of education as a prerequisite to employment that offers a living wage and opportunities for advancement has increased as more routine work has been automated. The best jobs often go to persons with advanced academic and technical skills, as well as an array of adaptive non-cognitive skills. (Al-Atiqi, August, 2014). It goes on to mention that the opportunities lie in adapting business models to address skill gaps, promote these learning opportunities amongst the groups, leverage knowledge about skills gathered through ancillary activities, and develop education infrastructure. (Al-Atiqi, August, 2014)

The BOP proposition views the poor primarily as potential consumers i.e. as untapped purchasing power. Providing increased consumption choices to the poor will increase their welfare, assuming rational consumers. It is almost an “item of faith” among development economists that the poor act rationally (The Economist, 2007) (Karnani, 2009). So, pricing becomes an important element of the whole proposition.

The problem is not just economic. The proficiency of the learners in school system (and in higher education) is a barrier to growth, as well. While they can’t be attributed to poverty status, but the outcome of the conditions at school, whilst improving at a slow pace, is not significantly impacting the economic conditions at the BOP. The higher education system is producing graduates in all streams with most of them not having a clue of what they will end up doing.

The GER[1] (Gross Enrollment Ratio) of ~73% at Std. IX & X, reduces dramatically to 19.8% girls and 22.3% for Std. XI & XII, with the highest drop-out happening after Std. VIII, and the pass percentage in the Std. X & XII Board Exams stand at ~75%. (Mohanty, 2014)

In higher education, out of the 6 lakh engineers that come out annually, only 18.43 percent of them are employable for the software engineer-IT services role, while 3.95% are appropriately trained to be directly deployed on projects. (AspiringMinds, December, 2014). The low employability among engineering graduates is a cumulative outcome of poor education standards and higher demand of skilled employees thereby creating a drastic skill gap in the country. National Employability Report reveals that corporates look for candidates who have their basic skills in order and do not require much training upon being hired. Hence, candidates with lower quality of skills in comparison to basic job requirements are left out in the entire process. (Aggarwal, 2014). With nearly 2 million engineers being churned out every year, not more than 250,000 are ‘employable’.

The percentage of students passing out of Arts, Humanities & Science streams, all combined, stands at 41.35%, and that of Commerce stream stands at 15%, which means that roughly 3 million people who do not pass the under-graduate level are joining the marketplace for jobs.

Overall the data from the National Sample Survey Office (NSSO) shows that 13 out of every 100 Indians between 5-29 years did not attend school or dropped out because they did not consider education “necessary”. This trend is more marked among rural students with 34.8% of drop outs (including those who have never attended school) indifferent to studies. A far lower proportion of urban students—about 22.8%—showed a lack of interest in education. Interestingly, this tendency peters out among older age groups. In the 15-19 years category, only 17 out of every 100 non-attendees called education unnecessary. In the 20-24 years group, it was even lower at 12%. This data reiterates other evidence which shows that as Indians get older, they consider education necessary.

“It is the educational system that is not encouraging people. It is much easier to change jobs than to change schools/ colleges these days with all the formalities needed. And once a child is out of school for too long, admissions become even more difficult,” said Himanshu, assistant professor at Jawaharlal Nehru University, Delhi.

That said, among dropouts and non-attendees overall (5-29 years), the need to supplement household income still remains the prime reason for not pursuing studies. The data from the NSSO mentioned that this was the reason cited by 36% respondents. Another 26.5% said they couldn’t attend school because they had to pursue domestic chores. What’s surprising is that the percentage of non-attendees citing domestic chores as a reason has spiked between 2004-05 and 2011-12.

So, the common thread in school dropouts, graduates of regular streams, and engineers, is that neither of them are ready for any kind of employment, whether wage-employment or self-employment. And even with all the new poverty-alleviation policies & practices that the government has launched, this does not help the economic condition of the families. And when these students are from BoP, the impact multiplies geometrically. This basically means that the bigger challenge is the unavailability of relevant skill-sets to increase one’s family income.

India is expected to be home to a skilled workforce of 500 million by 2022. About 12 million persons are expected to join the workforce every year. This talent pool needs to be adequately skilled. While the school education sector is about 227 million in enrolment, the combined enrolment in higher education and vocational training is about 15.3 million. By limiting to this to the technically and vocationally qualified and skilled workforce, primarily comprising of ITI/ITC (1 million), BE (1.7 million), Polytechnics (0.7 million), we can observe that the current pool of skilled talent is around 3.4 million[2]. (ICRA, 2010)

12 million people joining the fray to get jobs every year, but unfortunately, they do not have the right skill-sets.

Apart from all of the above, in a study done by City & Guilds, over 90 per cent of the workforce agrees that programmes like Skill India will provide the next generation with the right set of skills to support India's growing economy. The emphasis on the need for skill development is not only identified in India but globally as well. Additionally, the same report quotes, 91 per cent Indians feel threatened that their skills will become obsolete in the next five years. (Kaur, 2016)

This problem is the one that needs to be solved. So, while there are a whole lot of companies trying to provide skill-based training to people, the challenge is to connect opportunity to skill-sets; and there are a handful operators who can do this and are able to do this.

THE OFFERING

The basic deliverable of any proposition has to directly impact an individual’s roti-kapda-makaan (food-clothing-shelter) by ways of an improvement in the earning levels of the individual; and that need to be impacted by strengthening our skill development model.

The approach towards skill development must focus on the opportunity first, followed by identification of the resident skill set of the prospective incumbents. This needs to be followed by identifying the right faculty, the right classroom infrastructure and the right on-the-job learning environment for the skill to be developed.

The answer to the problem is not a simple task of creating ‘a’ product. One would need to create a model that presents differentiation in the product offering and the service offering, and for different target groups.

Keeping in mind the basic disposition of learners of the generation from the Base of the Pyramid, the delivery of the learning needs to happen in a physical environment, but technology needs to be integrated in form of online learning and augmented reality to make the learning process even more efficient & effective whilst reducing the time-to-competency, hence reducing the time taken to start earning from the time one decides to make a change in oneself.

For any course to be put up, the two simple questions to which we seek an answer.

a.       Does it lead to an immediate opportunity, whether wage-employment or self-employment?

b.       Will the skill-set be aspirational for the relevant target audience?

The target group of learners for any proposition can be segregated into buckets…

Bucket 1: Drop-outs: Those who have left school after Class X or have not pursued studies after Class XII.

Bucket 2: General Graduates: Those who are about to graduate after 3 or 4 years of post-school education from the fields of Arts, Commerce, Science, Nursing and Pharma Studies

Bucket 3: Engineering Graduates: Those who are studying or about to graduate after 4 years of studies in Engineering from the fields of IT, Electronics, Telecom, Electricals or those who have a desire to work in the digital world.

While the addressable market has been outlined earlier, the larger question is about the learners’ willingness to pay for the value proposition. The skill development industry works in three ways with regards to ‘pay-out’. The Government accounts for most of the sponsorship in the field of skill-development, and then there is Corporate CSR as a source of funds, and finally, there is the student paying for some of the courses.

In line with the rationale of students paying for the course, the following two points need to be noted here.

·       Colleges: Today, in the skill development space, most of the operators are private entities, most of whom do not have infrastructure. What they do is that they go for franchising and that is how they are able to deliver. In yesteryears, most of the skill development was sponsored by the Government, and that happens even today, but the scope for the student-paid model has not been explored much. On the other hand, we have colleges who have been used to student-paid models since their inception. However traditionally, colleges and universities, typically have not been engaging in skill development as they feel that developing skills via a short-term program and without gaining wisdom, one will not be able to do the job. The mismatch is that colleges do not understand that skill development and regular education do not share the same place; and while the former prepares them for a specific trait, the latter prepares them for a wide-ranging set of attributes that students need to have to be successful in life. However, the landscape is changing and colleges need more funds and for this a lot of them are wanting to monetise their excess infrastructural capacity which they have not been using, however, barring a few enterprising ones, none of them have the rest of the things that they require such as faculty, courseware and industry connect. The other advantage that they have apart from infrastructure is that they have captive audience, and this audience, like any other audience, is looking for avenues to secure their feature in terms of meaningful employment; and some would want to opt for wage-employment, some would also want to be self-employed. If the proposition allows that, then they (and their parents) would be willing to pay.

·       Aspirational Courses: Like the Kano Model, undergoing skill development is not aspirational (basic need), what students aspire to is for developing those skills that would help them get the jobs that they want as a career or the ones which pose an immediate opportunity for earning (performance needs). The demand for an aspirational course that can help secure a higher family earning is inversely related to the current economic status of a family; the demand is the highest at the Bottom of the Pyramid. The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers: It is the billions of aspiring poor who are joining the market economy for the first time (Prahlad & Hart).

So, students from the Bottom of the Pyramid, and students otherwise, will be willing to pay only if they see considerable and immediate value in what they are learning in form of an immediate impact.

However, the key driver in this case is that courses provided by existing training providers are affordable if supported with a loan product. In 2011, National Skill Development Corporation (NSDC) had also identified the points of risk and their mitigation solutions (ISB, May, 2011). In the recent times, with the launch of Pradhan Mantri Kaushalya Rinn Yojana (PMKRY) has been launched which makes loans, ranging from Rs. 5,000 to 150,000 available to students with no guarantee.

THE COMPETITION

I talk about competition because for an impact to be made, operators need to find this opportunity feasible. The competition in this field is growing, but is not intense as yet, and with the size of population in India, the efforts made till date are rather insufficient.

In India, about 12 million people join the workforce each year comprising highly skilled (constitute a minuscule part), skilled, semi-skilled and unskilled work force. The last category constitutes the majority of the population entering the workforce. However, the current skill capacity of the country is about four million. Hence, skilling and technical education capacity needs to be enhanced to about 15 million. (E&Y, 2014)

The advantage clearly lies in an operator’s ability to create razor sharp IP, build engaging courseware, develop trainers out of operators (supervisory cadre), profile and then counsel the students accordingly towards the right programs, engage learners digitally, and build their social skills to become successful in this world.

Having said that, there are underlying forces that compel customers to pay for services and these trends make markets develop and grow. The market drivers for skill-development initiatives are

·       Customer’s aspiration drives the demand for courses that lead to an increase in household income or build one’s sustenance and this is possible by linking learning to jobs or immediate opportunities for self-employment opportunities

·       Government policies around sponsorship of skill-development programs is another key market driver.

o   Pradhan Mantri Kushalya Vikas Yojana (PMKVY) from Min. of Skill Development & Entrepreneurship and Deen Dayal Upadhyay Grameen Kaushalya Yojana (DDU-GKY) from Min. of Rural Development and some 20 0ther schemes from various ministries of the Government have led the way in building momentum in the ‘Skill India’ initiative.

In its Twelfth Five Year Plan, India has set a tough challenge in the field of vocational education and training in its approach paper. It aims to increase the percentage of workforce with formal skills to 25% at the end of the plan. It is estimated that 50–70 million jobs will be created in India over the next five years and about 75%–90% of these additional employment avenues will require some vocational training. (E&Y, 2014)

I hope this note is of help to all those who wish to make a foray into the world of skill development or wish to understand the landscape in depths.

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[1] Gross Enrolment Ratio (GER) is the total student enrolment in a given level of education, regardless of age expressed as percentage of the corresponding eligible official age group population in a given school year.

[2] This does not include other streams such as other forms of higher education and research and is limited to those who can fit in as workers, supervisors, entry to mid level managers in large portions of the manufacturing and service sector, either organised or unorganised.

Making People, Organisations & Communities Successful

India has seen a rapid growth in the last few years. This growth cannot be called inclusive as it has not been able to bring about development at the grassroot levels. It is important that any economy developmental activity in today's world takes into account emergent issues, especially to do with the underserved population at all levels, i.e., individual, organisation and community.

This write-up aims at giving a peek into my understanding of the same.


Individual Level

There is a lot of traction on the individual level with a lot of focus by Min. of Rural Development and special agencies like National Skill Development Corporation (NSDC) coming into the forefront, and adding gusto to the existing set of efforts being made by various Not-For-Profit organisations to help the socio-economic fabric in the underserved areas of the country.


NSDC (http://www.nsdcindia.org/): excerpt

The National Skill Development Corporation India (NSDC) is a one of its kind, Public Private Partnership in India. It aims to promote skill development by catalyzing creation of large, quality, for-profit vocational institutions. It provides viability gap funding to build scalable, for-profit vocational training initiatives. Its mandate is also to enable support systems such as quality assurance, information systems and train the trainer academies either directly or through partnerships.

 

The NSDC was set up as part of a national skill development mission to fulfill the growing need in India for skilled manpower across sectors and narrow the existing gap between the demand and supply of skills.

The Finance Minister of India announced the formation of the National Skill Development Corporation (NSDC) in his Budget Speech (2008-09):

 

"...There is a compelling need to launch a world class skill development programme in Mission mode that will address the challenge of imparting the skills required by a growing economy. Both the structure and the leadership of the Mission must be such that the programme can be scaled up quickly to cover the whole country."

 

Its objective is to contribute significantly (about 30 per cent) to the overall target of skilling / upskilling 500 million people in India by 2022, mainly by fostering private sector initiatives in skill development programmes and providing viability gap funding.

NSDC is also working very aggressively on setting skill-standards in India and am sure are researching and contacting skill-standard bodies in other countries as well. Setting skill-standards and then working towards a metricised approach to building competencies is the way forward. Do look at the skill-gap analysis available with them. Other apex bodies have established active workgroups to build a focus on skill-building (www.cii-skillsdevelopment.in/ and http://www.ficciskillforum.org/) and help establish Sector Skills Council (SSC) like the ones established in developed economies, like UK (http://www.sscalliance.org/)

There are a lot of organisations & individuals who are now preparing themselves or have already got into the fray of skill-building at the grassroot level, and that is commendable. In fact there is a clear business opportunity in this area and those who have the understanding of skill development and have the will to move out of their environmentally controlled cubicles, would see the scope. Organisations like Work Skills India (a Bharti venture), NIS Sparta (a part of Reliance Telecom), and IndiaCan (a JV between Pearson & Educomp) have already gotten themselves in this space, and like many other individuals & organisations are striving to help the country achieve their target. International agencies from all over the world are making their pitch to get into this next big wave of 'creating employable individuals'.


Organisation Level

The next level is that of helping organisations build at the small enterprise level and this is one area in which a lot of work has happened, and there are a plethora of organisations who are helping these organisations to establish themselves. The Indian government has a special ministry called the Min. of Micro, Small & Medium Enterprises (MSME) to aid the effort. Policy makers view MSME sector, which is the second largest employer after agriculture, as a critical vehicle for creating jobs and eradicating poverty. Accordingly, many MSME public support programmes have been in vogue in India for a long time. Such programmes have met with varying degree of success. Lately, to enhance outreach and efficacy of such programmes further, public schemes increasingly focus on MSME associations for tasks ranging from enhancing awareness to implementation to creation of support institutions in Public-Private-Partnerships (PPP). The issue of capabilities of MSME associations in design and execution of such schemes, has assumed critical importance.

Banks & Lending Institutions are also working on helping these organisations grow. Infact the Reserve Bank of India has announced the availability of loans upto INR 500,000 without any collateral guarantee (http://www.fisme.org.in/RBICircular.pdf). There is also Small Industries Development Bank of India (SIDBI) which is actively working with to empower MSME sector with a view to contributing to the process of economic growth, employment generation and balanced regional development.

SIDBI Foundation for Micro Credit (SFMC) was launched by the Bank in January 1999 for channelising funds to the poor in line with the success of pilot phase of Micro Credit Scheme. SFMC's mission is to create a national network of strong, viable and sustainable Micro Finance Institutions (MFIs) from the informal and formal financial sector to provide micro finance services to the poor, especially women.

SFMC is the apex wholesaler for micro finance in India providing a complete range of financial and non-financial services such as loan funds, grant support, equity and institution building support to the retailing Micro Finance Institutions (MFIs) including two-tier MFIs so as to facilitate their development into financially sustainable entities, besides developing a network of service providers for the sector. SFMC is also playing significant role in advocating appropriate policies and regulations and to act as a platform for exchange of information across the sector. The launch of SFMC by SIDBI has been with a clear focus and strategy to make it as the main purveyor of micro finance in the country. Operations of SFMC in the coming years, are not only expected to contribute significantly towards development of a more formal, extensive and effective micro finance sector serving the poor in India, but also ensure sustainability at all levels viz. at the apex level (SFMC), at the MFI level and at the client level to ensure continuance of such arrangement. Most importantly, SFMC has strived to create a mechanism in which there should be no barriers to growth. Under the dispensation, there is focus on innovation and action research.

The Federation of Indian Micro and Small and Medium Enterprises (http://www.fisme.org.in/) has been working to integrate the efforts. After opening up of Indian economy, close to the heels of establishment of WTO, eight state-level SME associations gave birth to FISME in 1995 to gear up the Indian SMEs at the national level to the challenges thrown open by changed economic realities. Today as umbrella organization of SMEs, FISME has associated associations in all the progressive states of the country.

A program called 'Capable' is being launched with the larger overall goal of improvement in MSME associations' awareness capacity and capability to facilitate MSME competitiveness enhancement. The objectives of the program are two-fold:

• Capability Development of MSME associations to improve their a) efficacy & sustainability, and b) Implementation capability of MSME development programs and schemes.

• Facilitating better designing, management and effective implementation of various Government sponsored schemes intended for MSMEs and associations.

 

Lately the entrance of the concept of Social Enterprise has also seen a lot of work. There are a multitude of people wanting to fund these. While venture capital an private equity funds have been helping start-ups build the foundation of some great ideas, there is now a new breed of organisations that are focused on building the social enterprise structure in the country. PE Funds like Acumen Fund are in the constant search for ideas that are exciting, and those which could be seeded to build as successful organisations.

Community Level
An economic community as I see it are of two types, basis their composition, however, emerging from the same concept of 'organisation':

1. Community of Small Enterprises
2. Community of Micro Enterprises

I have intentionally kept Medium Enterpises as they may possibly have the ability to handle themselves in terms of their growth in the perpsective that I am about to share. The challenge with most organisations in this sector are two folds:

1. Unavailability of managerial competence
2. Unavailability of reckonable brand

My thought around both are that there is considerable business opportunity around the two.

• Managerial Competence

The right competence is something that I would like to see beforehand in case I want to invest in an organisation (running/start-up), as I want to be sure that the monies would be used properly and that I should have a decent return on equity. Having said that, the lag is the unavailibility of managerial competence in these organisations that take loans to build and/or run. Financial institutions should look a the way in which their funds are being put to use. One could be content that the money being given is a 'loan', so, how does it matter whether the managerial competence is available or not till such time the money is returned along with interest and that the proposition doesn't become a NPA. Here is the difference.

A usual lending agency would have this philosophy, however, lending organisations who are in the business of lending to high risk enterprises of considerably small size should be in a position to offer services which would help build the managerial competence, as this would aid in assuring assured and timely return on the money lent.

Can private agencies look at this as a business opportunity where SMSEs are trained and coached on increasing their own effectiveness as managers hence bolstering the chances of increased efficiency of their organisation. This will not only ensure that the return on investment is secured, but an efficient organisation would ensure that it takes more lending as the 'efficient & effective' organisation now starts to grow. The growth will also ensure better payout to workers and hence increasing consumption... and that's how the cycle moves on an upward spiral. This model could be adopted by lending agencies or they could get into a partnership with organisations which can build such competencies.

• Reckonable Brand

I visited some villages and what came out strongly is that there are three specific activities that happen in a village. And one need not be an economist to understand the same; production, consumption and sale of excesses. The interesting component is 'sale of excesses'. The excesses are sold in nearby towns (accumulation centres) and from there it goes to distribution centres from where it comes to your and my house. The inefficiencies in this system is not something unknown to anyone.

However, in this environment we have the example of successful cooperatives such as Amul which went ahead and collected milk from everywhere and packaged it and retailed it. The model was so successful that it was replicated by some private enterprises too.

The business opportunity lurking in mind takes off from here. Let's look at an average MSME industrial belt. There are hundreds who manufacture various goods and they are sold across to those who need it which essentially are larger organisations or in larger markets. Let's take the case of the products that are designated to be sold to the market. The inefficiencies of marketing, branding and quality hound them; with every manufacturer having their own benchmark. On the other hand, one could look at a scenario where all the products are pooled together by a cooperative society for the cluster, quality checked against decided norms, and then packaged with a common brand.

For example, if I pick up all the goods produced in the industrial area at Kalyani (70kms from Kolkata) and brand all of the goods with 'Kalyani' as the brand. The cooperative that does it, is owned and funded by partnering manufacturers, but run by professionals. The benefits are that the brand establishes itself as a mark of certain level of quality, uses the 'pooled' funds to mobilise markets and uses economies of scale in distribution system; and hence becoming an efficient system and returning more value to the manufacturers. The manufacturers get to retain their identity and continue to sell to their existing customers as well. As we move on the cooperative could actually revive the organisations that have perished (bankrupt) by sensing the need of the market and getting the same produced. Everyone is a shareholder, so everyone benefits.

The same could work in the micro-industrial sector in another form. Let's say, a similar cooperative is created by a tribal village, and all of their excess produce and handicrafts could be branded by the name of their village and retailed to larger stores in big cities or fed to the same people who were earlier purchasing from individuals. Everyone is a shareholder, so everyone benefits.

This is an idea that I have been toiling with for sometime, and I spoke to a few stakeholders and prospective end users, but they have shown a mixed response towards it. The apprehension lies into venturing in the unknown and someone as the good shephard who takes the onus.

I urge all in the learning and development space to pay attention; the time has come to focus on things that will help the country grow and make it a superpower, and it is in your hands.

Please feel free to comment on this article. The pursuit is to become better.

Factors Influencing Purchase Choices Among Urban Youth

An article in The Economic Times (http://bit.ly/bWICOw), once featured an interesting article on the purchase choices made by the youth around us. Through this blog I have made an attempt to look at the factors from the perspective of Financial Services Sector and especially from the perspective of 'financial literacy' as an idea that my organisation and other conscientous organizations in the BFSI sector want (request) the youth in the 18-22 years bracket to embrace.

Hereon, instead of calling 'financial literacy' an idea, I shall refer to it as a social product.

The seeding of financial literacy needs to happen at an even younger age, but its never late to start. This kind of an education drive has never taken centre-stage, and today Apex bodies such as SEBI (Securities & Exchange Board of India) alongwith other market participants are drafting concrete plans and implementing the same to ensure that we are able to build a rich and vibrant economy, of which today's youth is a non-negotiable part. This is especially important also because the Government has gone on a political-party-independent drive to add 500m skilled job in the country by 2022 (www.nsdcindia.org), and also on a drive to improve the governance system in the smallest administrative cell in India, 'the panchayat'. For both of these drives, the Government has chosen the PPP (Public Private Partnership) route to ensure scalability, economies of scale, process efficiency and measureable productivity.

With these two in place, it doesn not take a rocket-scientist to expect a lot of money getting generated and getting consumed. Keeping all of this in mind if the concept of 'financial literacy' is not seeded well, then we would have a situation where money is possibly being saved, and but not getting invested at the right avenues, hence building the foundation of a catastrophe in the long-term. Considering an imminent of urbanisation of population (doesn't mean that all of the population needs to move to metros, but what matters is the thought process).

Well, to conduct this study a unique network of 'student transmitters' across campuses was used; these act as insight seekers & conversation seeders. The network reached 6 metro cities and connects with over 10000 students. The sample size makes the study worth reckoning.

The study talks of 7 factors that influence purchase choices among urban youth...

1. Talk Value
2. Utility
3. Substance
4. Conversations
5. Social Relevance
6. Engagement
7. Present at Point of Need


TALK VALUE  

The product does not need to be the centre of attention but should be able to place the young buyer in a position of exclusive attention during conversations. For instance, a growing number of iPhone users are beginning to purchase unique applications, despite the availabilty of many free ones.

My take basis my observations & interactions with the youth has been that if we are able to place our social product amongst the youth in form of a 'knowledge piece' that arouses contextual interest, and one that can be put into use, it will drive the youth to understand more of it. And once the benefits are seen, people would like to flaunt the knowledge building interest amongst others. The same thing happened in its own way for IT, and the Urban India saw a sudden increase in the use of computers amongst the youth in 1995-1997.


UTILITY

Budgetary constraints mean that the products and features must have longterm utility, particularly when it comes to high-end purchases.

My take on this is that 'high-end' has a flexible definition whic is directly proportional to my ability to take risks with my disposable income. So, a 'high-end' purchase for me will not / may not be so for someone earning more than me, like my boss. So, if its all about the risks that we can take with our disposable income, we need to ensure that we have a low-entry barrier for the products that the youth can chose from once they become literate. The next thing comes in is long-term utility which is all about products designed to meet specific future needs; need-based maturity and not purely value-based maturity kind of products.


SUBSTANCE

Yes, enticing packaging is no longer enough. Youngsters today have evolved and place a higher currency on the content. It might not glitter, but it better be gold!

The way I look at it, products need to be simple. Infact, a senior colleague was mentioning yesterday that we need to innovate to keep things simple, and that the masses aren't quite ready for exotic financial products; what was meant that financial products have to match the maturity of the buyers en-masse; and its not about whose-products-are-more-exotic.


CONVERSATIONS

At the point of sale, the youth make a choice easily if prior conversations about the brand have taken place within their friends/peer group. These discussions serve as easy references. For instance, laptop purchase decisions are also influenced by conversations in peer groups.

My point is that organisations should now look at making communications to their target segment interesting (and one doesn't have to einstein to know that), but the needs of the youth in terms of communication are pretty different, and the conventional wisdom around it will not work. So, are we using new media types such as facebook & twitter to update information, or are we looking at ways of engaging the youth.


SOCIAL RELEVANCE

A small but significant trend which is emerging. Students prefer buying products that have a positive impact on society. For instance, young people have started influencing their parents to only purchase ecofriendly home electronics, even though they maybe more expensive.

This is great, because if this is a component of purchase decisions, then we need to focus on various activities that not only deliver social value, but also projects them properly. Basically, what I understand is that making money is not bad, but everyone wants to see as to how much as we seeding back into the masses. So, this is not about socialism in its archaic context, but about how 'social' and 'capitalist' work hand-in-hand in the society... neo-capitalism.


ENGAGEMENT

Given the high level of clutter, young people's choices tend to tilt towards brands that engage them in a sustained manner. The target group also responds more positively on activations. For instance, games/events in college festivals where the product is strategically embedded in their environment stand a better chance of achieving higher brand recall.

So, its not just about one-on-one conversations, but also about whether there is someone talking about us, when we aren't there; are we able to engage our customers, and its beyond the online media.


PRESENCE AT POINT OF NEED

The target group feels more connected and evinces loyalty to brands that are available when they need it. So the propensity to choose the same brand the next time is higher. For example, a new sanitary pad brand was available in dispensaries inside colleges, which created a brand connect with the female target group.

The question is how accessible are we, and that's not an easy one to work around. But, why forget the way telecom companies simplified their product and made it available with every mom-n-pop store, junk store etc. Innovate to remain simple.