The Indian Government has shown resolve over the past 3-4 years to reform the Aerospace and Defence (A&D) sector in India, introducing steps to liberalize the set-up like de-licensing a lot of A&D areas, driving policy to enable ‘Make-in-India’ in principle (Strategic Partnerships, IDDM). However, a lot of first degree issues need to be resolved, namely the need for higher budgetary allocation for capital spend, time bound closure of critical programs, and impending announcement of Strategic Partnerships policy – all of which get discussed at length at various fora.
This situation has led to a fundamental dissonance for aspirants in the A&D sector, and the sector as a whole – why to invest in capability building if the orders seem distant, but then how to position to win orders with / against entrenched players (DPSUs, invested private sector companies) given the lack of real capabilities. The issue is that a lot of players facing this dissonance are still looking at the A&D sector as an ‘opportunistic’ play which, they believe, can be ‘topped-up’ onto their core business – a strategy which seldom sees the light of the day.
In all of this, we seem to have missed an important aspect of A&D value chain – skilled workforce, having adequate exposure and knowledge at each level (workers / technicians, supervisors, middle / top management) from a ‘pitch-win-deliver-sustain-grow’ standpoint. Given that A&D sector capabilities are nascent in India, and most of the work done till now is of basic integration / Tier-2/3 machining, the skills-gap situation is quite grave.
With the growth of civil aviation sector, which is a more mature market, we end up focussing on skill development needs of airlines, airports, civil aircraft design (ER&D) and MRO, which is where the government and the OEMs / T1s have invested time & effort till now. The assumption is that the Aerospace manufacturing capability is relatively adjacent to other manufacturing industries, which may be a case of over-simplification given the entirely different contexts of use. There seems to be a lack of appetite with the entire ecosystem to take up this extremely difficult and strategic challenge of developing skills for the A&D sector, where even 20-25% indigenization may mean creation of about 100k jobs.
In discussion with Aerospace and Aviation Sector Skill Council CEO – D. Peter Immanuel – we are putting forth our articulation of the situation, and possible next steps for the key stakeholders to focus on, in the interest of developing a robust A&D sector in India.
- Realizing that Skill is different from Knowledge: Indian education system is perpetually critiqued for not producing ‘job-ready’ personnel, and our academic set-up is more about knowledge transfer than being industry oriented. Skill is defined as ‘the ability to use knowledge to do something.’ While knowledge transfer is a good first step, our education systems stops just there, creating what is called as “Industry-Academia Gap”. This situation is accentuated due to the fact that A&D sector specific education and training options available in India are not geared up to deliver appropriate commercial / technical courses to prepare talent to get into specialised A&D jobs. Vocational training was majorly government-led until recently, and is quite broad based for people to become fitters, turners etc with no specialized trades like “aircraft composites technicians”, “avionics fitter” etc. on offer. Further, lack of equipment (e.g. higher axis machines) for the personnel to be trained on, adds on to the woes of educational / training establishment. Our existing educational set-up in engineering, MBA and vocational colleges needs to be nudged and enabled to provide skill/ application specific curriculum, which can be opted by regular students and industry sponsored applicants.
- Driving investments and initiating structural changes: The direct investments by the government towards skills development needs a boost through further government-funded projects, or under PPP models. There is a lack of strategy by the emerging private sector to bridge gap regarding trained personnel for various blue / white collar jobs, which means lower efficiency / slower ramp up. There is a need for Industry players to leverage the skill framework and structure that has already been set up through organisations like National Skill Development Corporation (NSDC) and Aerospace & Aviation Sector Skill Council (AASSC). Further Government support is important here to improve the business case for investments in a lumpy sector like A&D, which is just about picking up in India. One simple and structural way of achieving this is to make “Skill Development Clause” as a part of Make-in-India or any large investment proposal. As part of the “Skill Plan”, the proposal will elaborate the number of jobs that will be created, the existing skill gap at the location of investment and the plan bridge the gap. The facility blue-print should contain a Training Centre or Centre of Excellence which not only does ab-initio training, but also carries out upskilling and reskilling programs in a continual manner. However, the training delivery process in such centres may be outsourced to third party Training Partners under the oversight of NSDC/ AASSC.
- Ensuring mind-set of ‘institutionalizing’ capabilities: Given the stage at which India is at in its evolutionary journey, technology partnerships are inherent. Often private companies start with addressing built-to-print opportunities, but fail to ‘institutionalise capabilities’ to absorb core technologies / R&D mechanisms for self-sustenance. Similarly, the DPSUs, a lot of which have been either involved in platform assembly, or are in the process for standardizing manufacturing process for indigenous programs like Tejas to ensure repeatability, are yet to achieve global delivery standards. Skills are required to drive policy initiatives and to become a smarter customer, an aspect that needs awareness of international best practices and a will to transform. All these are mind-set issues that can be resolved only when the A&D sector stakeholders get actively involved in the process and take a more pragmatic view towards holistic capability building, than short-medium term opportunistic approach.
Skill development is closely linked to high productivity, high quality of products and services, & low ‘delivered cost,’ all important aspects to realise any business case as on paper. A&D sector is typically technology and capital intensive, and is characterized by long product life cycles, which creates the need for continual & long term skills development efforts. Creation of skilled manpower in A&D domain takes time & systematic effort which cannot happen overnight. In typical labour intensive sectors, skill initiatives are demand driven. On the contrary, in A&D sector, ensuring availability of skilled manpower requires focussed and broad-based investments.
The industry is attempting to recruit personnel from seemingly adjacent industries like automotive / heavy engineering for technical skills and ex-forces personnel to add the technical and user perspective and to enable business development. Beyond this, companies are developing their in house training programs to bridge the talent gaps. However, this may not be enough.
Growth potential in A&D sector is aided by economic growth, growing military ambitions & spending, and Make-in-India campaign. However, non-availability of skilled manpower is a serious constraint in achieving these ambitious growth targets & projections. Manufacturing / operations have to go hand-in-hand with skill development and creation of world class skill ecosystem in A&D sector will ensure success of Make-in-India campaign, as well as, of the 2 A&D corridors envisaged by the Indian Government.
(Disclaimer: The views expressed in the article above are those of the author Anurag Garg, Heads, Aerospace and Defence strategy consulting, PwC Strategy& (formerly Booz & Co.), India and D. Peter Immanuel, CEO, Aerospace and Aviation Sector Skill Council. The matter of this article has not been edited by skillreporter.com. SkillReporter shall not be responsible for any damage caused to any person/organization directly or indirectly.)