Degrees vs skills: Redefining education and jobs for the AI economy

Degrees vs skills: Redefining education and jobs for the AI economy Premium

India's workforce surge demands integrative education reform that blends rigorous degrees with agile skill credentials. Balancing global trends and local data, the article advocates hybrid models enabling sustainable growth and equitable opportunity.

You hear this kind of conversation at practically every Indian higher education conference or lecture. Reformers (including individuals who intend well) say that the university-based education system, which has been around for 150 years, is dated. Every career or role nowadays needs more hard and soft skills than what universities teach, which is mostly about facts and figures.

In a world where artificial intelligence (A.I.) is used to do any task that requires knowledge, this is especially true. The counterargument regarding the social learning and permanent human values fostered by a university education appears to be overwhelmed by the noise. This division about the future of education is increasingly asking a very important question: will skill-based learning and stackable certificates take the place of traditional university degrees?

We need to break down this debate. Right away. Urgently.

Economists believe that about 17 crore new jobs are expected to be produced in the next six years. The country's young workforce wants to fit into a global economy that is changing quickly. Employers all across the world are showing that they want more skills, especially in new industries like artificial intelligence (AI) and green professions.

However, degrees still have a lot of social, cognitive, and economic value. India's task is to find a way that takes use of the best of both worlds, while also being based on data, being open to everyone, and taking into account the country's particular situation.

Researchers in schools all over the world are noticing and writing about the big change in how people get hired. From 2018 to 2024, studies looked at over a million job listings in the UK and found that degree requirements dropped by 23% for AI-related jobs. But the extra pay for having the right abilities went up by 16%, which is close to the 17% extra pay that is commonly linked to having a doctorate.

In new fields like renewable energy, degree requirements are still strong, which shows how different sectors work. This changing landscape shows that hiring is changing, with a focus on abilities that can be shown to be useful in a world where technology is always changing. However, the continued existence of economic premiums and social capital linked to degrees indicates that a complete rejection of conventional academic qualifications fails to recognize the nuances of lab or market signalling.

India's experience reflects and complicates the global context. According to the Ministry of Statistics and Programme Implementation's Periodic Labour Force Survey (PLFS) report for August 2025, India's labour force participation rate (LFPR) for people 15 and older went up from 49.8% in 2017-18 to 60.1% in 2023-24. The Worker Population Ratio (WPR) also went up, from 46.8% to 58.2%.

In August 2025, the unemployment rate was only 5.1%, the lowest it had ever been. This means that job creation and absorption are getting better, even while economic development is slowing down. Forecasts say that the Indian job market will rise by 4.4% in the second half of 2025. This means that the job market will be good but not too good.

However, finding a job after graduation is still a big problem. The India Skills Report 2025 says that just 54.8% of Indian graduates can get jobs around the world. This number varies a lot by field, with management (78%), engineering (71.5%), and sciences (58%) being the most employable.

The Mercer-Mettl Graduate Skill Index 2025 tells a different story: only 42.6% of Indian graduates are employable, and only 8.25% of them are working in jobs that fully match their skills. Most of them are either underemployed or in jobs that require less skill than their education suggests. This shows a big gap between the skills people have and the tasks they can do. So a lot of grads aren't equipped to work for a modern organization, and the needs of the industry are always changing.

Because of this, India's higher education authorities are aggressively pushing for skill-based training to be a part of higher education. The University Grants Commission (UGC) has put forth detailed rules that support skill-based courses and micro-credentials that are in line with the National Education Policy (NEP) 2020. This policy focuses on getting people ready for work and learning through experience.

Most of the leaders in Indian education support micro-credentials to help students get ready for jobs. This shows that schools are committed to offering modular and flexible learning paths alongside regular degrees.

Sridhar Vembu, the visionary founder of Zoho and one of India's rising industry leaders, has said: “Education should not just be about memorizing facts and rote learning, but about developing problem-solving skills and entrepreneurial thinking that can directly lead to job creation and economic growth in India.” “Learning must be localized in our schools, and students must be connected to the real needs of businesses and communities.”

Mr. Vembu has spoken out against relying too much on expensive foreign degrees in forums and interviews. He has called for debt-free, skill-based reform that is especially sensitive to India's multilingual environment and economic goals. He believes that higher education should be more than just a way to get certificates; it should also be a basis for sustainable growth and national self-reliance.

But there is another side to the story so far. In a time of rapid change in technology and the economy, the intellectual base and social fabric that traditional degrees provide are still very important.

The World Economic Forum's 2025 Future of Jobs Report says that cognitive and soft skills, like critical thinking, creativity, working with others, clear communication, and resilience, are the most important things for lifelong learning and being able to adapt. It is possible to develop these traits through strict academic training and social life on campus. University education can help students deal with complicated and uncertain futures. In fact, schools are not merely places to learn; they also help people build character, make friends, and learn about civic ideals.

On the other hand, the flexibility of skill-based, experience learning is also very useful. AI and other fast-growing sectors need people to keep learning new abilities. Job postings in these fields list five times as many specific skills as job postings in other fields.

Skill-first pathways that are trimmed for relevance speed up the time it takes to get a job and lower the costs of missed opportunities. But in subjects like sustainability, management, and policy, degrees are still very important because of the context of the sector and location. In a country like India, where there are a lot of people looking for work, degrees are a logical way for recruiters to weed out candidates.

It is true that accusations that degrees are “dead” or “outdated” typically neglect the differences in education and the economy in India and around the world.

Competency-mapped degrees that combine clear skill outputs with micro-credentials that are relevant to the sector can open up equity, access, and relevance. International experience clearly shows that stackable and portable (skill-based) certificates make it easier for people to move on in their careers while still upholding academic standards through strong quality assurance. Industries should also take the initiative to fund and acknowledge alternative credentialing as important additions to formal education, rather than seeing them as replacements or stand-ins for organized learning.

Owners of institutions must also change. They should aim to create more experience collaborations, bring industry into academic settings, and establish project-based curricula that combine theoretical and practical learning.

It's important for faculty to learn about the technologies that are relevant to their work. Industry partnerships that use skill maps to clearly show what graduates can do will help both businesses and students trust each other. Students also need to learn how to make smart decisions about their careers by combining degree foundations with abilities that are immediately useful in certain fields.

The stakes are quite high in India, where the economy is developing at a rate of about 7.8 percent per year and IT exports are worth more than USD 350 billion. Not only is it excellent policy to focus on both long-term academic rigor and quick skill acquisition, but it is also a developmental necessity. If degrees and talents are combined correctly, they can be the building blocks of a workforce that is ready for the future and can innovate, include, and expand. Formal and structured education from reputable colleges continues to serve as a significant catalyst for egalitarian opportunity and national growth.

(The author, a journalist turned entrepreneur, writes on higher education, skilling and education policy.)

Published - October 23, 2025 08:02 pm IST

Source: The Hindu
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