Abstract: The growing dominance of the service sector in South Asian economies suggests that the development potentials that these economies can realise depend on their ability to get the fast growing younger cohort of their population absorbed in this sector. However, there is overwhelming evidence to suggest that South Asian countries suffer from significant skill gaps, particularly, with respect to the high-end services that tend to be relatively skill intensive. Skill development, therefore, holds the key to the future development of this region. South Asian economies need to make serious efforts to improve their educational achievements not only at the tertiary level, but also at primary and secondary levels. These countries need to adopt appropriate policy initiatives that will ensure future availability of skilled labour force in their services sector. This discussion paper seeks to understand the nature of the ongoing demographic transition in South Asia and the challenges faced by the countries of the region to augment their future supply of skilled labour in South Asia.
Key words: Demographic transition, demographic dividend, human capital, skilled migration, brain drain