The key challenges being faced by every industry today are basically the lack of quality manpower, knowledge paucity, soft skills gap, aspirations-reality mismatch and rising salaries.

A mismatch is clearly observed between the needs of firms (in terms of manpower, aptitude and attitude) and skills of university graduates. Theoritical knowledge does not suit the practical job requirements. The nature and implications of this mismatch, specific contributions of the different cornerstones in bridging the skill gap, viz., Industry, Institution and Individual are analyzed below. The roles of the microstructure of labor markets and educational organizations in creating a better match between demand and supply of valuable skills and their specific and core competencies are examined. The allocation of general and specific training between firms and universities is analyzed.

An organization's most valuable assets are its talented human resources in spite of the advancement in technology and changes in economical aspects of the company. The letter `P' stands for people and also for priority. Most of an organization's improvement comes when right people with adequate and right knowledge, skills and behavior are deployed appropriately. In this competitive scenario, organizations recruit, engage and retain only the top talents and the `war for talent' is heating up, which is likely to intensify in the days ahead. The number of jobs available in the market is aplenty but the appropriate skills required to match with the job requirements are inadequate. According to the most recent Skills Gap report, 2005, provided by National Association of Manufacturers (NAM), 90% of the respondents expressed that they are experiencing shortage of skilled employees. Here arises the problem of skill gap. The challenges of skill gap are being confronted by the three `I's of corporate India—Industry, Institution (academia) and Individual.

MBA Review Magazine, Skill Gap, Three-Dimensional Approach, Quality Manpower, Educational Organizations, National Association of Manufacturers, NAM, All India Council of Technical Education, AICTE, National Association of Software and Service Companies, NASSCOM, Confederation of Indian Industry, CII, Research and Development, Indian Institutes of Technology, IITs.