Why India & China can never go the high-skilled route to development

Simple. Two very large populations with lots of poor, uneducated average people.

India must provide employment or atleast the opportunity of employment to all - even to its most illiterate and uneducated citizens. Its a democracy after all and no government can risk losing votes. The only way this will be done is by focussing on the ITIs rather than the IITs.

China too faces a similar dilemma - or it risks a revolution which is slow in coming compared to India's five-yearly elections but more devastating when it does.

The other point of view on this is that the populations of these two countries is so large that they should be able to absorb all forms of skilled or unskilled labour within them. Even a 10% highly educated population for these two countries is a combined population of 200 million!!!