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Tuesday 28 September 2010

Is Education India’s next gold rush?

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About twelve years ago, I was sitting in a seminar listening to the Israeli management guru, Dr Eli Goldratt, expound forth on his seminal Theory of Constraints (TOC).  Dr Goldratt shared something very basic but something we often forget - that a chain is as strong as its weakest link.  This thought has stayed with me and it brings me to the theme of this week’s blog – higher education in India. While statistics in the Indian context are astounding, the one’s relating to education are mind-boggling.
  • 5: The multiplier by which the budget for education has increased in the 11th Five Year Plan (2007-12), compared to the 10th;
  • 14%: Current enrolment rate in higher education; targeted to increase to 30% by 2020;
  • 18,000+: Number of universities and colleges in India;
  • 600,000: Shortage of doctors;
  • 1,000,000: Shortage of nurses;
  • 15 million: Annual increase in labour pool by 2015;
  • 240-250 million: Estimated skilled workers required over the next 12 years to cater to the incremental skilled workforce demand in 20 high-growth sectors as well as the unorganised sector;  and
  • 600 million:  Indians under 25 years of age.

The strain of inadequate educational infrastructure is beginning to take its toll.  A few weeks ago, the World Economic Forum released its Business Competitiveness Report 2010-11.  India had dropped two places to rank 59.  Poorer rankings on education were identified as one of the major speed-breakers.  

Sensing the opportunity, a number of players – new and old - have jumped on to the bandwagon.  Exponential growth in stock prices of educational companies over the past decade bears testimony to the demand-supply dynamics.

Leading international universities have not been impervious to India’s hunger for quality education. Last week, Duke University announced its intent to set up a campus for its business school in India. Like Yale, Brown and Massachusetts Institute of Technology (MIT), it is also in talks with India’s Ministry for Human Resource Development for partnering the upcoming 14 innovation universities. 

As institutions jostle for market share, the resulting frenzy has prompted the Advertising Standards Council of India (ASCI) to introduce a new set of guidelines prohibiting educational institutions and programmes from claiming recognition, authorisation, accreditation, or affiliations without proper evidence.   

To my mind, and borrowing from Dr Goldratt’s TOC, embedded in the education opportunity is one more nugget – that of standards and certification.  Indeed, attention to this could easily apply to India’s preparation for the Commonwealth Games.  After all, success in India is not only about what you do but how.

If you would like to increase the growth for your organisation by deepening its engagement with India, do write in at ratika.jain@whiteowladvisory.com .

6 comments:

360° said...

See related discussion at http://www.linkedin.com/groupAnswers?trk=view_disc&gid=2830446&commentID=23714992&viewQuestionAndAnswers=&discussionID=30813138

360° said...

See a related post at http://www.linkedin.com/groupItem?view=&srchtype=discussedNews&gid=1063297&item=30813841&type=member&trk=EML_anet_qa_cmnt-cDhOon0JumNFomgJt7dBpSBA

360° said...

One more discussion on this post at http://www.linkedin.com/groupAnswers?trk=view_disc&gid=3081403&commentID=23650720&viewQuestionAndAnswers=&discussionID=30812714

360° said...

see discussion on blog on Linkedin's BRIC group forum :
http://www.linkedin.com/groupAnswers?trk=view_disc&gid=90634&commentID=23752512&viewQuestionAndAnswers=&discussionID=30812837

360° said...

Comment on blog from the Economist reader's Linkedin forum at http://www.linkedin.com/groupAnswers?trk=view_disc&gid=43593&commentID=23853502&viewQuestionAndAnswers=&discussionID=30814251

360° said...

Posted by Shiv Vasisht


Excellent post, and very timely as well. It's only too true that India's education potential is yet to be tapped - and not just for the profit of the educational institutions themselves (much as all want to hop on to the bandwagon) but also in that the growth of several industrial sectors hinges on skills training right down the line - if nobody knows how to install a micro-circuit breaker in your home, all the efforts of the marketer are a waste; a bit like 'the last 5-yards' or 'the copper-wire syndrome' in terms of Internet gadgetry!

(Indian companies resolved this problem in the past through establishing their own educational institutions. Even at the level of turners and fitters, industrial groups sourced their labour from the best of their own institutions.)

Today, of course, the needs in terms of number are greater, as are the required skill-sets, yet diplomas are not only in short supply, but also out of sync with current technology.

In this context, the bottom of the education pyramid deserves more attention than the top. True, there might be more status attached to providing an Ivy League education, and perhaps more money per degree, per se, but it is the electricians rather than the engineers who will keep the wheels of the economy turning. And the mass that is waiting to be trained can more than make up for the investments in time, trainers and brick & mortar needed to dole out the B.Tech degrees - a simple question of economies of scale.

As the post mentioned, the last decade has seen a huge rise in educational institutions in India, but this is merely to profit from virgin territory. The slot for who provides best is still open (all are happy to operate in their own sphere of academia, and every student gets placed, in any case, in a booming economy). Also open is the other issue raised - who or what decides the standards and certification. It is here that we need the greatest intervention, and courage, from all concerned.

Already, at the level of high-school education, several private schools in India offer a Cambridge certification. Is this a 'Cambridge education' or merely a means to judge the academic prowess of a child basis standards set by the said institution?

Fortunately, in terms of applicable skills, we do not have to worry about the dichotomy - either the person can perform the surgery or not, regardless of his competencies with his p's and q's. Who then can ensure that the certificate always remains in demand? For the Cambridge certificate, the government has little to say - education in India is a State subject, and also open to private institutions (read enterprise). Eventually, it is the needs that it serves which determines education!

It is here that a combination of educational institutions and private enterprise would be necessary - a PPP for each metier is the need of the hour. Also, alliances between the educational partners in the rest of the world and the Indian universities/institutions would have to be formed. The ultimate test would be job creation, as well as re-evaluation of the candidate from time to time, i.e. time-bound certifications, like the language certificates offered by the EU - ensuring a standard that is recognised all over the world, and yet needing renewal to ensure it retains its worth.

Personally, I have been following this issue since several years, and in talks with private Indian institutions ready to take on added courses, provided they find the right partners. Should anyone be interested in taking this forward, I would be glad to put my shoulder to the wheel.

And thanks, again, Ritika, for raising the issue with the facts and figures so well documented.