The increasing dependance of Globalisation Factors

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With globalisation with an increasingly inter-dependent world, countries are vigorously pursuing policies to optimise positive factor endowments. The rapid technological changes will reinforce the process of global integration. It is believed that the battles of this century will be fought and won with the "power of ideas." Societies will become fully knowledge dependent and promote knowledge based industries.

India has an added comparative factor advantage because of a vast reservoir of skilled manpower. The demographic differences reveal that over the next 20 years, India will have distinct advantages in a population profile concentrated in the younger age group, where many opportunities can be optimised.

What are the policies that can enable India to optimise these opportunities and what should be done as a nation to turn out to be winners?

The All India Management Association (AIMA) had set up a High Level Strategic Group comprising leaders from industry, academia, and the government. The results of the deliberations of the group, involving in-depth interaction with wide segments of society and decision makers, are contained in this report. A task force comprising AIMA and the Confederation of Indian Industry has been constituted to implement the Action Program that has emerged. They had lot of suggestions which have been included in the report. This will enable India to enhance its growth, secure additional employment, and maximise the emerging opportunities.

Global Scenario:

STUDY ON PERCENTAGE OF FOREIGN STUDENTS IN US IN '08-'09

The United States is known to have state of the art facilities, highly qualified and trained teaching staff and a very well defined education system. These are the reasons why it is seen that while looking at education from a global perspective, we can not leave aside US. It is necessary to study the number of students opting to leave their nation countries and move to US to pursue their undergraduate and post graduate education. Given below are some figures which indicate the number of non US origin students studied in US:

Foreign Students in the U.S. by Region of Origin, 2008-9

Asia

62%

Europe

13%

Latin America

10%

Africa

5%

Middle East

4%

North America

4%

Oceania

1%

Total

6,71,616

Note: Percentages are rounded off

Source: Institute of International Education

Indian Scenario:

Stats & Figures

Population of India

1.2 billion approx

Literacy rate

66%

Male literacy rate

76.90%

Female literacy rate

54.50%

No of schools

Primary - 8.4 lac approx

Secondary - 1.1 lac approx

No of colleges

General - 7782

Professional - 2124

Funds allotted to education

$438 bn

Alarming Facts

35% of the population in India is still illiterate.

Only 15% of all the students enrolled in primary school reach high school.

In spite of new colleges emerging every day, India could offer enough seats only to 7% of the country's total college-age population.

25% of the teaching positions in India are vacant.

57% of college professors lack either a Masters or a PhD degree.

In India it takes 14 different licenses from four mutually independent government authorities to start an average level private school.

The Govt. of India has decided in Jan 2010 to withdraw the 'Deemed University' status from 44 well known universities in the country

In February 2009, a raid in Bihar found 100,000 fake certificates from 19 fake institutions.

Governing Bodies

AICTE (All India Council for Technical Education) & UGC( University Grants Commission) are the two main organizations that oversee the education sector in India.

The AICTE was formed in 1945 whereas the UGC was formed in 1953

The main difference between the two is that UGC monitors the funds allotted to the institutes whereas AICTE looks specifically after the technical studies in India.

Engineering, MBA and Pharmacy comes under the umbrella of technical education.

The UGC conducts the NET exam for appointing teachers in colleges.

Role of AICTE v/s UGC

AICTE

UGC

Formed in 1945.

Technical institutes are overseen by AICTE

Primary function: To undertake surveys in various fields of technical education.

Has to answer to the HRD ministry

Formed in 1953

All other colleges are overseen by UGC.

Primary function: To look after the financial needs of Universities

Free to do whatever it likes

Right to Education

Government of India launched the Sarva Shiksha AbhiyanHYPERLINK "http://www.educationforallinindia.com/page119.html" (SSA)in 2001 which is the most recent initiatives of the Government of India, which presents its guidelines, planning methodology, data on elementary education created under District Information System for Education HYPERLINK "http://www.dise.in/"(DISE). The next step in this journey was taken by the Right to Education Act. By this act, every child between the ages of 6 to 14 years has the right to free and compulsory education. The government schools shall provide free education to all the children and the schools will be managed by school management committees (SMC). Private schools shall admit at least 25% of the children in their schools without any fee.

The funding for the Sarva Shiksha Abhiyan has to come from 65:35 between the centre and states. State governments and the local bodies should come up with primary schools within every one kilometre of area. For children of higher secondary the school has to be within every three kilometres of area. If the above facilities are absent, the onus lies on state government to make arrangement for free transportation or residential facilities to the students.

Challenges to RTE:

* Shortage of funds.

* India needs at least 500,000 more teachers to make it success.

* There are still many states who are not cooperative in implementing the Act.

* Thousands of schools still don't have an adequate infrastructure.

* A proper monitoring system to see its execution.

The following methodologies have given a new face to the playing field of the education sector. These are elucidated as follows:

E learning:

E Learning as a trend is set in the West and India is taking up the same. There are certain advantages of this system like, it is self-paced i.e. Learning can be done at one's own pace. E learning can be interactive and the timing and duration of classes is your own decision. This reason makes it suitable for working professionals.

There is enough scope of business in developing online learning. In future, there will be high demand for those technologies and people who can develop a multi-lingual courseware. High quality e-learning solutions are being developed and industries like steel, IT, automobiles, cement and telecom are using them. Estimate says that India in coming years is bound to grow in its stature as a hub for e-learning programmes because of IT support and computer education penetrating to the bottom of pyramid. It is imperative that e-learning will dominate as a way of acquiring knowledge in coming years as low cost PC would be available and broadband will be able to penetrate deeper especially in rural areas.

Last five years, the Human Resource Development (HRD) has been trying to bring radical change and attain the goal of making primary education accessible to every child in India. The government is trying to bring in as many colleges as possible under the University Grants Commission (UGC). The UGC and AICTE can then push measures to bring Quality. Through the National Mission on Education and Information & Communication Technology an amount of Rs 4612 cr is decided to be spent for the 11thFive Year Plan for the scheme with a budget of more than Rs 502 cr for the financial year 2008-09.

One significant project aimed at providing all web based training is the National Programme for Technology Enhanced Learning (NPTEL). It was first conceived in 1999, to set the path for introducing the multimedia and web technologies to enhance learning of basic science & engineering concepts. Finally it was launched in September 2006.

Major Players: There is a big list of companies who have developed competencies to develop e-learning packages. Tata Interactive Services, Genpact and Binary Semantics are few prominent names. CDAC and IGNOU are two of India's most esteemed organizations in their respective fields, which have held conferences in the field of e-learning every year. Many private institutes have entered into online distance education. The famous NIIT Varsity is known for offering training to 500,000 students annually across 33 countries. One of the world's leading management schools, the Indian Institute of Management Calcutta, like many others, entered into strategic alliance with NIIT, to offer an executive development programme through virtual classrooms.

Challenges

However, there is not enough of e-learning courseware that addresses various topics. With the current rate of investment and government support, it will take long to cover significant areas of course material in form of e-learning. The other challenge is the classical "resistance against the change". Many instructors believe that the changes underway are strictly about putting content online, and they fear that will remove them from the learning equation. This can be compared with libraries being the only resource needed for effective learning in last centuries.

VIDEO CONFERENCING

Video Conferencing is a fairly new technique which is consistent with the latest technology. Today it is used in classrooms and many educators use this medium to impart knowledge. Video Conferencing is an interactive communication strategy which lets students and teachers have a visual connection with each other, whether they are 5 miles away or across the globe from each other. With the introduction of low cost conferencing systems, carried out easily with inexpensive cameras and low cost or free software, video Conferencing will become more prevalent in the education industry and span across more and more educational institutions, with increase in the spread of Internet.

There are many ways in which Video Conferencing might be used in a classroom. Below are some of the ways in which it has already been successfully used for knowledge transfer:

Collaborations: VC is used for project work or research collaborations among classes allowing students in different locations to virtually work together without actual physical presence. Groups

Reporting news: VC is used to show current/live events as they happen. Eclipses, cyber events and celebrations such as those which take place during National Science Foundation's Science and Technology Week, and NASA space flights have been broadcast so that the knowledge can be shared with everybody.

Planning: Workshops can be planned for teachers or a business partner or university students via this medium. A teaching team can be formed with remote teachers and lessons can be planned.

Guest Experts: Students have the privilege to listen to guest lectures by scientists, politicians or those with special expertise, by sitting in their classrooms. Distance is no longer a factor in being able to hold a meeting, conduct a discussion or receive feedback on a science project from an expert.

Training: Students and teachers have been able to learn to use new software or techniques during videoconferences. Even learning to navigate the Internet or create a web page can be done during a videoconferencing training session. Businesses have been able to offer job orientations and training to future employees as part of career preparation activities.

Virtual Field Trips: Specific Programs and tours of aquariums, zoos, museums, libraries, hospitals and other facilities have been offered for students. Distance, cost and time factors are main deterrents to students taking a field trip to a location which could enhance their study, virtual field trips using video conferencing can often be arranged.

Team Learning and Teaching: Students and teachers can make teaching teams to provide experiences for those on the team. A lot of knowledge transfer can happen from those living in different areas and/or possessing functional expertise. Presentations from various locations made by the teams can be enhanced with the newer features available in some of the videoconferencing packages.

Job Interviews: There are some interviews in the initial stages of the recruitment process, for which the candidate need not be present in person because of the availability of Video Conferencing. Using this facility saves the candidate from spending the cost and time to travel to a distant location for the interview. Also, this speeds up the process for the recruiters who wish to interview talent from various different locations but are held back because of time spent in travelling to each destination.

Case Study: Everonn Systems India Ltd (ESIL)

Everonn System India ltd (ESIL) is giving Education at colleges& schools .It was founded in year 2000 by its present CEO Mr P Kishore.

ESIL is a training and education company providing a variety of services that include

It gives educational and training of global importance;

Designs and executes great learning initiatives and

Sets up the required infrastructure.

With presence in eleven States, over 4,400 Computer Labs and having trained 1.4 mn students, it has built a great brand image of key policy makers for Computer knowledge in Schools and colleges. It has experience of bringing management plans from premier colleges like XLRIs, IIMs, LIBA, IIT, MICA and from working students, professionals all over India.

BUISNESS STRUCTURE OF EVERONN

Broadly Everonn's business can be classified into two Strategic Business Units (SBU):

ViTELS Model:

Everonn redefined access to education by establishing Virtual and Interactive Learning classroom chain across India to provide quality yet affordable education.

This is done by providing training and education through satellite based on' Very Small Aperture Terminal (VSAT)' .

Through these students have interactive sessions with teachers and other students across the country thus truly filling the urban - rural gap.

Under ViTELS there are 4 different sub units:

- Virtual Schools (V-Schools).

- Interactive-Schools (I-Schools).

- Virtual Colleges (V-Colleges).

- Retail Outlets.

ICT Model:

Instructional & Computing Technology (ICT) basically operates on a BOOT (Build -Own- Operate- Transfer) basis entering into 3-5 years contract with state government.

In typical contract company provides everything from setting up infrastructure to furniture, AC, Faculty & education solution to govt. schools.

Each school requires 5-15 computers, and the ownership of the hardware infrastructure is typically transferred to the school's management at the end of the contract period.

Billing is done to state government& typical billing cycle is quarterly & half yearly hence makes this business Capital intensive & impacts return ratios.

MACROECONOMIC FACTORS

Ratio of student to teacher is 41 in India which is above theworld average of 27; in such a situation use of technology would be convenient for solving deficit of teachers &classroom become more exciting & entreating way to learn easily.

Everonn is bridging this gap by giving education through virtual learning technique.

In India for ICT @ schools scheme63000 are open and out of total 9 lacs Government schools 16300 schools are ICT @ schools so far by organized players, and still ~46697 schools to be included.

Private schools are 2 lacs and 80 thousand in India, just 0.80% are covered so far which shows big opportunity & everyone would enjoy sufficient shares; question is which company would have fast implementation & better content delivery model.

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CHALLENGES FACED AND AHEAD

Today one of the major topics of discussion in the education sector is the opening of the sector so that private players can enter in it that can make this field as competitive as any other sector in a free market economy. As we know, healthy competition can help to eliminate incompetent players, while allowing the better participants to succeed by providing top-of-the-line products and excellent services to their customers. We have all seen this process happening in action in other industries, so why is there such a hue and cry when it comes to the education sector?

The answer lies in the perception that is there in the mind of the people that education is essentially a not-for-profit arena where the focus should be on social good, not on capital gains. While most private players acknowledge the strong influence of this principle on industry dynamics, the state essentially looks towards government-run educational institutions and not to privately run ones to uphold the social element in Indian education - and herein lies the rub. It is a fact that India has a proliferation of government-run premium educational institutions like IIT, IIMS, NITS while privately run premium institutes are very few. This is mainly because of a strict licensing policy followed by the government where private players have to meet stringent regulatory measures in order to set up educational institutions that maintain the not-for-profit institutional structure and serves the society.

The debate in the industry and, indeed in academic circles, centers around the possibility that this licensing policy might be relaxed to allow private players to invest in education sector. On one side, advocates of the change, such as the noted economist, Kaushik Basu, argue that the quality of education delivered by government institutions is incredibly low and that the entry of more private institutions can help create competition and profitability as well as quality education, thus guaranteeing an improvement in standards of educational institutes. On the other hand, detractors proclaim that such a move will make the industry a free for all players, with the result that the social need of providing quality education will be ignored in the face of opportunities to make higher profits.

This issue of the present standard of educational institutions is a deeper one than it seems to be at first sight. It also involves arguments from both sides that talks about the low salaries received by the majority of academicians which forces them to quit for greener pastures abroad or in private institutions. This in turn has an effect on the quality of their teaching as well as increases the need to set up more technological advanced educational institutions with proper infrastructure and the use of the latest practices in pedagogy. The issue also does not seem to arrive at any conclusion. It is, of course, up to the people of India to decide upon the issue and remember that since the ancient university of Nalanda, India found popular recognition from the world in education only after privately run educational colleges were set up in the recent past.

The question before us is of prime importance. Does the education industry in India requires more private players?  If this can be somehow achieved, will it lead to a better and more efficient educational system?

BRAND BUILDING: Creating a Brand Value and Proposition

Institutes always look for various means to attract students, the question which arises is whether the known marketing principles apply to educational institutes? Is it similar to the marketing of shampoo or telecom services? Usually, marketing strategies and branding principles are universal. One has define its brand, decide what it stands for, articulate and project its distinctive features, develop a brand plan and then implement it. The tricky part, however, is that the creator or promoter of the brand might want to show his product in a certain light but the audience can perceive it in entirely different way. This is especially applicable for subliminal services such as education.

An educational brand is defined by several intangible factors like the quality of the education it provides, its faculty, culture and resources available for students. The several other factors are campus size, quality and diversity of the graduating batch and their track record in getting jobs. For education institutes, the "product" i.e. the education to be branded is very different from regular consumer product. The relationship between the consumer (student) and the product (education) is predetermined and time bound, and the consumer cannot enjoy two competing products simultaneously.

For an educational institute best way of advertising is by the "word of mouth". So it is very essential for the educational institute to provide quality education to students so as gain confidence of the consumer (student). It is very difficult to estimate the return on investment on marketing and advertisement of an educational institute because usually in an educational sector it takes around 10-15 years to establish an educational institute brand.

Making the Right Noise

Educational institutes in India, spend close to Rs. 150 million annually on promotional and advertising activities. According to TAM Media Research, spending on advertisement by the education sector have been increasing steadily over the last three years, with the education sector accounting for 1.1 percent of TV advertising and 15 percent of overall print advertising in 2008. Considering the case of Indian Institute of Planning and Management (IIPM), the pioneer of "full page colour ads" in national newspapers says it has an annual budget of marketing of Rs. 800 million and concentrates mainly on print ads. According to the Amit Saxena, president, Corporate Communications, IIPM: "The IIPM brand has been created through smart content-driven advertising". The institute has faced several controversies, the most recent being the nasty blogger controversy in 2005 regarding the authenticity of its claims in its print ads.

But according to various experts in case of educational institutes excessive advertisement can also dilute the brand image of the institute. As there is the perception that institute do advertisement only when they are not able to provide quality education and able to attract consumers (students). Whereas excessive advertisement is case of tuition and coaching institutes helps to create awareness and reach out to more number of consumer (students) and provides a platform for coaching institutes to project there past success record.

High advertising share of educational institutions under education sector in print media

Future of Brand Building in Education Sector

Indian education sector is opening up new avenues and opportunities as it is progressing and reshaping itself. Many competitors, multiple opportunities, coming up in this segment. Question arises about building of brand and communicating with students (consumers), attracting talented students to course of their choice.

How scenario is going to change of brand building in education sector

Medium

Existing Way

New Way

News Paper Advertisement

Educational institutes allocates lot of budget to print media based advertisement

Target youth of India is moving towards internet, news paper based advertisement is going to get less attention in the future.

Seminar, Road Show

Institutes conduct seminars in 5 star hotels, seminar halls. Conversion rate is low and student acquisition cost is high in this case.

Institutes will start conducting online webinars, online discussions. It will be the way to interact with students

Franchise Management

Institutes have multiple franchises, training centres to sell application forms. But tracking mechanism, conversion rate of students is missing. Institutes do not get clear picture of pre admission, admission process.

Centralized way to track student interaction, student interest, no leakage of revenue in terms of application forms fee. Better student acquisition and huge cost savings.

Customer Centric Approach

Student as customer approach is missing in the current context. Delay, misplacement is application form creates confusion among students

Institutes would be customer centric. Usage of technology would be high. Prospective students would get better service.

Private players in different segments of education sector:

Education - BUSINESS PROSPECTS

There is a good demand for quality education and online tutorial services in India. With good facilities at competitive rates, India can attract more number of students from abroad. Unique teaching methods, educational portals and tools can be effectively used to make the sector useful and profit making.

How to educate and train the Indian students and workforce

The nature of action required by India Inc. to empower students would involve the following:

Investment in faculty and education infrastructure to increase supply of skilled professionals with relevant skills

Investment in training institutions to upgrade skill sets of individuals required for remote services

Vocational skills

Communication (verbal and written)

Etiquette

Strengthening of the education curriculum to include

Practical knowledge

Understanding of other countries' cultures

Foreign language skills

Mandatory English language skills

Creative mechanisms of funding so that quality education is easily and widely available

Standards and bodies to certify skill sets

In India, corporates are investing heavily in education sector. This is expected to do benefit to the learning landscape in the country. But there has to be a check that what players are entering the education sector.

If there are no regulations in the education sector then all kinds of people will try to get into this space. The task for the government is to make sure that India does not have 'fly by night' operators and ensure that the regulatory procedures keep on quality checks from time to time. The government is playing its part by setting up more central universities, more IITs and IIMs.

Yet, a lot more work needs to be done to fill the vacuum. And so its a positive sign that the private sector is taking the initiative in this regard. Private players are actively making investment in higher education sector. However, when it comes at the school level, the corporate sector is not much keen to invest mainly because such investments will not yield high profits. Though it is expected that the responsibility to provide quality education in India is largely of the government, we would encourage the corporate sector to look at elementary education as part of their corporate social responsibility plans.

The Road Ahead

Foreign Institutes coming to India

FOREIGN UNIVERSITIES located outside India play a big role in the Indian higher education scenario. These attract many thousands of Indian students to their campuses each year -about 80,500 Indian students enrolled in U.S. institutions alone in 2008-09. Graduates of accredited foreign institutions play important roles in the development of India when they return home. Hence there will be greater opportunities available to Indian students if accredited foreign institutions offered degree programs in India to expand access to higher education to Indian students, by staying in the country itself!

The attraction of study abroad for Indian students, as a supplement to the Indian higher education available within India, is bound to continue in the near future also. For most students, the motivation is to attain the best possible education. Competition for admission to India's best institutions is very intense - about two per cent of those taking admission tests for the prestigious IITs and IIMs actually convert their calls into admission.

So considering the above conditions, recently Indian Government made an announcement that foreign universities may be allowed to setup their own campuses in India. If this proposed bill is passed in the Parliament then it is going to have many implications on the Indian Education Sector and the students.

PROS

CONS

There would be more choices available for Indian students and they would get a direct access to foreign universities at the local level.

Studying in a Foreign Institute would increase the overall cost of education thereby making it more difficult for all to get admission. At this stage, Indians need more quality education at an affordable rate.

Because of the increased competition with Foreign Institutes, quality of education offered by Indian Institutes will also be better.

There is already a scarcity of qualified teachers for the existing Indian Institutes. The gap of qualified teachers and teacher to student ratio must be addressed and foreign institutes may not address this immediately.

Currently only well off students can afford better quality education abroad. This trend can be expected to change if foreign institutes set up base in India.

Infrastructure for Foreign Institutes must be addressed in India.

If foreign institutes set up base here in India, India may attract more students from Middle East, Far East etc. This could bring in more income for the country.

This may also lead to more students coming to India thereby increasing the existing competition for Indian students.

According to industry body ASSOCHAM, the education sector (along with the healthcare and FMCG sectors) will grow at healthy rates in 2010. The industry body said that the investments by citizens on education would continue to increase to "ensure growth for their dependents and wards".

The Centre plans to permit the private sector to establish educational institutions and access the capital market, as a way of addressing the aspect of funding in the education centre.

The government has finalized the sharing of funds-for implementing The Right of Children to Free and Compulsory Education Act (the law making education a fundamental right)-between the Centre and the states, in the ratio of 65 to 35.

With the Government showing a clear willingness to engage the private sector in accomplishing the daunting task of educating India's13.5cr students, there are thus significant opportunities to tap for companies like Educomp Solutions, Everonn Systems India and NIIT Limited, both in the Government schools and Private schools businesses.

With increasing demand for skilled human resources also in sectors like Financial Services, there exist great opportunities for growth in the Corporate Training business programs.

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