I am in the process of advising a friend who is keen to invest in Education space in India, and this made me look closely into the dynamic of the businesses in the Vocational Training sector.
The overall, macro, factors look promising indeed. A huge population base - India will have 10 million young people entering the workforce every year from 2015 - and a changing social dynamic, when organised employment expands rapidly, are hugely important drivers. The government has been handing out huge orders for training the rural youth, and the companies we are talking to have large mandates at hand, for 'employability' training. There is a capacity building fund set up through National Skills Development Corporation (NSDC), a sort of a special purpose bank extending funding for companies in the space: Again, the companies we looked into had large NSDC allocations, which they have left unused.
Indian government has promoted 'skills' training opportunity with great gusto, with the former Prime Minister, Dr Manmohan Singh, announcing at one point the goal of training 500 million people in 10 years, an eye-watering number for most Western companies and investors. India did not have the infrastructure to offer this training, as detailed in the report from Sannam S4, a market entry consultancy (Read here): Nor it did decide what skills these millions of people could be trained on. The strategy seemed to have been to throw money at the problem - set up a public-private funding initiative in the form of NSDC to advance capacity building loans and to channel educational funding through various Ministries and State Governments - and let the desirable training programmes emerge through the interaction between the employers and training providers. Seen this way, the 'skills strategy' was more a Public Relations exercise than a strategy, and as expected, it turned out to be a stillborn.
To be fair, some progress has been made. There are new provisions of training in remote areas of India, which was not there. In a number of new areas, welding, for example, there is enormous expansion of available training provisions. India's burgeoning industries, like Retail or Rural Banking, depend on this newly trained manpower. In effect, there are a number of people who have found jobs through these programmes who wouldn't have got anything otherwise.
That said, if one measures this progress against the amount of money that has been spent, it would surely come up short. Corruption is rife in the sector, with ghost learners being reported (to be fair, it is the same thing everywhere) and money being spent on things which were not strictly necessary. But this should indeed be seen as an opportunity: The quality of offerings is so low that a new player can simply differentiate themselves in terms of consistency, an enticing prospect! The scope of innovation is wide open - most of the initiatives in India are poorly thought through, even the better ones are copy-and-paste from western templates - and any serious player can possibly make a huge difference.
However, the vocational training sector in India still faces huge challenges and may not be very attractive for smaller investments.
The first problem is lack of organised employment in most sectors: If the training company does not have the capacity to employ the trained people themselves, many government funded programmes will be non-starters.
The second problem is that the business does not scale. The businesses we are talking to often present business plans extending to hundreds of thousands of learners, indeed the NSDC conditions demand that they should be able to serve at least 100,000 in ten years, but the geographical strategy underlying this is far more complex than it appears on paper. In fact, it is at this level, villages and small towns, Indian diversity is at its best; lack of infrastructure and institutional unity at its worst.
The third problem is that at this level of involvement, nothing other than face to face instruction works, and everyone around the table knows that there isn't enough expertise, let alone teachers, in the vocational skill areas.
The fourth problem is that these skills can not be taught within a short time. This is the assumption almost all training providers and policy makers: What is there in construction that can't be taught through a six months' course? But these skills are often taught through long term apprenticeships, and trying to package them as classroom commodities didn't work anywhere. Once you change the time needed to build the skills, and the apprenticeship forms, the businesses look unviable.
Having gone through the details of the NSDC funding, one knows that the terms are very restrictive, more restrictive in some cases than usual bank loans. NSDC loans are long term and offers a cheaper interest rate, so some providers may have drawn it, but overall, they are hardly suitable for projects that assume risks of building infrastructure for a low margin operation.
In summary, the vocational training space in India, despite the rhetoric, may not be very attractive for smaller businesses. There is a huge social problem to be solved, but there is not much money to be made. Besides, the new government's priorities may be already shifting, and the gratuitous handouts from ministries that kept some businesses going for a while may dry up soon. The last government made a decision to throw money at creating a new ecosystem of training; the new government, out of financial prudence, may look at the existing training infrastructure the country already has in terms of schools and colleges, and may start channeling the money there. It will surely make sense, if India needs 500 million skilled people, to rejig the school curriculum to make these vocationally relevant.
Indian education has a billion dollar opportunity for a private business, but this may be in a different sector than vocational training. As far as the skills training is concerned, it remains too fragmented, both vertically (no organised employment opportunity) and horizontally (geographically as well as between cities and towns and villages): The government policies are misdirected, which is not a good thing when a large scale consolidation must be attempted: Besides, prudence may dictate a change of government policy and this risk needs to be factored in any investment in the sector. At this stage, India's vocational education problem still remains in the domain of public sector: Private investment may have other attractive destinations, such as Higher Ed.
Popular posts from this blog
A friend has recently forwarded me a quote from Lord Macaulay's speech in the British Parliament on 2nd February 1835. I reproduce the quote below: "I have traveled across the length and breadth of India and I have not seen one person who is a beggar, who is a thief. Such wealth I have seen in this country, such high moral values, people of such calibre, that I do not think we would ever conquer this country, unless we break the very backbone of this nation, which is her spiritual and cultural heritage, and, therefore, I propose that we replace her old and ancient education system, her culture, for if the Indians think that all that is foreign and English is good and greater than their own, they will lose their self-esteem, their native self-culture and they will become what we want them, a truly dominated nation." The email requested me to forward me to every indian I know. I was tempted, but there were two oddities about this quote. First, the language, which
Introduction : The Business of Gift Giving Business gift giving has always been common and contentious at the same time. Business gifts are usually seen as an ‘advertising, sales promotion and marketing communication medium’ (Cooper et al , 1991). Arunthanes et al (1994) points out that such gifting is practised usually for three reasons: (a) in appreciation for past client relationships, placing a new order, referrals to other clients, etc.; (b) in the hopes of creating a positive, first impression which might help to establish an initial business relationship; and (c) giving may be perceived as a quid Pro quo (i.e. returning a favour or expecting a favour in return for something). The practitioners of gift-giving generally argue that doing business is often an aggregation of personal interactions and relationships, and gift-giving should be seen as a natural way of maintaining and enhancing these relationships. ‘Business gifts, especially one given in the course of the festive s
Buzzwords have disadvantages. Right now, experiential learning is one, and that means we put the label on everything and it stops to mean anything. Also, this means reasonable conversation about experiential learning becomes difficult - at times such as this, either you preach experiential learning or you are traditional, antiquarian and hopelessly out of touch. But, overlooking the limitations of experiential learning can cause big problems. Experiential Learning does many things - putting practice at the heart of learning is an important paradigm shift - but not everything, and it is important to be aware what it does not do. Usually, we equate the terms Project-based Learning (the method) with Experiential Learning (the idea) and Learning from Experience (the ideal), treating them as one and the same and using the terms interchangeably. Any talk about distinctive meaning of these terms is usually seen as pedantic, but really represent very different ideas about education.
Today, Helen Goddard, 26, a highly popular music teacher of a City School for Girls, has been sentenced to 15 months in prison. Her crime was to carry out a year long lesbian affair with one of her pupils, who appeared in the court and admitted that the affair was consensual and it was she who pressured Helen into the affair. For Helen, a bright musician and a devout Chistian, this is an extraordinary lapse of judgement. Also, she was teaching in the £13,000 private girls only school in London. She was surely aware what the consequences of her action will be. The fact that she still could not stop herself tells us that lovers do not always act rationally, something we always knew. There is more in this affair than personal tragedies. For a start, this has all the dramatic elements: a bright, beautiful teacher more in Julia Roberts mould [as in Mona Lisa Smile], a stiff upper lip school [not unlike Wellesley] and a story like Notes On A Scandal with an added twist. Indeed, Helen
There is no other city like Kolkata for me: It is Home. The only city where I don't have to find a reason to go to, or to love. It is one city hardwired into my identity, and despite being away for a decade, that refuses to go away. People stay away from their homeland for a variety of reasons. But, as I have come to feel, no one can be completely happy to be away. One may find fame or fortune, love and learning, in another land, but they always live an incomplete life. They bring home broken bits of their homeland into their awkward daily existence, a cushion somewhere, a broken conversation in mother tongue some other time, always rediscovering the land they left behind for that brief moment of wanting to be themselves. The cruelest punishment, therefore, for a man who lives abroad is when his love for his land is denied. It is indeed often denied, because the pursuit of work, knowledge or love seemed to have gotten priority over the attraction of the land. This is particularly
Introduction: Hastings in the history of Indian Education Whether or not one includes Warren Hastings in the history of Education in India is a matter of perspective. If writing the history of education means writing the history of schools, the impact of Hastings' administration would be quite limited. If anything, the rapid implosion of local rulers in Eastern, Southern and Northern India during Hastings' tenure had meant a bleak period for the indigenous education system, as patronage and funds would have dwindled away for many of them. The Company administration really concerned itself with the schooling of the natives only after 1813, as Nurullah and Naik rightly pointed out ( see my earlier post ) and one can legitimately start the story at this point. However, if history of Education in India is to encompass the transformation of Indian Scholarship, on which foundation the new, colonial, system of Education would be built, the story must start with Warren Hast
In most societies today, making profits are accepted as moral, if not especially praiseworthy. This was not as obvious as it appears today – people used to be embarrassed about making a profit not so long ago. Crazy as it seems today, it is worth thinking why it was so. Profits, as economists will put it, is the reward for risk-taking, for putting a business enterprise together in the pursuit of an objective. In this definition, remember, profits are not what it is commonly understood to be – the gross middle-line towards the bottom – but a figure net of entrepreneur’s earning [wages for his labour], dividends and interests on borrowed capital, and provisions for building and other physical assets [a sort of rent, offsetting what these assets could have earned if leased out]. This pure profit – surplus – accrues to a business as a reward to its organisation, for the act of entrepreneurship itself. Economists were divided on how this surplus comes about. The conventional wisdom was,
I wrote a note on Kolkata, the city I come from and would always belong to, in July 2010. Since then, the post attracted many visitors and comments, mostly critical, as most people, including those from Kolkata, couldn't see any future for the city. My current effort, some 18 months down the line, is also prompted by a recent article in The Economist, The City That Got Left Behind , which echo the pessimism somewhat. I, at least emotionally, disagree to all the pessimism: After all Kolkata is home and I live in the hope of an eventual return. Indeed, some change has happened since I wrote my earlier post: The geriatric Leftist government that ruled the state for more than 30 years was summarily dispatched, and was replaced by a lumpen-capitalist populist government. Kolkata looked without a future with the clueless leftists at the helm; it now looks without hope. However, apart from bad governance, there is no reason why Kolkata had to be poor and hopeless. It sits right
In our age, the only way to be politically correct is to be democratic. This is a post-70s affair - those days, still, some people had alternative ideologies in mind. Those alternate ideas are dead and gone, long discredited, and it seems that we have only one system which can make people happy, free and live longer. So, we have this huge export industry of democracy, and democracy's warriors, which the American security establishment has lately become. The democracy's businessmen, the bond traders, the media barons and the Hollywood types, are feted everywhere. The consensus is deafening and dumbing. It is indeed awkward to ask now - whether democracy is the right system for every society. It indeed should be. Collective wisdom is better than individual autocracy. In societies where democratic elections have been few and far between, the popular vote has demonstrated the extra-ordinary political savvy of the usually disinterested masses. Democracy has proved to be an excell
Introduction Erna Petri née Kürbs, a farmer’s daughter from Herressen in Thuringia, arrived in Ukraine with her three year old son to join her husband Horst in June 1942. Horst, an SS leader inspired by Nazi ideologue Dr Richard Walter Darré, settled in the plantation of Grzenda, just outside today’s Lviv, to become a German Gentleman-Farmer. Erna saw Horst beating and abusing the workers in the plantation within two days of arriving there, which was, as Horst explained, necessary for establishing authority. Erna joined in enthusiastically, settling into a combination of roles of ‘plantation mistress, prairie Madonna in apron-covered dress lording over slave labourers, infant-carrying, gun-wielding Hausfrau.’  However, there were clear rules in the plantation, and Erna was very much expected to play the woman’s role of being a Cake-and-Coffee hostess. When four Jews were caught in the estate while trying to escape from a transport to a death camp, Horst told Erna and her female
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.