The business of schooling

It is important to understand and accept that we are in the era of technology and the demand for an upgraded education system is necessary. The integration of business and technology is an essential one as, with the changing times, it is necessary to dictate the evolution of one's business model and blend with the current business ecosystem.

Indian Industry Facts:

Research shows that the Indian education market, in terms of revenue, stood at $97.8 billion in 2016 while FDI in education sector in India stood at $1.4 billion (April 2000-Dec 2016). India has one of the world's largest higher education systems with enrollments of 33.3 million students in colleges, institutions, across 50,000-plus higher education institutes and 750-plus universities.

The past findings of the 'Child Population & Literacy Rate' section of the 2011 Census showed that the gap between the male and female literacy rates fell from 21.59 per cent (2001 report) to 16.68 per cent in 2011. States and Union territories like Kerala, Goa, Daman and Diu, Tripura and more attained literacy rates of 85 per cent and above.

Let us now fast-forward to the current times and see the school-going population in India and the opportunity it provides.

According to Technopak report released in 2016, the current value of India's education market is $100 billion. The key findings include:

* The K-12 (kindergarten to 12th grade) segment occupies and offers the largest market in the business at 52 per cent

While higher education occupies 15 per cent of the business market, textbooks, e-learning and allied services comprise 28 per cent while vocational education in manufacturing and services occupy five per cent with K-12.

* The CAGR growth rate is estimated to increase by 16 per cent by 2020, moving from $100 billion to $180 billion

These points reiterate the fact that more and more students are enrolled in schools today to get a formal education. According to the Annual State of Education Report (ASER) surveys, one of the most striking trends in Indian school education is the increase of private sector participation with an estimated 300,000 private schools with 40 per cent of the total student enrolment.

Private enrolment in elementary schools is approximately 35 per cent and over 50 per cent at the secondary level. Studies show that upward of 75 per cent of children in cities are attending private schools and interestingly, this trend holds true in rural India as well.

The ASER shows that enrolment in private schools at the elementary in rural India has increased from 19 per cent to 29 per cent.

Why the education sector:

Starting any business is a daunting task. Every entrepreneur wants to have a business that gives guaranteed returns. Education is one such industry, only because there is a high demand for quality education and the number of good schools is limited.

Years back, schools were run only by the government or we had convent schools where fees were minimal. There were very few single property private schools. As policies change over the years, so do the scenarios. There are various private schools that have taken the franchise route; they offer varied options to parent's right from different boards to fee points to facilities to a holistic curriculum. Parents now prefer to send their children to private schools as they use the latest technology and have worked at upgrading the syllabus and teaching methodologies.

Investing in education is the rewarding in every sense. As stated above, education is at the core of any economy so you are taking part in nation building, you have the opportunity to leave a legacy behind and you have the opportunity to groom the future of tomorrow. Education is one of the most rewarding businesses in every way an entrepreneur can invest in - it is a qualitative yield.

Management?education in India has evolved considerably over the past 70 years. The economic liberalization era of 1990s and the consequent rapid economic development witnessed substantial demand for MBA education. This paved the entry of large number of public and private institutions to offer MBA programmes across the country. Thanks to MBA emerging as a preferred (read “glamourous”) qualification, it is widely perceived as a panacea to address all business challenges. However, the mushrooming of MBA schools has left their own structural weaknesses around resulting in a plethora of challenges. The current wave of turbulence caused by the twin influences of technology disruption and the pandemic has exposed the weaknesses in our?management?education and the need for urgent remedial action to address them.

Challenges abound

There are a bouquet of challenges, some isolated while most others inter connected. These can be broadly classified as skills and knowledge related with an over-arching influence of behavioural aspects. This is emerging out of a combination of shortage of high-quality faculty members and enrollment of poor quality students.in schools that are poorly equipped even otherwise. Teaching profession fails to attract top talent because it is not adequately valued and rewarded in India. This needs to be addressed with some fundamental reforms. Another very critical issue is the academia-industry disconnect. Programme curricula are often not updated and aligned with rapidly evolving industry requirements. Therefore, business graduates produced by a large number of institutes are not ‘battle-ready’ when they commence their jobs!

Consequently, we are experiencing a challenge of the ‘quantity versus quality’ conundrum. Standards of?management?programmes differ vastly across institutions. This is acute with lower-rung schools that lack well-trained faculty and required infrastructure. Large recruiters are mainly interested to hire the best talent for which they prefer top-tier institutions such as the older IIMs and ISB. So, the present system creates a ‘dual citizenry’ of business managers, which leads to discontent.

Imminent shift and way forward

Management education?in India is all set to be revolutionize thanks to the rapid and drastic changes impacting the various constituents of the business environment. Naturally, industry is demanding managerial talent that is equipped with new-age capabilities and skills. This overhaul is likely to comprehensively reform the design, content, and delivery of management education in the country. We envisage the following dimensions of this impending transformation:

?Fading borders, Intensifying competition: The Covid-19 pandemic has accelerated the pace of digitalization of education. Since most programmes are now virtual, geographic boundaries do not matter. Students can enroll in virtual courses offered by universities abroad. Many renowned foreign universities have already established their satellite offices in India. Several others have collaborated with Indian institutions to offer joint degree programmes. This competition is likely to grow, forcing Indian institutions to quickly improve and evolve their programme design and delivery.

?More industry-oriented specialized programmes: Increasingly, recruiters will demand better alignment between?b-school?curriculum and their job requirements. Super-specialized management qualifications will progressively become more crucial! Hence, industry-specific specialized programmes will increase, for instance in areas such as, insurance and mutual funds, healthcare management, business analytics etc. New programmes and courses will emerge, especially at the interfaces of traditional management functions (viz., behavioural finance and marketing analytics) and that of different industry sectors (namely, fintech, edge computing-based retail management, cloud-based logistics management). Therefore, business schools would have to gear up to meet these industry requirements.

?Programme design to be driven by ‘money value of time’: There is already a decisive shift towards shorter duration and modular programmes delivering specific capabilities. This is likely to accelerate going forward, as students would like to compress their learning duration. Two-year MBAs will give way to modular 15-month or one-year programmes. Market demand is likely to increase for even shorter duration programmes that provide super-specialized certifications. The challenge here would be to retain the richness of programme content and quality of delivery, even as duration is squeezed.?Technovate - Improve or perish:?B-schools?will be forced to use technology in innovative ways. Adapting to virtual modes of programme delivery, re-skilling of faculty and staff for the digital medium, usage of modern pedagogical tools such as, computer simulations, big data analytics, virtual reality and flipped classrooms will have to be adopted proactively. There will be increasing pressure on?B-schools?to shape-up or ship-out, both from the recruiters and students! This will be felt across all the rungs. The top-rung schools will be required to benchmark with the best international?b-schools. Whereas the large number of middle and lower-rung b-schools will be forced to improve the quality of their infrastructure, content, faculty pool, and engagements with students and recruiters.

?International accreditation: Modern-day?b-school?graduates are world citizens who look for employment opportunities across the globe. Their acceptance improves if their degree awarding institution holds an internationally accepted accreditation. Therefore, we foresee that Indian b-schools will increasingly strive for international accreditation such as, the AACSB, Equis and EMBA.

This will not only improve their global recognition but also the quality of placements. This will be well-complemented if Indian regulatory bodies allow novel experiments and innovations in management education, such as, international alliances, freedom to launch joint degrees with foreign b-schools, and modular choice for selecting courses across multiple streams/ locations/ institutions.

The success of Indian business schools will depend on how quickly they pre-empt the change and adapt to the evolving requirements. The ones that proactively assess the changing industry needs, collaborate with other institutions, and devise innovative programmes, will emerge as the winners. This transformation will be a welcome change that will benefit the students, recruiters, the institutions, and above all, our nation!

Wrote by :

Dr. Navneet Bhatnagar is Senior Researcher and Professor Kavil Ramachandran is Executive Director, Thomas Schmidheiny Centre for Family Enterprise, Indian School of Business.