The Indian education sector is witnessing exciting times with many radical changes taking place. India's transition into a services driven knowledge based society has played a vital role in accelerating the execution of various new initiatives in the education sector.
Quality education is mandatory if India has to continue to progress. This is relevant all levels - be it school or higher education, tutorial or vocational education. The lack of quality in education delivery and the inefficiency of the education system is a great challenge but at the same time presents immense opportunities for entrepreneurs.
The rise in the demand for quality education and auxiliary education services has resulted in the dynamic growth of the education sector. Many private companies have made great efforts to set up a strong and efficient education delivery mechanism. Going forward, this sector is expected to attract more private sector involvement and investment as the public education system is not equipped to meet the country's needs in terms of either quality or quantity. That is the reason central and various state governments are actively encouraging private participation to improve the quality and final outcome of education.
The sector is gradually getting the shape of an organised industry. For instance, earlier school and the coaching industry used to run along parallel lines, never meeting. Nowadays, both have synchronized their efforts and are giving a new shape to education delivery at the school level by complementing each other. The trend also favours organised tutorial players against individual teachers due to the former's ability to provide value added services inside the class as well as outside. Similar movements are happening in higher and vocational education also.
Factors such as the lack of quality human resources in schools and higher education institutes, a frequently outdated and rigid curriculum, no clear cut education policy, no linkage of education with industry requirements impinge adversely on the growth of the sector.
But this inefficiency of the system is presenting opportunities to private organizations. Increased use of technology and newer method of conducting classes i.e., virtual class and portal-based teaching, have also revolutionized the segment in recent years. The methods not only provide a reach to students in remote areas but also bring in a higher number of students at lower capital investment.
Among all types of education ventures, the coaching industry is the least capital intensive. PE/VC investors are fascinated with its relatively higher growth and profit margins. Schools, colleges, universities and technology driven education delivery solutions require relatively high investment. However, I would advise entrepreneurs and start-ups to keep their focus on the business plan and raise money only if it is really needed.
If we talk about regulations, though there is not any single regulator for education across India, there are a lot of disguised local and state level regulators who regularly create dilemmas for the incumbents as well as for new players. There is a big need for greater autonomy and a rational approach in the implementation of policies, inviting opinions from every stakeholder to improve quality in education, increase competition and improve transparency.
Over the next decade, the sector is expected to witness the emergence of upstarts. Old reputations will be tested and in some cases shredded, finally leading to consolidation and creation of world-class institutions.
(As told to Sarika Malhotra)