Education: ICT is the Stated Strategy

India’s education sector is the third largest in the world, and its higher education the second largest. An estimated close to 250 mn students enroll for various schools and educational institutes every year, with as many as 235 mn of those students being in KG-12 level. It has more than a million schools and close to 25,000 higher education institutes. The spending on education as a percentage of national GDP is a little less than 4%. The size of the formal education market in India is estimated to be $45 bn while the informal education segment accounts for another $7 bn, according to the estimates.

Yet, with its billion plus population and uneven penetration, India ranks a lowly 148 in the Education Index of UNDP’s Human Development Index rankings, incidentally below its overall ranking of 134. While part of that is because of low adult literacy, it is also because of low gross enrolment ratios in schools and colleges.

India is a young country with close to one third of its population below the age of 14. The access to quality education by these young people will determine how well India of tomorrow shapes up, and equally importantly, how well it plays in a world that is fast ageing and looking to countries like India for people in the working age.

The Eleventh Plan talked of universal enrollment of 6-14 age group children including hard to reach segment and aimed to eliminate dropout at primary school level. The Right to Education (RTE) Act made it a fundamental right to have free and compulsory education for all children in that age bracket.

Decades of effort have yielded some results. According to Annual Status of Education Report (ASER)–Rural, 2011, the proportion of students in age group of 6-14 enroled in schools in rural areas is 96.7%.

But just enrolments do not ensure education. What is lacking is quality of education, basic infrastructure, and inadequate number of teachers at the school level. This is what is the primary objective as far as education is concerned, in the 12th Plan. “Despite improvements in access and retention, the learning outcomes for a majority of children continue to be an area of serious concern.

Several studies suggest that nearly half the children in grade 5 are unable to read a grade 2 text. Concerted efforts are required to ensure that a minimum set of cognitive skills are acquired by all children during 8 years of elementary education. Thus, quality issues and determinants thereof such as ensuring availability of trained teachers, good curriculum, and innovative pedagogy that impact upon learning outcomes of the children must be addressed on priority basis,” the approach paper to 12th Plan notes.

In secondary level, even enrolment is low at around 60%. That has to be improved. The government for the first time is thinking along the lines of using the private schools effectively to achieve the objective. While private schools have existed and the enrollment in such schools even in rural areas is as high as 25% according to ASER 2011, they have not been part of any government schemes. Now, with the government realizing the ground reality and mandating that 25% of their seats should be reserved for economically backward students.

In higher education too, the thrust is on quality, while ensuring that the enrollment too goes up. The 12th Plan approach paper says, “There must be a strategic shift from mere expansion to improvement in quality higher education. For this, the focus should be not only on larger enrollment, but also on the quality of the expansion.

During the Twelfth-Plan period, an additional enrolment of 10 mn could be targeted in higher education equivalent to 3 mn additional seats for each age cohort entering the higher education system. This would significantly increase the GER bringing it broadly in line with the global average.”

About 18% of all government education spending or about 1.12% of GDP is spent on higher education today. The 12th Plan approach paper suggests that this should be raised to 25% of total spend on education; that is 1.5% of GDP. An increase of 0.38% of GDP means an additional allocation of about `25,000 crore to higher education for the center and the states taken together, it estimates.

It is unequivocal about the use of ICT in education.  “Information and Communication Technologies (ICTs) should be harnessed to enrich teaching learning experience, to extend and diversify delivery, improve research quality and collaboration by making knowledge and information widely available, and ensure effective governance both at the institutional and systemic level. Student services need to be significantly improved and admissions should be streamlined,” it notes.

A National Policy on ICT in school education is in the making. Going by the latest draft (March 2012), the direction is clear. The government’s focus to leverage technology now seems to be more than connecting to schools and having a couple of PCs in schools.

It recognizes that ICT can play a far more important role in all aspects of school education such as content distribution and knowledge sharing, digital delivery of educational content, capacity building/teacher training, using interactive tools and applications for improving basic skills in students, helping students with special needs, distance education, creating vocational courses, and above all more efficient management of schools and the ecosystem. The draft paper addresses each of these issues quite exhaustively.

The Structure & Technology Usage

The Indian education system can be broadly divided into 2 categories: Formal education and informal education. Formal education consists of school education (K-12) and higher education, while the informal education consists of a fast-growing coaching class segment, vocational education, and the booming pre-school education.

As much as 80% of the formal education is still controlled by government schools and colleges. The rest is with private sector. In informal education, the government is present in only vocational education along with private players. In the 12th plan approach paper, it talks of integrating pre-school education with government-owned schools.

Of course, the level and maturity of technology usage is quite different (see table). There are primarily 5 areas in which technology is deployed in educational set-ups. They have different levels of maturity in different segments. Here is a round-up.

• Management, Administration & Academic Operations: In developed markets, where they are still experimenting with new ways of imparting technology-leveraged education, this part of technology usage, however, is mature. India, thanks to its late exposure to technology, this is something that is still very nascent. While most top private schools, colleges, and institutes are quite mature on their technology usage as far as management goes, it is almost not there in government schools. While that is understandable, what is surprising is that, even in top technology institutes carrying out technology research and having access to all the latest technology, the maturity of usage of technology in academic operations and management is very low. The reason is partly little importance to this aspect and the less than enthusiastic staff response. With the underlying infrastructure in place, it just requires a little push to get this done.
• Education Delivery: This is the most challenging part and there is no solution that fits all. There are fundamental issues within our education system: Availability of teachers, quality of teachers, access to schools, access to good educational content, access to vocational education. While the experiment continues, in the last decade or so, some models have been successful. Companies like Educomp and Everonn have done a good job of putting all the components together to take it to schools. These are deployed directly by private schools and the companies work with governments to implement them in government schools. However even they are not adequate. They bring the students to a special room rather than taking technology to the classroom. Some efforts are being made by some vendors on this regard. This is the area that is seeing most experimentation and is one of the hottest opportunities for the tech community, if they could figure it out. Since this requires very localized solutions–not just local language content–this is the space that will see the next boom in entrepreneurial opportunity. The potential is huge. It is still nascent and may take a while to gain momentum.

• Digitization of Content: Digitization of content and its delivery in the right format/channel is not an innovation challenge but provides a huge opportunities, considering the volume of content, number of languages India has, and the different levels of technology adoption at different levels. Will soon become a volume/efficiency game. This will most likely be centralized. How the new value chain emerges remains to be seen.
• Helping in Capacity Building: The most underrated and underdeveloped out of all areas, it speaks volume of the far-sightedness of Indian policymakers to think of using ICT for achieving this. While how it pans out remains to be seen, a branded program with participation of central, state governments as well as private sector may be the way to go.
• Research & Collaboration/Knowledge Sharing: Research is an area where India compares with the best in the world, especially when it comes to technologies such as ICT, biotech, and material science. However traditionally research was carried out in silos. The new seamless connectivity has made it possible to make research a collaborative effort. Research and academic institutes across the world are trying to create that connectivity and networks dedicated to the research community. India too, after a few isolated efforts, is creating what is called the National Knowledge Network (NKN), an ultra high bandwidth network that not just connects the research and academia but would have applications to facilitate collaborative research (see box). This will see huge investments in near term and offers a great opportunity for tech vendors.

 

Spending on IT

According to our estimates, the total spend on IT (excluding expenditure on communications services) was `3,300 crore by the education segment, with a whopping 96% of it being spent by the formal education segment. Out of that, the schools and institutes in government sector spent 79% while the private sector in the formal education segment spent 16% of the total IT spend. We expect a 19% rise in spend by this segment in FY13. While the government is still spending largely on infrastructure, the private sector has a higher ratio of applications to infrastructure spend.

Our estimate is based on top down approach for government spend and an average spend approach for private institutions. This has been validated by comparing with the actual spend in a few selected government higher education institutes, private higher education institutes, and private schools. That has not been done in the case of government schools as the decision on most IT purchase is not taken at the school level.

It must be noted that this does not include the spend incurred towards national knowledge network. That itself would see a significant spend. This also does not include the spend on IT–primarily PCs and other accessories–by the student community from the open market. Technically, that is not a B2B spend by the education segment. A rough estimate would put that at another `200-250 crore.
There is a peculiar problem that exists in the government schools in rural and semi-urban areas. While the government is spending on computers and networking, very often the support provided by vendors–selected on L1 basis–is poor. In many cases, a basic technical problem in a PC takes days to get rectified. While many government schools now have computers, they remain a novelty for the students and there is a long way to go before they get integrated with the actual delivery of education. In some cases, where the government has taken special initiative to address this challenge–many do not even realize that the challenge exists–this is being innovatively tackled, as in the case of Kerala. In many schools, which larger NGOs are working with, of course, the problem has been identified and there are efforts to make computers part of actual imparting of education.

Lack of broadband access is another issue that is impacting any effective use of ICT beyond teaching the basics of computers. Most schools having computers do not have a working internet connection despite the services being available in the area. Without access to internet, a PC has got limited utility. That is a challenge that the government should try to address in the 12th plan. In urban areas, most schools have some internet access and many even have wireless LAN.

In the coming 12-18 months, the spending on education would be driven by spending on PCs/PC software, networking equipment/SAN/wireless LAN, and some sort of spending on digital content enablement, which will vary across regions. Services remain an untapped opportunity. In applications, some spending will happen on library management systems in government colleges and higher education institutes.

With most admissions being now done online, there will be spending on that account. In addition to individual education departments, we expect considerable spending by education authorities and regulators such as state boards. The education departments in many states are going for unified admission systems and that offers an opportunity.

According to our rough estimates, in the next 3 years, PCs, system, and storage will account for 35% of IT spending, networking equipment for about 20% of spending, services including digitalization for another 25% of spending and 20% for applications. This does not take into account spend on packaged content, telecommunications.

For the IT industry, education is the classic balancing factor. The segment–except some part of informal education–is not vulnerable to any economic slowdown. In the slowdown of 2008-09, this trend was clearly observed. Those with high exposure to government and education survived the slowdown as the spending continued in this area.

Technology in education remains the biggest opportunity as well as challenge for a country like India. Unlike in other verticals, where it is just a matter of time, in education, no generic strategy will work. We expect new experimentations and innovations some of which could be carried to other emerging countries. n