Recently I visited Education investment summit of VC Circle.
It was a huge summit with More than 400 participants from all sectors ranging from VCs, Bank, University, K12, Kids schools, Preparatory schools, Skill Training schools, technology providers, content providers, Publishers....... . . . .
Everybody is gung -ho about the future. Just go and make investments. Somebody told me if you are looking at just 25-30% profit margin, close your eyes and enter any segment !!!
The data are really impressive - India's growth in terms of population, spending power, reach, Government focus.. everything is pointing at unabated growth for several years to come.
At funding somebody asked an investor - what is the right time to look for the VC funding. Even at idea stage - came the answer. However it is clear that Education is a business where one need patience. It does give results but not overnight. Scalability is an issue.
The new area like e-learning, e-interactive classes, technology for school running are also growth area.
Nobody however seems to have un-coded the blind men's elephant that is skill development segment. There are large players like Manipal [ 600 Centers] , Educomp [200 Centers], medium ones like Wigan and Leigh College or several small ones. NSDC mentions that India is expected to be home to a skilled workforce of 500 million by 2022. About 12 million persons are expected to join the workforce every year.
How is the country going to meet the additional requirement for 3.7 million engineers, 23.4 million skilled workers and 57 million unskilled and semi-skilled workers by 2020 !!!
With NREGA paying 150 / 200 per day why anybody would wish to get a training and look for a job which would pay him -- 6000/10000 per month that too after leaving his native place.
While we continue to look for solution to this puzzle - it is clear that if skilled workers are not coming to industry, India is going to depend more on China for it's products and Government's new policy of increasing Manufacturing's contribution in GDP from 17 to 25% can not be achieved. Somebody has to pay for training.
Infosys and L&T are paying by arranging in-house training to recruits for several months. Loosing not only money, unrealised salary costs but also delays in their project execution. I have heard the stories from other Industries also where they put recruits with senior workers and let them do mistakes to learn. A costly solution indeed.
Even bigger problems are in retail - Big Bazaar, Chroma or restaurants like McDs, CCDs where if you do not have people the business is completely lost. There is no time inventory. If we look at Banking or financial services, the problem is even more acute - here you not only loose the current business you also loose future business. Service quality and service delivery is extremely important.
I met skill development cos. which have two separate divisions. One work with industry. Find about their requirement and provide the right quality employee. The other go to the hinterland and encourage youth to learn such skills and get the job.
At another place a textile company has created a division which recruits 10th pass girls and give them a training at their training Centre. They are hired for 5 years during they get a degree by distance education taking evening classes at the company. At the end of year 5; they have a degree, know English, have Rs 1 lac as PF - ready for a family life ! At the same time the company have fixed cost trained employee and get rid of union activity. Interesting.
While current rage is formal education and MBA type education. However I am convinced that in the long run an education which can really bring long term job security to masses will prosper.
Looking forward to your comments.
Shyam
+91 9810549136
shyamznwar@hotmail.com
