INDUSTRY PROFILE

Overview of Education Sector

“The equation is simple: education is the most basic insurance against poverty.
Education represents opportunity. At all ages, it empowers people with the
knowledge, skills and confidence they need to shape a better future.” - Irina
Bokova (Director-General, UNESCO).

Education in its broadest, general sense is the means through which the aims and
habits of a group of people lives on from one generation to the next. Generally, it occurs
through any experience that has a formative effect on the way one thinks, feels, or acts.
In its narrow, technical sense, education is the formal process by which society
deliberately transmits its accumulated knowledge, skills, customs and values from one
generation to another, e.g., instruction in schools.

The Education Industry:

The education industry is expanding rapidly and its many businesses are eager for new
talent, including experienced professionals and enthusiastic individuals just entering the
workforce. The private sector is helping to transform education at all levels, from Pre-K
to post-secondary. Only with a steady supply of new professionals will the pace of
innovation remain strong. The education industry consists of schools, colleges,
universities and various private institutions. The education industry is booming across
the world. The industry generates large scale revenues and employment. The revenues
from higher education alone in the US are worth over $400 billion. There is huge growth
potential for this industry in fast growing economies like India and China. The literacy
rate in these countries is still below 60%.

The Education division provides education services from preschool through to

postgraduate courses and other education providers like music and driving schools, but
excludes childcare operators and student accommodation services. Consumers are the
key users of educational services, and choose between private and public providers.
International students provide an export market for education services.

Industry Products:                                              

 Government school education

 Private school education

 Preschool education

 University and other higher education

 Language and other education

 Technical and further education

Industry Activities:

 Preschool education

 School education

 Post school education

 Other education

The Global Education Industry:

In terms of global size, the education industry is estimated to be valued in the trillions of dollars.
The education industry plays a vital role in the global economy. Over 800 million adults in the
developing world are illiterate and the majority live in the poorest countries. Education is the key
to alleviating poverty in these nations – the more people who have access to education, the
greater their chances are of leaving poverty behind. Knowledge, and the ability to educate
citizens, is an important factor in a nation's worth. Countries with advanced education systems
do better on the global market.

What is Education Industry?

The education industry can be described as the collection of organizations and businesses that
provide products and services aimed at enhancing the quality of education in society. The
education industry plays an increasingly important role in supporting public education by
meeting the demand for products and services that both complement basic education services
and supplement their underlying goals. The industry is defined by four main categories:
Schools/ Service Providers, Supplemental Education Service Providers, Products, and
Education Service Businesses. Each category has distinct market segments, all of which are
defined in the subsequent articles.  India is one example of a country using globalization and
higher education to improve quality of life. The economy is thriving in areas where the software
engineering industry has developed, and globalization offers many opportunities for educated
people.

Role of Higher Education:

Today’s students will become the leaders of tomorrow’s education industry. Using a diverse skill
set, ranging from business expertise to a deep understanding of education, visionaries have an
opportunity to reshape the industry to better serve students of all ages. Higher education plays
a vital role in accelerating the economic development of a country and making its citizens better
skilled and more productive. Higher education makes it possible for people to learn how to
create and use ideas and technologies to their advantage in a knowledge-based global
economy. Individuals seeking a career in the education industry should be passionate
advocates of change based on an understanding of the education market today. Higher
education may result in higher income levels, greater tax revenues, increased entrepreneurial
activities, and strong governance. Evidence suggests that higher education has a positive
correlation with income level and quality of life for citizens in many countries.

Education Industry & Employment:

Education sector employs an enormous amount of graduates. It covers the three main areas of
school, further and higher education, as well as education that take place in non-school or
college settings. The main area of work is teaching and lecturing, but there are other roles,
particularly in education advice and development. Local authorities are the largest employers in
this sector, but there are also a large number of independent schools, as well as colleges and
universities. A teaching degree/formal education is a requirement for most jobs in this sector,
but there are some opportunities to teach without this, for example teaching English as a foreign
language.

Many companies in the education industry offer idealistic goals, combined with competitive
salaries and generous benefits. Employment opportunities are as diverse as the companies
themselves, ranging from consulting with school operators to working with software and
textbook publishers. The industry is in a growth stage, and is expected to be a major
component of America’s 21st Century economy. Numerous new companies will join those
currently in the industry to revolutionize the way people learn, research, collaborate, and teach.

Developing Nations – A Huge Market:

Two biggest economies India and China presents huge opportunities for the Education Industry.
Take example of India alone where the education market constitutes of people with a median
age of 25 years, has a target base of over 550 million people below the age of 25 years. This
means that the number of people in India needing primary and secondary education alone
exceeds the entire population of the USA. Since these students will be seeking higher
education in India over the next decade it illustrates the sheer size of the Indian education
market.

With the emergence of India as a knowledge-based economy, human capital has now become
its major strength. This has put the spotlight on severe inadequacies of India’s infrastructure for
delivery of education, particularly higher and vocational education. There exists a huge
demand-supply gap and with its rapidly expanding middle class, India’s private expenditure on
education is set to increase manifold.
History of Education & Its Growth
as an Industry
Education in its general sense is a form of learning in which knowledge, skills, and
habits of a group of people are transferred from one generation to the next through
teaching, training, research, or simply through auto didacticism.

Education in Pre-History Times:

Presumably every generation, since the beginning of human existence, somehow

passed on its stock of values, traditions, methods and skills to the next generation.
Education has been practiced since time immemorial to instill social and cultural values.
In the ancient times, the education system was verbal, carried out generally by the
elders of the family.

In pre-literate societies, education was achieved through demonstration and copying as

the young learned from their elders. Rural communities had few resources to expend on
education, and there was a lack of commercially available products for schools. At later
stages they received instruction of a more structured and formal nature, imparted by
people not necessarily related, in the context of initiation, religion or ritual. Some forms
of traditional knowledge were expressed through stories, legends, folklore, rituals, and
songs, without the need for a writing system. Tools to aid this process include poetic
devices such as rhyme and alliteration. The stories thus preserved are also referred to
as part of an oral tradition. In ancient India, the Vedas were learnt by repetition of
various forms of recitation. By means of memorization, they were passed down through
many generations.

The Development of Writing System:

Oral traditions were central in societies without written texts. With the gradual rise of
more complex civilizations in the river valleys of Egypt and Babylonia, knowledge
became too complicated to transmit directly from person to person and from generation
to generation. To be able to function in complex societies, man needed some way of
accumulating, recording, and preserving his cultural heritage. So with the rise of trade,
government, and formal religion came the invention of writing. The writing system
developed around 3500 BC, enabling the recording and sharing of information. With the
advent of the writing system - people were able to record and share information. This
became the foundation of formal education.

Various materials were used for early writing including wax-covered writing boards,
sheets or strips of bark from trees, the thick palm-like leaves of a particular tree, the
leaves then punctured with a hole and stacked together like the pages of a book,
parchment, made of goatskin that had been soaked and scraped to remove hair,
vellum, made from calfskin, and wax tablets which could be wiped clean to provide a
fresh surface.

Start of Formal Education:

The education industry was initially associated with law, trade and commerce, religion
and civil administration. Formal education was available to only a small fraction of the
population. The first large established university is thought to be Nalanda established in
427 A.D in India. The first university establishments in the western world are thought to
be University of Bologna (founded in 1088) and later Oxford University (founded around
1096).

The system developed in most countries after 1850 CE. Providing literacy to most
children has been a development of the last 150 or 200 years, or even last 50 years in
some Third World countries.

Modern System of Education:

Since the 19th century, education has developed substantially into the modern system
for standardized education. The modern education industry is based on structured
training that's developed by experts, who use organized instruction to create a
systematic curriculum. In other words, someone develops a curriculum and then an
instructor uses the material to educate a group of students – typically in a classroom. 
Nowadays some kind of education is compulsory to all people in most countries. Due to
population growth and the proliferation of compulsory education, UNESCO has
calculated that in the next 30 years more people will receive formal education than in all
of human history thus far. The modern education industry consists of training by
professionals and organized instructions with respect to systematic curricula and
pedagogy.

Education & Technology:

One of the most substantial uses in education is the use of technology. Also technology
is an increasingly influential factor in education. As computers have become more and
more commonplace, people are able to learn from their own homes. From online
courses to the vast amount of information available on the Internet, people have access
to a wider range of learning opportunities than ever before. Advances in technology
have forced the education industry to change as well. Companies have had to adapt
their products to reflect the new technology-driven learning environment. Computers
and mobile phones are used in developed countries both to complement established
education practices and develop new ways of learning such as online education (a type
of distance education). This gives students the opportunity to choose what they are
interested in learning. The proliferation of computers also means the increase of
programming and blogging.
 Technology offers powerful learning tools that demand new skills and understandings of
students, including Multimedia, and provides new ways to engage students, such as
Virtual learning environments.

Technology is also being used in the assessment of students. One example is the
Audience Response System (ARS), which allows immediate feedback tests and
classroom discussions. Even businesses have adapted, and the way they train
employees has evolved. Many companies use technology platforms to provide
education to their employees – whether it's in the form of self-directed online learning or
classroom learning with a laptop and projector.

All of these changes have caused illiteracy rates to decrease significantly. In most
industrialized countries, illiteracy is practically nonexistent. Illiteracy rates are expected
to decline even further in other countries too in the coming decades as more and more
people gain access to formal education.

Sectors in Education Industry

The education industry can be described as the collection of organizations and
businesses that provide products and services aimed at enhancing the quality of
education in society. The education industry plays an increasingly important role in
supporting public education by meeting the demand for products and services that both
complement basic education services and supplement their underlying goals. The
industry is defined by four main categories:

 Schools/ Service Providers: – Providing Elementary and Secondary Education,

Alternative/Special Education Services, Education Management Organizations, Charter

Schools, Virtual Schools and Proprietary Schools.

 Supplemental Education Service Providers: Providing Higher Education,

Vocational Education, Learning Centers, Tutoring Services and Assessment Services.

 Educational Products & Services Sector: Production and supply of educational

material and products including Educational Products, Publishing, and Supplemental Products.
 Education Support Services Sector: – Providing support and ancillary services to
education industry including Education Consultants, Education Information and
Research, Education Investment Services, Education Policy Specialists, and
Technology Services
Education Industry in India

India holds an important place in the global education industry. India has one of the largest
networks of higher education institutions in the world. However, there is still a lot of potential
for further development in the education system. Moreover, the aim of the Government to raise
its current gross enrolment ratio to 30 per cent by 2020 will also boost the growth of distance
education in India.

India’s education sector offers a great opportunity with approximately 29 per cent of India’s
population in the age group of 0 to14 years. India’s higher education segment is expected to
increase to Rs. 2,44,824 crore (US$ 35.03 billion) by 2025. India was ranked 34 among the 100
countries in English Proficiency Index 2019. Increasing internet penetration is expected to help
in education delivery. As of September 2019, internet penetration in India reached 52.08 per
cent. As of March 2019, there were 66 million internet subscribers in India in the age bracket of
5 to 11 years.
India has over 250 million school going students, more than any other country. It also has one of
the largest networks of higher education institutions in the world. Number of colleges and
universities in India reached 39,931 and 993, respectively, in FY19. India had 37.4 million
students enrolled in higher education in 2018-19. Gross Enrolment Ratio in higher education
reached 26.3 per cent in FY19.
The central government plans to disburse US$ 1 billion to states for introducing skill
development initiatives. Skill India Mission 2015 is aimed at skilling 400 million Indian youths
by 2022. As of January 2020, there were 14,602 Industrial Training Institutes in the India. Skill
India program has benefitted more than one crore (10 million) youth annually. Under Union
Budget 2019-20, the government provided Rs 400 crore (US$ 57.23 billion) for ‘World Class
Institutions’. 56 institutes were represented from India in the Times Higher Education (THE)
Emerging Economies University Rankings 2020.Education sector in India remains to be a
strategic priority for the government. The government has allowed 100 per cent Foreign Direct
Investment (FDI) in the education sector through the automatic route since 2002. The sector
received cumulative FDI inflow worth US$ 3 billion until December 2019.
The government is working on the draft of the New Education Policy to address the changing
dynamics in the education industry of the country as per the requirement of its population.
According to Mr Prakash Javadekar, Minister of Human Resource Development, Government of
India, New National Education Policy draft is ready and would be given to the central
government. According to Union Budget 2020-21, the government has allocated Rs 59,845 crore
(US$ 8.56 billion) to the Department of School Education and Literacy. Revitalising
Infrastructure and Systems in Education (RISE) by 2022 was announced in Union Budget 2020-
21 at an outlay of Rs 3,000 crore (US$ 429.55 million).
In May 2020, the Government launched PM eVIDYA, a programme for multi-mode access to
digital/online education. Other initiatives to be launched include Manodarpan, New National
Curriculum and Pedagogical framework, National Foundational Literacy and Numeracy
Mission..

Market Size
India has the world’s largest population of about 500 million in the age bracket of 5-24 years,
which provides a great opportunity for the education sector. The education sector in India was
estimated at US$ 91.7 billion in FY18 and is expected to reach US$ 101.1 billion in FY19.
Number of colleges and universities in India reached 39,931 and 993, respectively, in FY19.
India had 37.4 million students enrolled in higher education in FY19. Gross Enrolment Ratio in
higher education reached 26.3 per cent in FY19.
The country has become the second largest market for E-learning after the US. The sector is
expected to reach US$ 1.96 billion by 2021 with around 9.5 million users.
Investments/ Recent Developments

The total amount of Foreign Direct Investment (FDI) inflow into the education sector in India
stood at US$ 3.24 billion from April 2000 to March 2020 according to the data released by
Department for Promotion of Industry and Internal Trade (DPIIT).
The education and training sector in India witnessed some major investments and developments
in the recent past. Some of them are:

 In January 2020, Harappa Education raised an undisclosed amount from James Murdoch-led Lupa Systems
in a funding round.
 In February 2020, Unacademy raised US$ 110 million in Series E round from Facebook and General
Atlantic.
 In March 2020, EdTech platform Univariety raised US$ 1.1 million from Info Edge.
 In April 2020, Class Central (a free online course aka Massive Open Online Courses (MOOC) aggregator
from top universities like Stanford, MIT, Harvard, etc.) released the list of 30 best online courses of 2019, out
of which, six courses were from SWAYAM.
 In May 2020, a new mobile app called ‘National Test Abhyas’ was launched to enable candidates to take
mock tests for upcoming exams such as JEE Main and NEET under NTA’s purview.
 In May 2020, Classplus, a business-to-business (B2B) EdTech start-up, raised US$ 9 million in Series A
funding round led by early stage tech investor RTP Global.
 In August 2019, Maharashtra International Education Board (MIEB) signed a collaboration agreement with
Google for Education in India.
 In October 2019, IIT Madras reached agreement with ExxonMobil Research and Engineering Company
(EMRE) for research on Energy and Biofuels.

Government Initiatives
Some of the other major initiatives taken by the Government are:

 In May 2020, Government launched PM eVIDYA, a programme for multi-mode access to digital/online
education. Other initiatives to be launched include Manodarpan, New National Curriculum and Pedagogical
framework, National Foundational Literacy and Numeracy Mission.
 According to Union Budget 2020-21, Government allocated Rs 59,845 crore (US$ 8.56 billion) for
Department of School Education and Literacy.
  Revitalising Infrastructure and Systems in Education (RISE) by 2022 was announced in Union Budget 2020-
21 with a proposed outlay of Rs 3,000 crore (US$ 429.55 million).
 Under Union Budget 2020-21, Government proposed apprenticeship embedded degree/diploma courses by
March 2021 in about 150 higher educational institutions.
 As on February 2020, 254,897 training centers were registered in India and around 2 crore candidates
completed training under the Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA).

 Government promoted new scheme ‘Study in India’ to bring foreign students to higher educational
institutions.
 In order to boost the Skill India Mission, two new schemes, Skills Acquisition and Knowledge Awareness for
Livelihood Promotion (SANKALP) and Skill Strengthening for Industrial Value Enhancement (STRIVE), have
been approved by the Cabinet Committee on Economic Affairs (CCEA), Government of India, with an outlay
of Rs 6,655 crore (US$ 1.02 billion) and will be supported by the World Bank.
 The Ek Bharat Shreshtha Bharat (EBSB) campaign is undertaken by the Ministry of Human Resource
Development to increase engagement between states, union territories, central ministries, educational
institutions and general public.

 
Government Achievements
Following are the achievements of the Government in the past four years:

 In private equity (PE) and venture capital (VC) funding, companies in the education sector attracted US$
500 million by end of 2019.
 In February 2020, Indian Institute of Technology, Delhi signed a memorandum of understanding (MoU) with
New Zealand universities to establish a New Zealand Centre at the institute with an investment of US$
50,000 each from both parties.
 Central Board of Secondary Education (CBSE) introduced artificial intelligence as a subject in class ninth
from the session 2019-20.
 In August 2019, Maharashtra International Education Board (MIEB) signed a collaboration agreement with
Google for Education in India.

 Under the mid-day meal scheme initiated by the Government of India, about 95 million students of around
1.14 million schools enjoy fresh meal every day.

Road Ahead
In 2030, it is estimated that India’s higher education will:

 combine training methods that involve online learning and games, and is expected to grow 38 per cent in the
next 2-4 years

 adopt transformative and innovative approaches in Higher education

 have an augmented Gross Enrolment Ratio (GER) of 50 per cent
  reduce state-wise, gender based and social disparity in GER to 5 per cent
 emerge as the single largest provider of global talent with one in four graduates in the world being a product
of the Indian higher education system
 be among the top five countries in the world in terms of research output with an annual R&D spend of US$
140 billion
 have more than 20 universities among the global top 200 universities

Various Government initiatives are being adopted to boost the growth of distance
education market besides focusing on new education techniques, such as E-learning
and M-learning.
Education sector has seen a host of reform and improved financial outlays in recent
years that could possibly transform the country into a knowledge haven. With human
resource increasingly gaining significance in the overall development of the country,
development of education infrastructure is expected to remain the key focus in the
current decade. In this scenario, infrastructure investment in the education sector is
likely to see a considerable increase in the current decade
The Government of India has taken several steps including opening of IIT’s and IIM’s in
new locations as well as allocating educational grant for research scholars in most
Government institutions. Furthermore, with online mode of education being used by
several educational organisations, the higher education sector in India is set for major
change and development in the years to come.