Realising the Demographic Dividend

8/3/2019 Realising the Demographic Dividend

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Realising thedemographic dividendVocational Education and Training Initiatives in India

www.technopak.comEducation

a qua r t e r l y r epo r t by t echnopak | Ou t l ook 2011


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Authors:

Rajesh Gopal,

Associate Vice President I [email protected] I +91-8826028822

Kapil Gaba,Senior Consultant I [email protected] I +91-9818244907

Design & Development

Bharat KaushikDesign Manager I [email protected] I +91-9811661493

Arvind Sundriyal,

Senior Designer I ar [email protected] I +91-9910493934

OVERVIEW01

PRODUCTIVITY THE BIGGEST DRIVER

05

BUSINESS MODELS

12

GOVERNMENT ROLE AND INITIATIVES07

PARTICIPATION OF PRIVATE PLAYERS09

ABOUT TECHNOPAK

14

03FOR-PROFIT VOCATIONAL EDUCATION AND TRAINING


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Outlook October, 2011 | Realising the demographic dividend

1 2

OverviewTe education sector in India is presently at a pointo inection. Tere are rapid and dening changesoccurring across the various educational segments, beit K12, Higher Education or Vocational raining. Te

government is supporting multiple initiatives as theprivate investors seek to resolve issues o access andormats. Tis has in turn given rise to challenges aroundaordability and accountability which have to be dealt

with in order to catch up with the gap in capacity.

Key actors inuencing Indias increasing educationappetite are:

Demographic AdvantageMore than 50% o the Indian population is under theage o 25, this leads to increased demand or qualityhigher education and a skilled workorce.

Increasing AfordabilityHigh income households (income more than US$10,500) are expected to increase rom 5mn to 14mnby 2018 resulting in higher aordability. Tis willpropel awareness towards education as a priority and anessential tool or career growth.

Knowledge led EconomyIndia, once considered an agrarian economy, is nowdominated by the services sector. Te share o serviceshas increased rom 31% in 1991 to 55% in 2010. Tis

increase in the services sector has led to a steady increasein the demand or an educated skilled workorce.

Increased Participation o Women in the WorkorceA large young working population with a median ageo 25 years, nuclear amilies in urban areas, along withemerging job opportunities in the services sector driveneconomy have led to an increase in the number o

working women in India. Te population o workingwomen is estimated to be more than 25% by 2015.

New Employment AvenuesGlobalization has led to the increase in newer employmentavenues. Industries such as outsourcing (KPO, LPO),legal, retail, aviation, animation, healthcare, supply chain& logistics, have increased employment opportunities,and the demand or highly sk illed manpower.

2011 2015 Norma l Course 2015 Accel er ated Course

L eve l o E du ca tio n % age E st . po pu la ti on ( mn .) % age E st. po pu la ti on ( mn .) % age E st . po pu la tio n ( mn. )

Il li te rat e 35% 42 4 3 3% 425 33% 415Literate 65% 787 67% 846 67% 856

Literate but no ormal schooling 2% 24 2% 25 2% 22

School - Up to 5th standard 33% 399 35% 440 33% 421



Some college but not graduate 2% 24 2% 25 2% 22

Gradute 5% 61 5% 63 6% 72

Post Graduate 1% 12 1% 13 1% 14

otal 100% 1210 100% 1271 100% 1271

Since liberalization, capacity in the education sector haslargely been expanded in the higher education and K12segments. Te result is marginally improved literacylevels though the exercise has not made a signicant

impact on employability.

I the current momentum continues, a shit inpopulation towards higher level o education will soonbe experienced. Some impetus rom the government andincreased private sector participation can take it urther,but still the population capable o contributing at theknowledge level will stay relatively low.

Tereore a large part o the employable and willingpopulation is likely to be engaged in skill intensive areas.

And it will require breakthrough involvement by thegovernment as well as the private sector to ensure thatthese masses are skilled to meet the requirements o theemploying sectors.

Te Union budget 2011 has allocated Rs. 52,000 cr.or the education sector which is 24% more than theprevious year. In addition the government has beenairly liberal in allowing private sector to invest in thesector within the existing regulatory ramework. All thishas made the education sector one o the most lucrativeopportunities.

While the emphasis is on all the segments o the

education i.e. K12, higher education and ancillaryservices, vocational training looks the most promisingas it develops.

Te biggest challenge or the or-prot vocationaleducation and training sector is to make Indian youthemployable and productive. In this inaugural issue oechnopaks Education Outlook, we ocus on VocationalEducation and raining which will see tremendousgrowth in the next ew years, provided the participantsin the sector are able to address a ew challenges that aredocumented here.

Exhibit 1:


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While schooling and higher education have their own challenges todeal with, the trickiest challenge lies in vocationally equipping themasses realistic estimates peg that number at 60 million people overthe next 5 years.

Te magnitude o the challenge is well documented and accepted.Te government has ocused its attention and has announceda slew o measures in this context which include setting up IIs,inviting private participation through their adoption scheme andthrough ICs, the Modular Employability Scheme, National RuralLivelihood Mission, etc. However, most o these have not yieldedexpected results.

A quick look at the manpower requirement across key sectors over the next decade would help us put the challenge inperspective:

For-ProtVocational Educationand rainingMost sectors o the economy are registering impressive growth, inciting speculation that India will be the worlds astestgrowing economy in the near uture. Te idea o a prosperous India going orward is based on the premise o a avorablepopulation demographic. Given the ageing population in most other developed economies, and with median age hereat 26 years, India is looking to be an exporter o skilled manpower. Even within the country, 11-13 million people areexpected to look or employment opportunities every year or the next decade.

However employability o the population is an issue. A quick look at Exhibit 2 bel ow gives an insight into the c hallenge or the opportunity, whichever way you choose to see it in making this population productive and employable.

Chapter 1

0- 14 yrs376 mn

Indias Population (2011)1.21 billion

15- 60 yrs744 mn

60+ yrs89 mn

Unemployed80 mn

Need Retraining415 mn

Not Working203 mn

Employed461 mn

Trained46 mn

90% need VeT

0- 14 yrs381 mn

Indias Population (2011)1.27 billion

15- 60 yrs798 mn

60+ yrs99 mn

Unemployed / Not working278 mn

Need Retraining400 mn

Employed520 mn

Need Training60 mn

90% need VeT

Indias Population: Age and EmployabilityExhibit 2:

Source: Technopak BoK

60+mn people will need Vocational Training in next 5 years, while 400 mn need re-training

Ve Market Size

Private MarketSize,US$ bn (2010)

1.9

GovernmentSpend, US$ bn

3.2

No. o Institutions ~11,000 public, ~4,000 private

Growth Rate (Pri- vate Market)

18%

Regulation Not Regulated

Source: NSDCSkill Levels: Level 1 Non-technical, skill based; Level 2 Technical, skill based; Level 3 Academic, knowledge based; Level 4 Highly specialized, knowledge based

Proportion (%) Number (mn)

Industry/Service Level 1 Level 2 Level 3 Level 4 Level 1 Level 2 Level 3 Level 4 otal

Auto and auto Components 50 25 20 5 17.5 8.8 7 1.8 35

Banking, nancial services and insurance 20 40 30 10 0.9 1.7 1.3 0.4 4.3

Building, construction and real state 81 15 4 2 39.2 7.1 1.7 0.7 48.7

Chemicals and pharmaceuticals 23 28 45 6 0.4 0.5 0.8 0.1 1.9

Education and skill Development 20 30 45 5 1.7 2.6 3.9 0.4 8.7

Electronics and I sotware 20 26 50 5 0.6 0.8 1.6 0.1 3.2

Food processing 81 10 9 2 7.5 0.9 0.8 0.1 9.3

Furniture and Furnishings 80 12 7 1 2.7 0.4 0.2 0 3.4

Gems and Jewellery 75 5 19 2 3.4 0.2 0.9 0.1 4.6

I and IES Industry 50 40 10 2.7 2.1 0.5 5.3

leather 89 4 6 1 4.1 0.2 0.3 0 4.6

Media and entertainment 20 30 45 5 0.6 0.9 1.3 0.1 3

Organized retail 52 13 32 5 8.9 2.2 5.5 0.8 17.3

Others (including healthcare) 60 20 15 5 10.1 3.4 2.5 0.8 16.8

extiles and spinning 86 11 3 1 3.1 0.4 0.1 0 3.6

ourism 40 30 20 10 7.1 5.3 3.5 1.8 17.7

ransportation, logistics, warehousing and packaging 20 40 25 15 8.2 16.4 10.3 6.2 41.1

Unorganized Sector 90 5 3 2 91.8 5.1 3.1 2 102otal/ Average 63 18 14 5 207.9 59.5 46.9 16.2 330.5

Annual numbers 13.9 4 3.1 1.1 22

Exhibit 3:

80% o the skill development market is at basic levelProportion and number o skilled workorce requirement in key industries between FY2008 -22E

Vocationalraining Centres

~ 11,000

AnnualIntake: 1.8

mn.

No. ostudents:2.5 mn.

Additionalrequirement: 40

mn. seats

II: 2133Polytechnics: ~3,000

ICs: 5,906

Exhibit 4:

Current Public Ve Inrastructure


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Productivity:

the biggest driver

Chapter 2

With low wages and liberty to add more people tocomplete a job aster without incurring a huge cost,Indian employers did not ocus on productivity at thelowest level. oday rising wages, increasing pressure onresources including on the space occupied by additional

workers and the managerial resources needed to deal with them, has put the productivity o each workerunder ocus. Since the increase in mechanisation, skillsand productive use o time has also become critical orbusiness operations. Tough Indian labour productivityhas shown appreciable increment over the last 6-7 years,it still has a large scope or improvement.

In resolving this challenge there are some systemicissues that each o the participants in the sector viz. thestudent, the recruiter and trainer aces:

Students considerations:Te debate starts as a result o unwillingness o studentsand their parents to consider blue-collared vocations oremployment. Tere are several actors leading up to thesituation:

Cultural bias: Culturally, there has been a deep-rooted bias against manual labour in avour o workthat requires intellectual expertise. In modern times,

the manual labour expected on shop oors is no matchor the lure o a desk job in air-conditioned environs.Te result is that the job market is ooded with barelyemployable graduates coming out o higher educationinstitutes with unsatisactory academic quality.

Appreciating the importance of training: Te learnerseldom understands the value that the training adds tohis productivity or uture growth opportunities. In thenear term, when he does not see his training etchinghim a premium in the job market, he is not inclined toconsider it.

Economics of migration: Vocational training requiresthe learner to migrate to an industrial hub, usuallyaway rom the native place where his skills would be indemand. Te economics o such a move, given the cost oliving in an industrial hub, do not work out avourably.

Paying for training: Historically, the training orvocational streams has been through the apprenticeshipor on-the-job training method, in which the learner gets

a stipend. Tereore the learner is generally averse to theidea o paying or training which will get him similaremployment opportunities. In most cases, the learnercomes rom an economic background where he cannotaord the cost o training.

Distrust: Most training organisations, especially in theprivate sector, are not local and thereore not knownto potential trainees. Based on past experience withinstitutes that have made similar, empty promiseso employment, the learner views even a genuineorganisation with suspicion. Absence o credible,nationally known training providers does not helpmatters.

Recruiters Considerations:Te industry on its part has its own issues to consider:

Little value or premium for trained person: Teindustry does not dierentiate whether an employeehas undergone ormal training or learned skills on the

job. Superior knowledge o tools, techniques, or betterproductivity do not etch a premium. Due to lack onancial incentive ater training, the individual does notconsider ormal training.

Concerns regarding relevance of prior training: Teskills that the person comes with may not be a perectmatch with the organisations requirements. In such ascenario, the organisation has to invest time in teachinghim the necessary skills.

Just-in-time hiring: Most organisations do not maintaina bench o vocationally trained manpower. Te hiring isdone just in time and usually on a contract basis. Teindustry thereore does not have much incentive toinvest in prior training. Crunched or time, the knee

jerk reaction to hire anyone whether trained or not isthe only recourse.

In-house training set-ups: Given the insufcientinrastructure or industry-relevant vocational training,most organisations had invested in their in-housetraining set-ups on a need basis. So any gaps in trainingare met in-house.

Importing manpower: For immediate or criticalrequirements, organisations are open to importingexperienced manpower rom countries like China andthe Gul. Even though this manpower costs more, it savesorganisations the long gestation period and commitmentrequired to train manpower within the country.

raining Providers Considerations:Te third party in the equation, training companies arelooking or their own answers to:

Trainers: Lack o quality trainers, which is the biggestcost in a training set-up, directly impacts the bottom-line. A person who is trained enough to do the jobhimsel, chooses to go or the occupation, or want obetter prospects, rather than train.

Price points: A majority o students opting or vocational jobs come rom the economically lowerstrata. Also, the jobs are o a routine nature and thereoreare not economically attractive or a resh pass-out. Tisstretches the possibility o recovering the costs involvedin hiring trainers, developing content, travel and logisticso trainers and other administrative expenses, l eave alonecharging a premium.

Capex: Setting up any educational institute is capitalintensive and it is more so in case o practice orientedtraining. Te lower price-points that the training

company can command compound the problem,increasing the break-even period.

Industry linkage: A lot o investment can be avoided ithe training companies and the industry can collaborateto provide apprenticeship to students. While eorts toacilitate this are being made at various levels, there isstill a long way to go beore this arrangement becomesa norm.

Te reason that the three spokes o the wheel do not meetis the lack o an ecosystem where vocational training isintrinsic to the workorce development o the country.

0

20

40

60

GDP per person employed per hour (USD)

In

dia

Singap

ore

HongKong

Ja

pan

Indon

esia

Philippines

U

SA

Australia

UK

Germ

any

Exhibit 5:

Source: Annual Report 2011, Ministry of Labor


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Government

Role and Initiatives

Chapter 3

Te Government has lately realised the enormity othe challenge and endeavours to accomplish the samethrough various initiatives. Under the Prime MinistersNational Skill Development Mission, the Governmenthas launched an initiative to train 500 million peopleby the year 2022. Te National Skill DevelopmentCorporation (NSDC) has been created in orderto streamline identication and mapping o skillsrequirements, acilitate private participation throughgrants, viability gap unding, etc.

NSDCs charter also includes setting up o Sector SkillsCouncils or high-growth sectors which will providea structure to skills required in those sectors andtheir assessment methodology. On the basis o thesestructures, the skill requirement can be projected and themanpower can be trained. Tis is o utmost importanceas the Government cannot set up and operate the entireinrastructure and machinery required in this space; andpublic-private participation is imperative.

In addition to acilitating capacity building, the Sector

Skills Councils will dene the structure, levels andbenchmarks o training or each industry. Tis will helpin consistency o imparted training, ease o employmentand portability o skills.

Ministry o Rural Development has been running theSwarnajayanti Swarozgar Yojana under which 2.5 lakhbelow-poverty-line (BPL) youth have been trainedand placed under PPP model. Under the scheme, theMinistry extends 75% support to companies to buildtraining inrastructure and placement acilities or ruralyouth. Te initiative has now been rechristened asNational Rural Livelihood Mission and the MoRD isplanning to allocate Rs. 15,000 crores to train 1 croreBPL youth during the twelth 5-year plan period. Tismodel ater proving its efcacy will become acceptedand many private players can be expected to join in theinitiative.

Another initiative currently in its nascent stage is theproposal to set up the National Vocational QualicationFramework, which seeks to introduce vocational trainingright at the school level. Tis model is ollowed bymost countries which have a robust vocational traininginrastructure and acceptability o vocational trainingskills by the masses.

Various organisations in India, ater realizing that suchtraining is critical to Indias urther growth, have comeup with initiatives or skill development. While CII hasa Skills Development Initiative, the IIs have a SkillsIndia 2020 initiative and FICCI has a Skill DevelopmentForum ocusing on the area.

Ministry/Department/ OrganisationPresent train-ing capacity(lakhs)

Projected num-ber o trainedpersons by 2022

National Skill Development Corporation - 1500

Labour & Employment 12.00 1000

ourism 0.17 50

extiles 0.15 100

ransport 0.02 300

ribal Aairs 0.06

Rural Development 5.48 200

Women & Child Welare 17.50 100

Agriculture 19.81 200

HRD Higher Education 19.60 500

HRD Vocational Education 14.00

Dept o Heavy Industry 100

Urban Development 0.01 150

Department o Inormation echnology 1.37 100

Food Processing Industries 0.10 50

Construction Industry Development Council 4.64 200

Health & Family Welare 1.35 100

Micro Small Medium Enterprise 2.92 150

Social Justice & Empowerment 50

Overseas Indian Aairs 0.13 50

Finance-Insurance/Banking 100

Consumer Aairs 100

Chemicals & Fertilizers 0.19 50

Others (Power, Petroleum etc.) 150

99.50 5,300.00

Ministry extends 75%

support to companiesto build training

inrastructure and

placement acilities

or rural youth.

Exhibit 6:

Skill Development argets o Govt. Ministries/Departments

Exhibit 7:

Regulatory Structure

Cabinet

Government o India

PMO

National Council onSkill Development

Ministry o HRDNational Knowledge

CommissionMinistry o Labour

PlanningCommission

National SkillDevelopment

Coordination Board

Department oSchool Education &

Literacy

Department oHigher Education

Directorate Generalo Employment &

raining

Skill DevelopmentInitiative Scheme

ModularEmployability

Scheme

National Council or Vocational raining

IIs/ICs

National SkillDevelopmentCorporation

Ministry o Finance


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Participationo Private Players

Chapter 4

Some private organisations have been in the spaceor a long time. Noteworthy among them are Netturechnical raining Foundation which has 19 trainingcentres, and trains over 10,000 students annually andGedee echnical raining Institute in Coimbatore which

oers Certicate and Diploma Courses.

Lately, realising the enormity o the opportunity, a loto new initiatives have been oated. Some o them areIndiaSkills a JV between Manipal Learning and City& Guilds o UK; Centum Workskills; Hero Mindmine;IndiaCan a Pearson and Educomp initiative; CII-Edexcel an initiative or assessments, NII Yuva Jyoti,Future Sharp, etc. Certain international institutionsare also looking to enter India primarily throughpartnerships or JVs.

While the opportunity is undeniably attractive, thebiggest challenge is to put together a nancially viableand sustainable venture that can align business andsocial needs. Unlike a consumer products business, theraw material, production pipeline and consumer hereare all scattered. Since each o them is an independent

thinking human brain, it is not easy to get them oncommon ground, especially when the output is asdiverse as human skills.

Te changes happening at the structural level to make

business easier have their own lie-cycle, but the timehas arrived to take advantage o this opportunity andget a head-start. Tough the dynamics in the currentscenario will be very dierent and will evolve rapidly, theexpectation is that things will gradually get easier.

Te entrant to this business will have to work on gettingthe equation right with respect to the ollowing:

Financial:

Capital Expenditure:As an educational setup requires huge investment, this isthe biggest deterrent or most entrepreneurs with greatideas. Te solution can be either to lease spare capacityo existing educational institutions or to ranchise thebusiness, thereby reducing not only the investment

but also the operational micro-management requiredin running ones own setup. Tis also acilitates rapidscaling-up, which is the key to participating in thisbusiness.

Te decision also depends on whether the business islooking to establish itsel closer to the industrial hub

where economies o scale could be realised but wouldpose a challenge in recruiting the learner, versus goingto the learner through a spread-out model, in which caseit would be easier to reach the masses but would be anuphill task to place them and get them to migrate.

Operating Expenditure:Education is known to be a negative working capitalbusiness, primarily because the student pays beorethe education provider incurs expenditure on traininghim. In this case though, a air amount o pre-operative

work is required beore the training cycle sets in. Also,given the low price-points or this training, the deaulton training ee is unaordable. Even i the training isunded or subsidised by the Government in certaincases, the institute will need a robust process to maintainthe unds ow.

Operational:

Recruitment:Recruiting a student will be among the biggest initialchallenges. Te rst task would be to break the mindset

that work which requires manual skill s is ordinary. Tiswill need to be ollowed by counselling the student aboutthe utility o the training or a prosperous and productiveuture. Even in semi-urban areas o the country, we cansee people waiting or years in the hope o getting a desk

job. In such circumstances, it is essential or the businessto nd a model which inspires credibility and trust in

what the institute is delivering.

Connect with the Industry:In practice-oriented vocational training, the industryconnect is the strongest pillar. It can help not just savecapital expenditure in practical labs by working out an

apprenticeship/trainee arrangement with local industryparticipants but can also be a good source o part-timetrainers. As this culture is not so prevalent in the country,the entrepreneur looking at this area would have to beprepared to establish this connection.

Trainers:o highlight the obvious, trainers are central to a trainingbusiness. Sourcing a good trainer, deploying him at therequired location and creating an environment which isconducive to training is the third challenge. With thetraditional academic approach, it may be difcult tothink o a trainer being paid more than his counterpartin the industry, but in this case, it may well be a reality.

At the same time, the advantage in this stream oeducation is that it does not take years to create a trainerand part-time trainers sourced rom the industry canalso be deployed.


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Capacity utilisation:Education is similar to manuacturing in the s ense thatthe capacity not utilised is sunk cost. Tere will be manyactors which will come into play while schedulingtraining sessions availability o trainers especially part-timers, students working while getting trained, multiplestreams and batches running in parallel, ensuringoptimum utilisation between theory and practicalinrastructure and the works. With scarce resources,ensuring the highest churn will be the key to operationalefciency.

Content:Content or vocational training is highly contextual inthe sense that it varies in every country, every industry,

and every trade. Tereore, unlike other streams oeducation, this content cannot be easily replicated romother sources. Even i the content is taken rom anexisting source, a air amount o eort and money wouldhave to be invested in making it relevant or the desiredskills in a changed scenario.

Assessment:As the saying goes, Te proo o the pudding is in theeating; the same way to recruit rom the institute, everyindustry needs to know the relevance and level o skillsimparted. Te institute needs to devise an independent,impartial skills-assessment mechanism which accurately

Te diversity and the width in the eld allow variousdierent methods o operations. Unlike other businesses,this business will have three broad revenue streams:

Business to Consumer (B2C): For industries whichhave a high aspiration value where the student would be

willing to invest in his/her own education.

E.g. Grooming, hospitality, healthcare, travel andtourism

Business to Business (B2B): For industries with a largeand urgent requirement o manpower and where theemployers would be willing to pay or training ratherthan wait or students to wake up to the opportunity.Tis will also be true or industries where the studentdoes not have the ability to pay.

E.g. IeS, retail, construction, ood processing.

Business to Government (B2G): Core industries whichdo not have a high aspiration value and the labour orceemployed would not have the ability to pay.

E.g. Power, mining, textiles

Centre FinancialsVocational training is a broad area spanning multipleindustries, course categories, training methodologies,operating structures and student proles. While puttingdown nancials o the business is a risky proposition inthe absence o a detailed operating model which would

vary in every single case, we shall attempt to put anindicative P&L on a base case scenario.

reects the skill level o the learner. Absence o a ail-proo mechanism here can prove to be unsuccessul ininspiring the recruiting industry, making the businessunsustainable in the long run.

Placements:Placements are the ultimate benchmark or an institutessuccess. It is debatable whether it should be the samecase with higher education institutions, where theocus must be on academic excellence and rigour. Butin case o vocational training, where the sole objectiveo its existence is to provide employability and aproductive uture, the relevance o placements cannotbe over-emphasised. A robust and relevant placementmechanism, which succeeds in satisying the recruiting

industry as well as the student, will be the ultimate testo the business.

Many innovations are taking place in order to builda successul vocational training business model.Increasingly, training companies are exploring waysto source students, train them and place them in theindustry, thereby subsidising training costs throughrecruitment commissions. Also, gram panchayatsand other locally inuential organisations and NGOsare being tapped into by organisations to generateacceptability o their training.

Tere are a ew givens in the entire story:Te scale o the opportunity is unparalleled and there is space orseveral players operating simultaneously; the ecosystem will evolveover a period o time and an eort has begun in that direction;

many players are working on various models and it will be sometime beore a model proves itsel; given a sustainable businessmodel, this can be a billion-dollar opportunity.

Business ModelsChapter 5

Assumptions

No. o students trained per annum(600 per quarter)

2,400

Average Fee (INR) 18,000

No. batches in a day 2

No. o students at any point 300

Area required per student (Sq. t.) 80

otal area required (Sq. t.) 24,000

Rent, utilities & maintenance (per sq. t. permonth)

35

Student-trainer ratio 01:12

No. o trainers 25

Indicative P&L(All gures in INR)

Annual revenue 4,32,00,000

Expenses

Salary trainers 60,00,000

Salary - administration sta 24,00,000

Content & course material 34,56,000

echnology 12,00,000

Sales & Marketing 9,60,000

Annual rent, uti li ties & maintenance 1 ,00,80,000

Consumables 12,00,000

raining cost 2,50,000

Placement cost 12,00,000

Miscellaneous 43,20,000

3,10,66,000

EBIDA 1,21,34,000

EBIDA% 28%


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Some trends are already visible and every serious pl ayerwill have to subscribe to them to varying degrees in orderto succeed:

Services oriented tradeswill be more popular as theyrequire limited investment in training set-up, are likelyto experience robust demand rom the industry and canbe replicated easily across various centres.

Trainers and Contentwill be the biggest dierentiators.Relevance o the content and competency o the trainersin delivering the same will translate into the qualityo students provided to the industry. Organisations

will make attempts to use technology extensively inorder to bring in consistency and optimisation o thedelivery cost. Large investment o human and nancialresources will be made in rain the rainer programs.New algorithms will be developed to optimise capacityutilisation especially or businesses training or multipleindustries and trades.

Foreign partnershipswill be the norm. A lot o westerncountries have a head-start and are decades ahead o us inrealising the value o vocational training. We already seesuch partnerships being orged to get access to relevantcontent, assessment capability and training capability.

Another actor is a positive rub-o on the brand anda possibly better perception o the institutes pedigree.

We will see key partnerships being orged rom variouscountries including Western Europe, Ireland, Australia,USA, Britain, Switzerland, etc. Some prospects mayalso come in rom China, Hong Kong, aiwan andSingapore. Te key actor would be relevance o thecontent and the experience in training thousands ostudents in a multi-centre model.

Multi-centre network will be the way to prolierate.Most players would expand through ranchising toreduce their investment as well as to take advantage othe ranchisees local connections or student sourcingand placements. Tere may be multiple tiers and ormats

o the centre adopted to suit the requirement o specicmarkets. Also, the centres will oer trade relevant toeach market thereore bringing in a certain level oheterogeneity in operations.

Objective assessment will be the cornerstone o aninstitutes operations. While some institutions maytie-up with assessment companies o repute to do theassessments or them, there is a possibility o someinstitutions oating a separate assessment arm as anindependent business.

Strong linkages with the industry will be imperative.Tis will be important to ensure that the content is inkeeping with industry expectation at all times. Also

placements can be assured only by working closely withthe industry participants. Tereore, placement tie-ups

will be ormed both at national as well as local level. Alliances will also be in the Hire-rain-Place modewhich will be a win-win or both the institute as well asthe industry.

Placementswill be central to the business. Te marketwill be very sensitive to the outcome which invariably isto get the desired job at the end o the course. Te job

will have to be at an appreciable premium as comparedto the one the student would have gotten without thecourse and the qualication. Tere would be little scope

o certicate peddling.

Training for export will be a lucrative businessexpansion. With western countries coming undersevere strain due to ageing manpower issues, countriesare expected to be liberal with immigration o skilledpersonnel. Tere may be businesses set-up solely to caterto this segment. Currently, people go to a host country,get trained there and settle down. Te new model mayallow or people to be trained beore they legally moveto a oreign destination or employment. Globally validcertications will aid such movements.

Manufacturing oriented tradesare investment heavy.Tereore, manuacturing oriented training set-ups willbe developed as large campuses close to manuacturinghubs.

echnopak believes there are multiple models by whichthis opportunity can be exploited and it simply needssmart management o resources and partnering withthe right agencies to make it successul. Some o thesemodels ocus on the short-term and can break even inless than a year, but that might be able to address onlyone or two industries and might not develop into abillion-dollar business. While there are a ew businessmodels which can achieve large-scale numbers, those

would have a higher gestation period.

Te question is: How manyentrepreneurs are willing tocapitalise on the opportunityand wait or three yearsto break even? Tere arecountless thoughts andideas; its time to translatethem into action!


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About

echnopakIndias leading management consulting rm with more than 20 years o experience in working with organizationsacross consumer goods and services.

Founded on the principle o concept to commissioning, we partner our clients to identiy their maximum-valueopportunities, provide solutions to their key challenges and help them create a robust and high growth business models.

We have the ability to be the strategic advisors with customized solution during the ideation phase, implementationguide through start-up and a trusted advisor overall.

Drawing rom the extensive experience o 200+ proessionals, echnopak ocuses on six major divisions, which areFashion & extile, Retail & Consumer Goods, Healthcare, Education, Food & Agriculture and Leisure & ourism.

Our key services are:

Business Strategy.Assistance in developing value creating strategies based on consumer insights, competition mapping,international benchmarking and client capabilities.

Start-Up Assistance.: Leveraging operations and industry expertise to commission the concept on turnkey basis.

Perormance Enhancement.Operations, industry & management o change expertise to enhance the perormanceand value o client operations and businesses.

Capital Advisory.Supporting business strategy and execution with comprehensive capital advisory in our industrieso ocus.

Consumer Insights.Holistic consumer & shopper understanding applied to oer implementable business solutions.


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4th Floor, Tower A, Building 8, DLF Cyber City, Phase II, Gurgaon 122 002 (National Capital Region of Delhi)

T: +91-124-454 1111, F: +91-124-454 1198

Technopak Advisors Pvt. Ltd.

www.technopak.com

Rajesh GopalAssociate Vice President, Education

[email protected]

T: +91-8826028822

Kapil Gaba

Senior Consultant, [email protected]

T: +91-9818244907

For further dialogue, please contact:

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