Can educational services be commercialised?

Feb 8 2010

By Dhrubajyoti Banik

With huge advent of private sector in Indian Education system, both in mainstream as well as non-mainstream education, one question that has arisen is whether education can be commercialized?

My thought on this has been that of a traditional revolutionary.

Let us first look at the Indian Education sector in last 60 years of independence. Till as late as 1990's, the mainstream education had extremely limited scope in terms of deciding a long term career.If you were a science student, you become a doctor or an engineer.If you are not then you become a CA for a commerce guy, or a PGT/TGT for a Arts student. Accordingly the glamour got attached to different courses. Generally the "brilliants" got into engineering or medical, the lesser mortals into other streams.

Accordingly there was a huge demand supply gap for proper knowledge required to cater for the entrance exams to go into the best of the colleges in the country. 5 IITs and 10 RECs was too less for more than 6 lakh science students writing their XIIth exams. The situation was grimmer if we look at Medical with premeir institutes like AIIMS offering only 60 UG seats on a All India Level.

However post 1990 and post LPG implementation by Dr. Manmohan Singh during his tenure as the finance minister, brought a plethora of options of career for students of any educational background. India was in huge need of people who can not only make roads or treat patients but also can sell, manage and lead in hitherto unusual areas.

The IT boom along with it, demanded not only software engineers, but also finance and economics guys who can act as the interface between the client and the engineer. We needed jack of all trades, master of "some". Even agriculture attracted attention of big corporates, and therefore along with capital investments came requirement of structured and planned means to seek return on that investment.

That resulted in huge change of mindset towards education system. For the first time not the expertise, but the expert got more value. It was not the field, but the performance which spoke more. Thus no field was less glamorous. If you can become an expert in "bungee jumping" even that can make your career.

However the change was fast and steady. The Government, though was instrumental in bringing the change, was suddenly found unable to keep up with the pace of the change. Most of the governmental organizations like schools and colleges did not have enough trained personnels or coaches to adapt to the innovations required to be with the change.

Here in private players came into play. Looking at the huge demand for a professional and branded approach, private players like the Goenkas, Birlas and Srirams invested in mainstream(and non-mainstream) education. They sought foreign help which helped in bringing experts like Kotler, Peter Senge or even Hawking and thus introduced new age learning systems. For the first time we were talking of application based learning which not only helped creating right individuals but also right jobs for them. Can you now imagine Harsh Bhogle as some database developer in some software company in Bengaluru?

However there still exists a huge gap between demand for professional learning and supply of the same.This has resulted in mushrooming of thousands of shady educational institutes with no credibility who just want to make money when the iron is hot.

Till education runs as a business where both the seller and the customer get their value, the demand supply curve remains sane and most of the time the seller can actually deliver consumer surplus. However as in any buying process, the customer has to believe in brands or has to do proper investigation about the seller, especially when the thing you are buying is as long term as your lifelong career.

The author is Chief Knowledge Expert at TIME Education Pvt Ltd. His area of expertise includes Organizational Design and Change Management. He is associated with training of MBA aspirants for the last ten years. He has studied in NIT Calicut, XLRI Jamshedpur and holds a PG Diploma in maths from Barkeley University. The author can answer your questions related to academics and careerasked through this website.

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Mr. Dhrubajyoti Banik's well written article "Can educational services be commercialised ?" dealt with an important contemporay concern.

It is not feasible for the state to fund and organise education at all levels. But the state must ideally shoulder the major share of responsibiliry for primary education and fundamental reserch.

The rest mostly has to go to private players for running on a business mode for sustenance overseen by apolitical socially responsible educational trusts generously funded by the Indusrties and even by the State with one of the mandates being to financially support meritorious pupils.

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SS's picture

Very thoughtful article -

Very thoughtful article - even though different countries in world have their own systems but most of them directly or indirectly follow the American System which is pretty much a normal business model of seller and buyer. I am not saying Indian system is not so good and American system is good but in India always the problem is - Govt wants to poke its nose into everything - even directly running businesses like Airlines, Hotels and generating losses of thousands of crores. As a country it has to decide its goals and go for them rather than dancing between Capitalistic and Socialistic models due to vote bank necessities. Too much Govt control never did much good for any country. Other day I read an article in ToI that no Indian University in Top 100 in world - that was a moment of a self realization of an always proud Indian.

Things will certainly change down the line due to the need of market economy.

IXA's picture

I hope you'll detail

Thanks for your insightful input. However, I hope you'll detail on the points you mentioned by taking some real life examples (in another post/article). That would help students to identify the places they should avoid

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Excellent inputs with deep

Excellent inputs with deep farsightedness. Its an accepted fact that the supply is not able to bridge the demand. But just supply is not essential to meet the demand. Educational institutes should impart quality syllabi and overall nurturing of incumbents rather doing brisk business and make money. Students and parents should do a thorough BG verification before zeroing on a particular institution.