To truly understand the implications of any concept, it really helps if we can quantify and project the ‘what if’ scenario. What will become of India as a knowledge powerhouse in the world of the future? What will be the value of India’s human capital, looking into the future? How important is education’s role in making it happen. Answering this in a quantitative manner is a forecast done by the World Bank.
India has a rich choice set in determining its future growth path. The graph alongside shows what India can achieve by the year 2020, based on different assumptions about its ability to use knowledge, even without any increase in the investment rate. Here, total factor productivity (TFP) is taken to be a proxy for a nation’s learning capability.
For all four projections, capital, labor, and human capital are assumed to grow at their 1991–2000 average annual growth rates for India- 5.41, 2.23, and 0.58 percent, respectively. For the growth-TFP decomposition to be more precise, labor force figures rather than total population are used as a measure of the amount of “labor” available for use as a factor of production in the Indian economy. According to World Bank databases, in 2001 India’s GDP (in 1995 U.S. dollars) was $495 billion and its population was 1.03 billion, of which only 461 million were in the labor force. As such, India’s GDP per capita in 2001 was approximately $480, whereas GDP per worker was around $1,070.
Projections 1, 2, 3, and 4 plot real gross domestic product (GDP) per worker (1995 U.S. dollars) for India assuming different TFP growth rates from 2002 to 2020. The curve to focus on is Projection 4. This is an optimistic scenario that is based on the actual TFP growth rate in Ireland in 1991–2000. Ireland is an example of a country that has been using knowledge effectively to enhance its growth. All things being equal, the projected GDP per worker for India in scenario 4 in 2020 is about 50 percent greater than in scenario 1. Knowledge can make a difference between poverty and wealth.
A 50% increase in GDP per worker! The power to transform a nation is right here. And from a business strategist and marketer’s point-of-view that turns into a huge opportunity for Education as a business sector. All the allied factors are in place:
a/ The population is set to be one of the youngest in the world: India’s median age for the population will be 30 years by 2025. There will be 994 million people in the working age group in India compared to 215 million in the US. So the market is there alive, growing and waiting to be schooled and trained.
b/ And the market’s attitude [the parents’] to education has always been positive amongst middle income homes in urban and semi-urban areas- education was always seen as the ticket to a better future. Today, that positive attitude has the backing of investment- 55% of India’s middle class homes SAVE for their children’s higher education. So they are starting to ‘put money where their mouth is’.
The time is very opportune for India to make its transition to the knowledge economy—an economy that creates, disseminates, and uses knowledge to enhance its growth and development. The knowledge economy is often mistaken to be only high-technology industries or information and communication technologies (ICTs). But we need to see the concept more broadly as to cover how any economy harnesses and uses new and existing knowledge to improve the productivity of agriculture, industry & services and increase overall welfare. In India, great potential exists for increasing productivity by shifting labor from low productivity and subsistence activities in agriculture, informal industry and informal service activities to more productive, modern sectors, as well as to new knowledge-based activities.
Undoubtedly, education’s market of the future is India. And institutions the world over and particularly North America need to beat a path to India. Consider some of these facts about what’s happening:
- Corporates are starting to invest in linkages with educational institutions to take advantage of the knowledge pool: IBM has partnered with India’s premier Engineering & Technology institution- IIT Bombay, to develop the next generation of mobile device interfaces. IBM has also linked up with NID- the National Institute of Design and the Indian School of Business for similar projects
- Universities from Europe, US and Canada are entering India. While UK universities are interested in science and technology, Canadian Universities have announced funding for a series of India specific initiatives, among them the Globalink Canada India Graduate Fellowship, to provide scholarships for 51 Indian students, worth US $3.5 million.
- UK’s London School of Economics and Science are entering India with a collaboration with the City School of Social and Management Sciences
- On bio informatics, the UK’s Nottingham Trent University is collaborating with the TN Welingkar Institute of Management Development and Research
- In the hospitality industry, Switzerland’s International Hotel Management Institute has joined hands with Kohinoor-IMI Khandala School of Hospitality Management.
- International and domestic players plan to invest over $100 million in India to start International schools
- Vocational training is a HUGE opportunity. Take for example, Centum Learning- 150 learning centres spread across 90 cities to train 12 million people by 2022
- Another example on vocational training, this time from a global major- Bharti-Walmart. The Indian collaboration of Walmart in the cash-and-carry, wholesale business has signed an MoU with the local state government of Punjab to set up a training facility to address the shortage of trained manpower for the cash-and-carry and retail sectors
- Learning software and digital content development to aid education is another huge related opportunity- at the higher end, private schools are ramping up the level of multi-media content to add to the classroom education. At the mass end the government is pledging over $2 billion on ICT education in schools and universities
Capping all this is the upbeat mood of Young India. There is that sense of India being at the cusp of an era which would take it onto the international stage. They know that their India and their world is going to see a phenomenal transformation from what it was for their parent’s generation and that, that world will be theirs. And they are ready to relentlessly pursue the needed education, to carry that world on their shoulders.