Realising the demographic dividend

Vocational Education and Training Initiatives in India

Education

www.technopak.com
a quar terly repor t by technopak | Outlook 2011

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Authors: Rajesh Gopal, Associate Vice President I rajesh.gopal@technopak.com I +91-8826028822 Kapil Gaba, Senior Consultant I kapil.gaba@technopak.com I +91-9818244907 Design & Development Bharat Kaushik Design Manager I bharat.kaushik@technopak.com I +91-9811661493 Arvind Sundriyal, Senior Designer I arvind.sundriyal@technopak.com I +91-9910493934

OVERVIEW

09 12

PARTICIPATION OF PRIVATE PLAYERS

03 05 07

FOR-PROFIT VOCATIONAL EDUCATION AND TRAINING

BUSINESS MODELS

PRODUCTIVITY THE BIGGEST DRIVER

ABOUT TECHNOPAK

14

GOVERNMENT ROLE AND INITIATIVES

Outlook October, 2011 | Realising the demographic dividend

Overview
The education sector in India is presently at a point of inflection. There are rapid and defining changes occurring across the various educational segments, be it K12, Higher Education or Vocational Training. The government is supporting multiple initiatives as the private investors seek to resolve issues of access and formats. This has in turn given rise to challenges around affordability and accountability which have to be dealt with in order to catch up with the gap in capacity. Key factors influencing Indias increasing education appetite are: Demographic Advantage More than 50% of the Indian population is under the age of 25, this leads to increased demand for quality higher education and a skilled workforce. Increasing Affordability High income households (income more than US$ 10,500) are expected to increase from 5mn to 14mn by 2018 resulting in higher affordability. This will propel awareness towards education as a priority and an essential tool for career growth.
Exhibit 1:

Knowledge led Economy India, once considered an agrarian economy, is now dominated by the services sector. The share of services has increased from 31% in 1991 to 55% in 2010. This increase in the services sector has led to a steady increase in the demand for an educated skilled workforce. Increased Participation of Women in the Workforce A large young working population with a median age of 25 years, nuclear families in urban areas, along with emerging job opportunities in the services sector driven economy have led to an increase in the number of working women in India. The population of working women is estimated to be more than 25% by 2015. New Employment Avenues Globalization has led to the increase in newer employment avenues. Industries such as outsourcing (KPO, LPO), legal, retail, aviation, animation, healthcare, supply chain & logistics, have increased employment opportunities, and the demand for highly skilled manpower.

Since liberalization, capacity in the education sector has largely been expanded in the higher education and K12 segments. The result is marginally improved literacy levels though the exercise has not made a significant impact on employability. If the current momentum continues, a shift in population towards higher level of education will soon be experienced. Some impetus from the government and increased private sector participation can take it further, but still the population capable of contributing at the knowledge level will stay relatively low. Therefore a large part of the employable and willing population is likely to be engaged in skill intensive areas. And it will require breakthrough involvement by the government as well as the private sector to ensure that these masses are skilled to meet the requirements of the employing sectors. The Union budget 2011 has allocated Rs. 52,000 cr. for the education sector which is 24% more than the previous year. In addition the government has been fairly liberal in allowing private sector to invest in the sector within the existing regulatory framework. All this has made the education sector one of the most lucrative opportunities. While the emphasis is on all the segments of the education i.e. K12, higher education and ancillary services, vocational training looks the most promising as it develops. The biggest challenge for the for-profit vocational education and training sector is to make Indian youth employable and productive. In this inaugural issue of Technopaks Education Outlook, we focus on Vocational Education and Training which will see tremendous growth in the next few years, provided the participants in the sector are able to address a few challenges that are documented here.

2011 Level of Education Illiterate Literate Literate but no formal schooling School - Up to 5th standard School - Up to 10th standard School - Up to 12th standard Some college but not graduate Gradute Post Graduate Total %age 35% 65% 2% 33% 15% 7% 2% 5% 1% 100% Est. population (mn.) 424 787 24 399 182 85 24 61 12 1210 33% 67% 2% 35% 15% 7% 2% 5% 1%

2015 Normal Course %age Est. population (mn.) 425 846 25 440 190 90 25 63 13 1271

2015 Accelerated Course %age 33% 67% 2% 33% 16% 8% 2% 6% 1% 100% Est. population (mn.) 415 856 22 421 207 98 22 72 14 1271

100%

Outlook October, 2011 | Realising the demographic dividend

While schooling and higher education have their own challenges to deal with, the trickiest challenge lies in vocationally equipping the masses realistic estimates peg that number at 60 million people over the next 5 years. The magnitude of the challenge is well documented and accepted. The government has focused its attention and has announced a slew of measures in this context which include setting up ITIs, inviting private participation through their adoption scheme and through ITCs, the Modular Employability Scheme, National Rural Livelihood Mission, etc. However, most of these have not yielded expected results.

VeT Market Size Private Market Size, US$ bn (2010) Government Spend, US$ bn No. of Institutions Growth Rate (Private Market) Regulation 1.9 3.2 ~11,000 public, ~4,000 private 18% Not Regulated

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

For-Profit Vocational Education and Training

Most sectors of the economy are registering impressive growth, inciting speculation that India will be the worlds fastest growing economy in the near future. The idea of a prosperous India going forward is based on the premise of a favorable population demographic. Given the ageing population in most other developed economies, and with median age here at 26 years, India is looking to be an exporter of skilled manpower. Even within the country, 11-13 million people are expected to look for employment opportunities every year for the next decade. However employability of the population is an issue. A quick look at Exhibit 2 below gives an insight into the challenge or the opportunity, whichever way you choose to see it in making this population productive and employable.
Exhibit 2:

Chapter 1

Exhibit 3:

80% of the skill development market is at basic level Proportion and number of skilled workforce requirement in key industries between FY2008 -22E
Proportion (%) Industry/Service Auto and auto Components Banking, financial services and insurance Building, construction and real state Chemicals and pharmaceuticals Education and skill Development Electronics and IT software Food processing Furniture and Furnishings Gems and Jewellery IT and ITES Industry leather Media and entertainment Organized retail Others (including healthcare) Textiles and spinning Tourism Transportation, logistics, warehousing and packaging Unorganized Sector Total/ Average Annual numbers Level 1 50 20 81 23 20 20 81 80 75 89 20 52 60 86 40 20 90 63 Level 2 25 40 15 28 30 26 10 12 5 50 4 30 13 20 11 30 40 5 18 Level 3 20 30 4 45 45 50 9 7 19 40 6 45 32 15 3 20 25 3 14 Level 4 5 10 2 6 5 5 2 1 2 10 1 5 5 5 1 10 15 2 5 Level 1 17.5 0.9 39.2 0.4 1.7 0.6 7.5 2.7 3.4 4.1 0.6 8.9 10.1 3.1 7.1 8.2 91.8 207.9 13.9 Number (mn) Level 2 8.8 1.7 7.1 0.5 2.6 0.8 0.9 0.4 0.2 2.7 0.2 0.9 2.2 3.4 0.4 5.3 16.4 5.1 59.5 4 Level 3 7 1.3 1.7 0.8 3.9 1.6 0.8 0.2 0.9 2.1 0.3 1.3 5.5 2.5 0.1 3.5 10.3 3.1 46.9 3.1 Level 4 1.8 0.4 0.7 0.1 0.4 0.1 0.1 0 0.1 0.5 0 0.1 0.8 0.8 0 1.8 6.2 2 16.2 1.1 Total 35 4.3 48.7 1.9 8.7 3.2 9.3 3.4 4.6 5.3 4.6 3 17.3 16.8 3.6 17.7 41.1 102 330.5 22

Indias Population: Age and Employability

Indias Population (2011) 1.21 billion Indias Population (2011) 1.27 billion 60+ yrs 89 mn Not Working 203 mn 0- 14 yrs 381 mn 15- 60 yrs 798 mn 60+ yrs 99 mn

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

Exhibit 4:

Current Public VeT Infrastructure

Vocational Training Centres ~ 11,000 ITI: 2133 Polytechnics: ~3,000 ITCs: 5,906 No. of students: 2.5 mn. Annual Intake: 1.8 mn. Additional requirement: 40 mn. seats

0- 14 yrs 376 mn Employed 461 mn Trained 46 mn

15- 60 yrs 744 mn Unemployed 80 mn 90% need VeT Need Retraining 415 mn

Employed 520 mn 90% need VeT Need Training 60 mn

Unemployed / Not working 278 mn Need Retraining 400 mn

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

Outlook October, 2011 | Realising the demographic dividend

Productivity: the biggest driver

With low wages and liberty to add more people to complete a job faster without incurring a huge cost, Indian employers did not focus on productivity at the lowest level. Today rising wages, increasing pressure on resources including on the space occupied by additional workers and the managerial resources needed to deal with them, has put the productivity of each worker under focus. Since the increase in mechanisation, skills and productive use of time has also become critical for business operations. Though Indian labour productivity has shown appreciable increment over the last 6-7 years, it still has a large scope for improvement.
Exhibit 5:

Chapter 2

the manual labour expected on shop floors is no match for the lure of a desk job in air-conditioned environs. The result is that the job market is flooded with barely employable graduates coming out of higher education institutes with unsatisfactory academic quality. Appreciating the importance of training: The learner seldom understands the value that the training adds to his productivity or future growth opportunities. In the near term, when he does not see his training fetching him a premium in the job market, he is not inclined to consider it. Economics of migration: Vocational training requires the learner to migrate to an industrial hub, usually away from the native place where his skills would be in demand. The economics of such a move, given the cost of living in an industrial hub, do not work out favourably. Paying for training: Historically, the training for vocational streams has been through the apprenticeship or on-the-job training method, in which the learner gets a stipend. Therefore the learner is generally averse to the idea of paying for training which will get him similar employment opportunities. In most cases, the learner comes from an economic background where he cannot afford the cost of training. Distrust: Most training organisations, especially in the private sector, are not local and therefore not known to potential trainees. Based on past experience with institutes that have made similar, empty promises of employment, the learner views even a genuine organisation with suspicion. Absence of credible, nationally known training providers does not help matters.

Recruiters Considerations:

The industry on its part has its own issues to consider: Little value or premium for trained person: The industry does not differentiate whether an employee has undergone formal training or learned skills on the job. Superior knowledge of tools, techniques, or better productivity do not fetch a premium. Due to lack of financial incentive after training, the individual does not consider formal training. Concerns regarding relevance of prior training: The skills that the person comes with may not be a perfect match with the organisations requirements. In such a scenario, the organisation has to invest time in teaching him the necessary skills. Just-in-time hiring: Most organisations do not maintain a bench of vocationally trained manpower. The hiring is done just in time and usually on a contract basis. The industry therefore does not have much incentive to invest in prior training. Crunched for time, the knee jerk reaction to hire anyone whether trained or not is the only recourse. In-house training set-ups: Given the insufficient infrastructure for industry-relevant vocational training, most organisations had invested in their in-house training set-ups on a need basis. So any gaps in training are met in-house. Importing manpower: For immediate or critical requirements, organisations are open to importing experienced manpower from countries like China and the Gulf. Even though this manpower costs more, it saves organisations the long gestation period and commitment required to train manpower within the country.

Training Providers Considerations:

The third party in the equation, training companies are looking for their own answers to: Trainers: Lack of quality trainers, which is the biggest cost in a training set-up, directly impacts the bottomline. A person who is trained enough to do the job himself, chooses to go for the occupation, for want of better prospects, rather than train. Price points: A majority of students opting for vocational jobs come from the economically lower strata. Also, the jobs are of a routine nature and therefore are not economically attractive for a fresh pass-out. This stretches the possibility of recovering the costs involved in hiring trainers, developing content, travel and logistics of trainers and other administrative expenses, leave alone charging a premium. Capex: Setting up any educational institute is capital intensive and it is more so in case of practice oriented training. The lower price-points that the training company can command compound the problem, increasing the break-even period. Industry linkage: A lot of investment can be avoided if the training companies and the industry can collaborate to provide apprenticeship to students. While efforts to facilitate this are being made at various levels, there is still a long way to go before this arrangement becomes a norm. The reason that the three spokes of the wheel do not meet is the lack of an ecosystem where vocational training is intrinsic to the workforce development of the country.

GDP per person employed per hour (USD)

60 40 20
Singapore Hong Kong Japan Indonesia Philippines USA Australia UK Germany India

Source: Annual Report 2011, Ministry of Labor

In resolving this challenge there are some systemic issues that each of the participants in the sector viz. the student, the recruiter and trainer faces:

Students considerations:

The debate starts as a result of unwillingness of students and their parents to consider blue-collared vocations for employment. There are several factors leading up to the situation: Cultural bias: Culturally, there has been a deeprooted bias against manual labour in favour of work that requires intellectual expertise. In modern times, 5

Outlook October, 2011 | Realising the demographic dividend

Government Role and Initiatives

The Government has lately realised the enormity of the challenge and endeavours to accomplish the same through various initiatives. Under the Prime Ministers National Skill Development Mission, the Government has launched an initiative to train 500 million people by the year 2022. The National Skill Development Corporation (NSDC) has been created in order to streamline identification and mapping of skills requirements, facilitate private participation through grants, viability gap funding, etc. NSDCs charter also includes setting up of Sector Skills Councils for high-growth sectors which will provide a structure to skills required in those sectors and their assessment methodology. On the basis of these structures, the skill requirement can be projected and the manpower can be trained. This is of utmost importance as the Government cannot set up and operate the entire infrastructure and machinery required in this space; and public-private participation is imperative. In addition to facilitating capacity building, the Sector Skills Councils will define the structure, levels and benchmarks of training for each industry. This will help in consistency of imparted training, ease of employment and portability of skills. Ministry of Rural Development has been running the Swarnajayanti Swarozgar Yojana under which 2.5 lakh below-poverty-line (BPL) youth have been trained and placed under PPP model. Under the scheme, the Ministry extends 75% support to companies to build training infrastructure and placement facilities for rural youth. The initiative has now been rechristened as National Rural Livelihood Mission and the MoRD is planning to allocate Rs. 15,000 crores to train 1 crore BPL youth during the twelfth 5-year plan period. This model after proving its efficacy will become accepted and many private players can be expected to join in the initiative. 7 Another initiative currently in its nascent stage is the proposal to set up the National Vocational Qualification Framework, which seeks to introduce vocational training right at the school level. This model is followed by most countries which have a robust vocational training infrastructure and acceptability of vocational training skills by the masses. Various organisations in India, after realizing that such training is critical to Indias further growth, have come up with initiatives for skill development. While CII has a Skills Development Initiative, the IITs have a Skills India 2020 initiative and FICCI has a Skill Development Forum focusing on the area.

Chapter 3

Exhibit 6:

Skill Development Targets of Govt. Ministries/Departments

Ministry/Department/ Organisation National Skill Development Corporation Labour & Employment Tourism Textiles Transport Tribal Affairs Rural Development Women & Child Welfare Agriculture HRD Higher Education HRD Vocational Education Dept of Heavy Industry Urban Development Department of Information Technology Food Processing Industries Construction Industry Development Council Health & Family Welfare Micro Small Medium Enterprise Social Justice & Empowerment Overseas Indian Affairs Finance-Insurance/Banking Consumer Affairs Chemicals & Fertilizers Others (Power, Petroleum etc.) 0.19 99.50
Exhibit 7:

Present training capacity (lakhs) 12.00 0.17 0.15 0.02 0.06 5.48 17.50 19.81 19.60 14.00

Projected number of trained persons by 2022 1500 1000 50 100 300 200 100 200 500 100

0.01 1.37 0.10 4.64 1.35 2.92 0.13

150 100 50 200 100 150 50 50 100 100 50 150 5,300.00

Ministry extends 75% support to companies to build training infrastructure and placement facilities for rural youth.

Regulatory Structure
Government of India

PMO

Cabinet

National Council on Skill Development

National Knowledge Commission

Planning Commission National Skill Development Coordination Board

Ministry of HRD Department of School Education & Literacy Department of Higher Education

Ministry of Labour Directorate General of Employment & Training Skill Development Initiative Scheme Modular Employability Scheme

Ministry of Finance National Skill Development Corporation National Council for Vocational Training

ITIs/ITCs

Outlook October, 2011 | Realising the demographic dividend

Chapter 4

Participation of Private Players

Some private organisations have been in the space for a long time. Noteworthy among them are Nettur Technical Training Foundation which has 19 training centres, and trains over 10,000 students annually and Gedee Technical Training Institute in Coimbatore which offers Certificate and Diploma Courses. Lately, realising the enormity of the opportunity, a lot of new initiatives have been floated. Some of them are IndiaSkills a JV between Manipal Learning and City & Guilds of UK; Centum Workskills; Hero Mindmine; IndiaCan a Pearson and Educomp initiative; CIIEdexcel an initiative for assessments, NIIT Yuva Jyoti, Future Sharp, etc. Certain international institutions are also looking to enter India primarily through partnerships or JVs. While the opportunity is undeniably attractive, the biggest challenge is to put together a financially viable and sustainable venture that can align business and social needs. Unlike a consumer products business, the raw material, production pipeline and consumer here are all scattered. Since each of them is an independent 9 thinking human brain, it is not easy to get them on common ground, especially when the output is as diverse as human skills. The changes happening at the structural level to make business easier have their own life-cycle, but the time has arrived to take advantage of this opportunity and get a head-start. Though the dynamics in the current scenario will be very different and will evolve rapidly, the expectation is that things will gradually get easier. The entrant to this business will have to work on getting the equation right with respect to the following:

but also the operational micro-management required in running ones own setup. This also facilitates rapid scaling-up, which is the key to participating in this business. The decision also depends on whether the business is looking to establish itself closer to the industrial hub where economies of scale could be realised but would pose a challenge in recruiting the learner, versus going to the learner through a spread-out model, in which case it would be easier to reach the masses but would be an uphill task to place them and get them to migrate. Operating Expenditure: Education is known to be a negative working capital business, primarily because the student pays before the education provider incurs expenditure on training him. In this case though, a fair amount of pre-operative work is required before the training cycle sets in. Also, given the low price-points for this training, the default on training fee is unaffordable. Even if the training is funded or subsidised by the Government in certain cases, the institute will need a robust process to maintain the funds flow.

that work which requires manual skills is ordinary. This will need to be followed by counselling the student about the utility of the training for a prosperous and productive future. Even in semi-urban areas of the country, we can see people waiting for years in the hope of getting a desk job. In such circumstances, it is essential for the business to find a model which inspires credibility and trust in what the institute is delivering. Connect with the Industry: In practice-oriented vocational training, the industry connect is the strongest pillar. It can help not just save capital expenditure in practical labs by working out an apprenticeship/trainee arrangement with local industry participants but can also be a good source of part-time trainers. As this culture is not so prevalent in the country, the entrepreneur looking at this area would have to be prepared to establish this connection. Trainers: To highlight the obvious, trainers are central to a training business. Sourcing a good trainer, deploying him at the required location and creating an environment which is conducive to training is the third challenge. With the traditional academic approach, it may be difficult to think of a trainer being paid more than his counterpart in the industry, but in this case, it may well be a reality. At the same time, the advantage in this stream of education is that it does not take years to create a trainer and part-time trainers sourced from the industry can also be deployed. 10

Financial:
Capital Expenditure: As an educational setup requires huge investment, this is the biggest deterrent for most entrepreneurs with great ideas. The solution can be either to lease spare capacity of existing educational institutions or to franchise the business, thereby reducing not only the investment

Operational:
Recruitment: Recruiting a student will be among the biggest initial challenges. The first task would be to break the mindset

Outlook October, 2011 | Realising the demographic dividend

Capacity utilisation: Education is similar to manufacturing in the sense that the capacity not utilised is sunk cost. There will be many factors which will come into play while scheduling training sessions availability of trainers especially parttimers, students working while getting trained, multiple streams and batches running in parallel, ensuring optimum utilisation between theory and practical infrastructure and the works. With scarce resources, ensuring the highest churn will be the key to operational efficiency. Content: Content for vocational training is highly contextual in the sense that it varies in every country, every industry, and every trade. Therefore, unlike other streams of education, this content cannot be easily replicated from other sources. Even if the content is taken from an existing source, a fair amount of effort and money would have to be invested in making it relevant for the desired skills in a changed scenario. Assessment: As the saying goes, The proof of the pudding is in the eating; the same way to recruit from the institute, every industry needs to know the relevance and level of skills imparted. The institute needs to devise an independent, impartial skills-assessment mechanism which accurately

reflects the skill level of the learner. Absence of a failproof mechanism here can prove to be unsuccessful in inspiring the recruiting industry, making the business unsustainable in the long run. Placements: Placements are the ultimate benchmark for an institutes success. It is debatable whether it should be the same case with higher education institutions, where the focus must be on academic excellence and rigour. But in case of vocational training, where the sole objective of its existence is to provide employability and a productive future, the relevance of placements cannot be over-emphasised. A robust and relevant placement mechanism, which succeeds in satisfying the recruiting industry as well as the student, will be the ultimate test of the business. Many innovations are taking place in order to build a successful vocational training business model. Increasingly, training companies are exploring ways to source students, train them and place them in the industry, thereby subsidising training costs through recruitment commissions. Also, gram panchayats and other locally influential organisations and NGOs are being tapped into by organisations to generate acceptability of their training.

Business Models
The diversity and the width in the field allow various different methods of operations. Unlike other businesses, this business will have three broad revenue streams: Business to Consumer (B2C): For industries which have a high aspiration value where the student would be willing to invest in his/her own education. E.g. Grooming, hospitality, healthcare, travel and tourism Business to Business (B2B): For industries with a large and urgent requirement of manpower and where the employers would be willing to pay for training rather than wait for students to wake up to the opportunity. This will also be true for industries where the student does not have the ability to pay. E.g. ITeS, retail, construction, food processing. Business to Government (B2G): Core industries which do not have a high aspiration value and the labour force employed would not have the ability to pay. E.g. Power, mining, textiles
Assumptions No. of students trained per annum (600 per quarter) Average Fee (INR) No. batches in a day No. of students at any point Area required per student (Sq. ft.) Total area required (Sq. ft.) Rent, utilities & maintenance (per sq. ft. per month) Student-trainer ratio No. of trainers Indicative P&L 2,400 18,000 2 300 80 24,000 35 01:12 25

Chapter 5

(All figures in INR)

Annual revenue Expenses Salary trainers Salary - administration staff Content & course material Technology Sales & Marketing Annual rent, utilities & maintenance Consumables Training cost Placement cost Miscellaneous EBITDA EBITDA%

4,32,00,000 60,00,000 24,00,000 34,56,000 12,00,000 9,60,000 1,00,80,000 12,00,000 2,50,000 12,00,000 43,20,000 3,10,66,000 1,21,34,000 28%

There are a few givens in the entire story:

The scale of the opportunity is unparalleled and there is space for several players operating simultaneously; the ecosystem will evolve over a period of time and an effort has begun in that direction; many players are working on various models and it will be some time before a model proves itself; given a sustainable business model, this can be a billion-dollar opportunity.

Centre Financials

Vocational training is a broad area spanning multiple industries, course categories, training methodologies, operating structures and student profiles. While putting down financials of the business is a risky proposition in the absence of a detailed operating model which would vary in every single case, we shall attempt to put an indicative P&L on a base case scenario.

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Outlook October, 2011 | Realising the demographic dividend

Some trends are already visible and every serious player will have to subscribe to them to varying degrees in order to succeed: Services oriented trades will be more popular as they require limited investment in training set-up, are likely to experience robust demand from the industry and can be replicated easily across various centres. Trainers and Content will be the biggest differentiators. Relevance of the content and competency of the trainers in delivering the same will translate into the quality of students provided to the industry. Organisations will make attempts to use technology extensively in order to bring in consistency and optimisation of the delivery cost. Large investment of human and financial resources will be made in Train the Trainer programs. New algorithms will be developed to optimise capacity utilisation especially for businesses training for multiple industries and trades. Foreign partnerships will be the norm. A lot of western countries have a head-start and are decades ahead of us in realising the value of vocational training. We already see such partnerships being forged to get access to relevant content, assessment capability and training capability. Another factor is a positive rub-off on the brand and a possibly better perception of the institutes pedigree.

We will see key partnerships being forged from various countries including Western Europe, Ireland, Australia, USA, Britain, Switzerland, etc. Some prospects may also come in from China, Hong Kong, Taiwan and Singapore. The key factor would be relevance of the content and the experience in training thousands of students in a multi-centre model. Multi-centre network will be the way to proliferate. Most players would expand through franchising to reduce their investment as well as to take advantage of the franchisees local connections for student sourcing and placements. There may be multiple tiers and formats of the centre adopted to suit the requirement of specific markets. Also, the centres will offer trade relevant to each market therefore bringing in a certain level of heterogeneity in operations. Objective assessment will be the cornerstone of an institutes operations. While some institutions may tie-up with assessment companies of repute to do the assessments for them, there is a possibility of some institutions floating a separate assessment arm as an independent business. Strong linkages with the industry will be imperative. This will be important to ensure that the content is in keeping with industry expectation at all times. Also

placements can be assured only by working closely with the industry participants. Therefore, placement tie-ups will be formed both at national as well as local level. Alliances will also be in the Hire-Train-Place mode which will be a win-win for both the institute as well as the industry. Placements will be central to the business. The market will be very sensitive to the outcome which invariably is to get the desired job at the end of the course. The job will have to be at an appreciable premium as compared to the one the student would have gotten without the course and the qualification. There would be little scope of certificate peddling. Training for export will be a lucrative business expansion. With western countries coming under severe strain due to ageing manpower issues, countries are expected to be liberal with immigration of skilled personnel. There may be businesses set-up solely to cater to this segment. Currently, people go to a host country, get trained there and settle down. The new model may allow for people to be trained before they legally move to a foreign destination for employment. Globally valid certifications will aid such movements. Manufacturing oriented trades are investment heavy. Therefore, manufacturing oriented training set-ups will be developed as large campuses close to manufacturing hubs. 14

Technopak believes there are multiple models by which this opportunity can be exploited and it simply needs smart management of resources and partnering with the right agencies to make it successful. Some of these models focus on the short-term and can break even in less than a year, but that might be able to address only one or two industries and might not develop into a billion-dollar business. While there are a few business models which can achieve large-scale numbers, those would have a higher gestation period.

The question is: How many entrepreneurs are willing to capitalise on the opportunity and wait for three years to break even? There are countless thoughts and ideas; its time to translate them into action!

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About Technopak
Indias leading management consulting firm with more than 20 years of experience in working with organizations across consumer goods and services. Founded on the principle of concept to commissioning, we partner our clients to identify their maximum-value opportunities, 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, implementation guide through start-up and a trusted advisor overall. Drawing from the extensive experience of 200+ professionals, Technopak focuses on six major divisions, which are Fashion & Textile, Retail & Consumer Goods, Healthcare, Education, Food & Agriculture and Leisure & Tourism.

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. Performance Enhancement. Operations, industry & management of change expertise to enhance the performance and value of client operations and businesses. Capital Advisory. Supporting business strategy and execution with comprehensive capital advisory in our industries of focus. Consumer Insights. Holistic consumer & shopper understanding applied to offer implementable business solutions.

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For further dialogue, please contact: Associate Vice President, Education rajesh.gopal@technopak.com T: +91-8826028822

Rajesh Gopal

Senior Consultant, Education kapil.gaba@technopak.com T: +91-9818244907

Kapil Gaba

www.technopak.com

Technopak Advisors Pvt. Ltd.

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