Ed-Tech Opportunity in India May 2, 2013

Indian K-12 Education System Desperate need for innovative and scalable solutions

Source: DISE, 2011-12 Provisional; ASER 2012; NCERT Study; BCG Study

• Shortage of 1.5 mm teachers

• 90+% qualified candidates did not pass a teacher eligibility test

• 25% teacher absenteeism

1.3 mm Schools

8 mm Teachers

240 mm Students

• 2-3 grade levels behind by the end of primary education

• ~50% enrolled in high school

• Strong culture of post-school support from tutors

• 97+% gross enrolment ratio in primary schools

• Fragmented system with small average school size

• Government’s focus shifting towards learning outcomes

Public and Private Schools Large migration from public to private schools

Source: DISE, 2011-12 Provisional; ASER 2012; NCERT Study

Government Private

Student Penetration by school type 2012

33%

67%

• 50+% students in urban areas and 25% in rural areas go to private schools

• Migration from public to private schools at the rate of 1-2% points/year

• English medium schools expected to grow at 15% from 64,000 in 2011 to 127,000 in 2016

Government 80%

Private 20%

1.3 mm schools by type (in %) 2012

Government59%

Private 41%

Indian Education Market ICT/e-Learning expected to grow at CAGR of 70%

Source: Tata Strategic Management Group

Government64%

Private 36%

Growth in Private Education Market

$175 bn in 2015E $100 bn in 2011

Total Education Spend

Quality Student Learning Personalized with high engagement

1

Excellence in Teacher Education Scalable and high impact teacher training

2

Efficient School Management Systems Effective utilization of resources based on real-time data

3

Robust Accountability Systems Impact with sharper measurement

4

Ed-Tech Promise Change the way India learns, teaches and measures performance

India Education Technology Landscape Various models emerging in the ecosystem

Student Learning Learning Resources

Assessments Learning Management & Social Learning Systems

Teacher Training and Instruction

ICT Training ICT Tools

Collaborative Networks

Administration Student Information Systems

ERP for Schools

Devices Laptop, Tablet, Mobile, TV, Projector and Radio

Learning Approaches

Blended Learning

Open Educational Resources

System Accountability Data Portals

Enabling Environment

Mobile Phones India will be the third largest smart phone market in 2017

Source : TRAI, July 2012; IDC Worldwide, CSF Research

Emerging Adoption Models

• 3 minute audio English lessons and SMS quizzes in Bangladesh

• On-demand, mobile Math tutoring in South Africa

• Airtel provides educational content at daily subscription in India

• Mobilink-UNESCO program in Pakistan using mobiles to increase literacy skills

906 mm Total

Subscribers

$80 Entry-level

Smartphone

New education models emerging to leverage the large base of mobile users

8%

92%

46% 54%

Smartphone

Feature phones

Mobile phone sales (by units)

2012

228 mm

2017E

335 mn

Tablets Explosion expected with tablet prices coming down

Source : Research and Markets 2013; Frost and Suvillian; Cybermedia Research

Government Initiatives: Aakash • Android-based tablet, Aakash IV under

R&D

• Discounted bulk price of $50 for schools and colleges

• Exclusive marketplace for content & solutions

Adoption Models • Budget schools finding tablets less

expensive and more useful for learning

• Tablets bundled with LMS, content, and personalized learning tools

• Content aligned with school syllabus

• Hindi OS interface introduced

0.31 3

6

33

0

10

20

30

40

2011 2012 2013E 2016E

Sales (in mm)

Tablets will be the preferred education device in 5-7 years

Samsung 25%

Micromax 14%

Apple 9%

Others 52%

Market Landscape 2012

70 Total

Vendors

Connectivity Critical for adoption of education technology

Source : National Knowledge Network; Office of Public Information Infrastructure and Innovations; IMRB Research

Government Initiatives • $4.2 bn Optic Fiber project to connect

25,000 villages

• 980 of 1500 Higher Education Institutions connected under Knowledge Network. Next phase is K-12 schools

2012 2017 2020

15 mm

175 mm

600 mm

Broadband Penetration Target

Commercial Initiatives • Ubiquitous 4G roll-out in 2-3 years

• In absence of connectivity, content distribution through SD Cards, USB etc.

4.1 17.6

35.7

47.1

92.9

130.6

164.8

0

20

40

60

80

100

120

140

160

180

2009 2010 2011 2012 2013 2014E 2015E

Mobile Internet Users (in mm)

Quality Student Learning

B2B Schools High market potential with both government and private schools

Source: Industry discussions, World Bank Info Dev, CSF research and analysis * Only private schools. These estimates are based on our current understanding and the actual numbers may vary

Private Schools

• Highly fragmented ICT landscape

• ~20% penetration in addressable market of 100,000 schools

• Smart boards used more as a marketing tool than an educating tool

• Low-cost variants available

Government Schools

• ICT @ Schools Scheme launched to set up computer labs

• Hardware utilization is low

Hardware platform exists for new content creators

• Emerging market space with a large number of small size players

• High perception value of digital content

• Micro-scale content available in form of lesson, subject, grade etc.

• Use of many distribution channels, including USB drive, SD card, tablet etc.

• Use of telemarketing to drive sale conversion

B2C Content Strong demand for direct-to-student models

B2C Content Landscape

Cloud/Offline Providers Publishers bundling content • Largest online portal for K-12 in India

• 4 million registrations

• 100,000 paid customers

• 7500 videos, 3000 tests, 500 games and 100 experts

Source : Interaction with industry players, CSF analysis

Supplemental content and test prep space are ripe for disruption in B2C content space

Open Educational Resources (OER) Need high quality local OER to avoid the Peru OLPC experience

India OER landscape

Source : CSF analysis, meetings with stakeholders

• OER mostly available in English; limited content in Indian languages

• Need OER mapped to curriculum

• Textbooks from NCERT, India’s largest K-12 publisher, available online for free

• Use of many distribution channels, including tablet, SD card, USB, CD ROM etc.

• Adoption in schools still a challenge because of poor ICT training for teachers

Opportunity to activate and streamline the OER environment in India

National Institute of Open Schooling (NIOS) Potential to make NIOS a leading Virtual School

Source: National Institute of Open Schooling, Innosight Institute, Florida Virtual School

Florida Virtual School

• Largest online school in the US

• 130,000 enrolments across K-12

• Focused at children who are home schooled, attend low performing schools etc.

• More than 110 courses

• Little or no face-to-face interaction between teachers and students

• Offers Franchise Program

National Institute of Open Schooling

• World’s largest open school

• 600,000 enrollments in Grade 9-12

• Focused at children who drop out of traditional school for economic or health reasons

• 38 courses

• Offline content delivery and contact time through 2144 study centers

• 16 State level Open Schools

Could NIOS be leveraged to create the largest high school in the world?

Excellence in Teacher Education

• 13,867 Teacher Education Institutions (TEIs) with capacity to train 1.1 million teachers annually

• 85% TEIs are private

• 35% teachers received in-service training in 2009

• 55% teachers find in-service trainings irrelevant

Teacher Education Need for blended Teacher Education Institutions

IGNOU

• 3.5 mm students

• Ed School offers 3 programs

• Repository of digital learning content

• Webcast of lectures through TV channels

• YouTube Channel with only 85 videos

• Network of study centers

Blended models can transform teacher education in India

Teacher Excellence Online community of teachers picking up momentum

Subject Teacher Forum

• State-wide initiative for high school teachers

• In-service subject-wise teacher training

• Trained 4000+ teachers in 1700 schools

• Covers computer skills, basic web 2.0 skills, open source software tools

• Online mailing groups

Karnataka Open Education Resources

• Participatory form of resource creation

• Sporadic efforts to build online communities of teachers

• Secret behind Shanghai’s PISA results – teacher study groups

• TES India’s online community for teachers in India - 500,000 resources

• Over 400,000 teachers benefited from TESSA resources in Africa

• Teachers of India offers resources and online community forum in 5 languages

Technology based models emerging for building communities of teachers in India

Efficient School Management Systems

School Management Software Significant scope of improvement in school administrative functions

Some school management products

• Fragmented market with 200+ ERP products and low price points

• Products by large IT as well as niche companies

• Limited awareness about benefits of digital platforms among teachers

• Purchasing decision made by schools; large scale implementations by states

• Lack of teacher training makes adoption a challenge

• Need flexible, easy to implement solutions

Kerala – State wide SIS project

Source : Interaction with industry players, CSF analysis

School ERP space is crowded and difficult to monetize

Robust Accountability Systems

Accountability Systems Technology platforms can significantly improve accountability systems

National Institute of Smart Governance

(NISG) is helping government build accountability in School Education

Source: Core Scope Document, NISG for MHRD

School Management

Learning Support

School Education Governance

• Student Lifecycle Services including admissions, attendance, performance

• Digital teacher learning material for LM and teacher training for ICT

• Teacher Life Cycle Management Services

Some of the services piloted by government:

Government is piloting new technology based initiatives to drive accountability

New Learning Approaches

Blended Learning Early stage pilots testing blended learning in India

Mindspark Centers, a blended learning pilot with low-income kids Other blended learning pilots

Grade 6 Math in a Chennai government aided School

Physics, Chemistry and Math for Grade 12 in Chennai

After-school blended learning centers for Grade 9-12 in Mumbai

Source : Organization websites; Note: Mindspark Centers’ project is supported by CSF

Now Zaya

Many more blended learning pilots required to assess the potential in India

Critical Questions

How can we build an OER movement in India?

1

How can mobiles be leveraged to improve student learning? 3

What blended models could improve quality of teacher training?

2

What lessons in blended learning could be used in India? 4

How effective have the virtual schools been in the US? 5