The Landscape Of Edtech: Mapping The Innovation Revamping Education In India

From classrooms to smart devices, the medium of education and learning in India has gone through a paradigm shift. With over 665 Mn wireless internet subscribers (Q3 2019), India has seen a massive 14% increase in the addressable base for internet services in just one year. This rate of adoption has meant great things for startups and digital products and services and has given rise to personalisation and convenience when it comes to the school curriculum and off-classroom learning.

The growing popularity of online learning has provided a major push to two of the top subsectors in the edtech market— test preparation (from K-12 to entrance exams) and online certification. To put this into perspective, between 2014 to 2019, startups in test prep and online certification startups earned a whopping 88% ($1.6 Bn) of the total capital inflow in edtech.

The skewness in funding and investor interest for test prep and online certification startups is in line with the prevalence of the grades-first mentality in the Indian market as well as the need for skilled tech labour. These products are highly in demand in the Indian market because they mirror the traditional climb up the education ladder — preparation for exams and getting the right certificate for employment.

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Emerging Trends In The Edtech Landscape

Beyond these, the fundamental reason is that Indians are more than willing to pay for these services. Income elasticity towards the expenditure on education-related products is lower than healthcare indicates that at various income levels, Indian consumers would prefer compromising on healthcare expenses rather than education.

As per the findings in the Economic Survey 2017-18, the income elasticity in relation to PFCE (private final consumption expenditure) for healthcare stood at 1.95 whereas in the case of education-related commodities it was 0.93.

Apart from test prep and online certification, another edtech subsector which is gaining popularity is skill development. Related to online certification, skill development focussed on updating the skills among young and experienced workers from non-digital to digital needs, reskilling labour industries which need to be overhauled as well as building the talent pool for new-age startups looking at technology such as artificial intelligence, blockchain, robotics, industry 4.0 and more.

The menace of skill deficiency in India has had an impact on the overall productivity of the country’s workforce. As per the International Labour Organisation (ILO), in 2018, the output per worker (PPP terms) in India ($18.5K) was 49% lower compared to the world average ($36.6K). With the application of technology, the problem of skill deficiency in the country can be tackled at the early stages of learning itself. Similar to emerging markets in Southeast Asia and Africa, edtech startups in India are spearheading this revolution as well.

Test Prep Startups Capitalise On India’s Obsession With Marks

Despite great progress in terms of internet and smartphone penetration, exposure to new ideas and systems of learning and the rising awareness for the value of quality education — beyond simply gaining the most marks — India is still an exam-centric educational market.

Outside schools and colleges, the Indian education system is enmeshed within layers of entrance tests and examinations across various national academic levels as well as for professional courses. Among these, some of the popular ones are the JEE Main for admission in undergraduate level engineering courses, CAT (Common Admission Test) for pursuing a masters degree in business administration and UPSC (the age-old Indian favourite) which opens up the doors to join the Indian Administrative Services as well as other lucrative government postings. Apart from these, there are dozens of other examinations for seats in mass media, computer applications and other courses.

To simply say that millions of students turn up for these examinations is to understate the rush. For instance, in the JEE Main 2019 examination, the total number of registrations stood at 1.8 Mn, a 74% increase compared to the previous years — 1.04 Mn — for roughly 15K seats. Limited intake and the growing number of aspirants are making competition fierce across all national level examinations which means that the opportunity for capitalisation is growing as well.

In older times coaching institutes were the go-to place for students to prepare for such examinations but with edtech platforms getting more prevalent, online test prep has boomed. The advantages are clear — cost and convenience. Fueled by these, the online test preparation market in India is estimated to be worth 515Mn by 2021, growing at a CAGR of 64% since 2016.

At the same time, the new colleges created to meet the demand are still working through the problems that are typical to new universities. Which means that students are looking at edtech startups to reach the next level in terms of skills and employability. That’s where certification and skill development platforms are making hay.

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Solving The Skill Development Conundrum

When it comes to certification vs skills, in the Indian context, the former has had an upper hand. Since 2014, there has been a proactive approach from the government side in boosting the skill capacity of the Indian workforce and students about to enter the workforce. Programmes such as Skill India Mission, SWAYAM (Study Webs of Active Learning for Young Aspiring Minds), NDL (National Digital Library) and others have had results — but in many ways, it has not solved for the imminent automation wave.

For now, there’s plenty of funds allocated for these initiatives, but the tech economy is still craving for the right talent. In FY’18-19, $6.2 Mn was allocated for SWAYAm, which is 14% lower than allocation two years ago ($7.2 Mn). The efforts of the Indian government do not seem to be on implementation but in policy and institutions.

Let’s focus on primary school. As per an analysis done by DataLabs on data provided by Stones2Milestones, the advanced reading skills of school students is decreasing as they move to higher grades. In the fourth standard, the percentage of students with adequate advanced reading skills stood at 12.5% of the total whereas two grades higher, the percentage was a mere 3.9%. Similarly, in the IT segment, the average trainable-employable gap among the Indian students in new-age IT skills (such as data sciences and cloud computing) was 7.4%. More information in this can be found in “The Future Of India’s $2 Bn Edtech Opportunity Report 2020”, where we look at edtech in India deeper than ever before.

The effects of the primary school learning deficit are felt at college and university level, where students have made it after rote learning and striving for marks. Skilling and certification startups are cashing in on this deficit. As per a study by KPMG, the estimated market size for the online certification and the reskilling industry is estimated to be $463 Mn(2021) growing at a compounded annual growth rate(CAGR) of 38% since the year 2016.

The key themes and major advantages for edtech are personalisation and inclusion. The ease of access makes online learning more egalitarian in a country with huge income inequality. It has certainly made access to learning materials easier for a vast majority of students.

Beyond the school system, edtech startups have enabled more individuals to explore various new skills and has allowed experienced workers to take on newer challenges in the tech industry more easily, without the hurdles that Indians used to face. If one speaks to the generation that studied and achieved success through hard work in India before the 1990s, one might hear stories of how such a transition would have been nearly impossible just 20 years ago. Thankfully for today’s Indians, edtech startups are helping them cross these hurdles across the journey — from student to workers to entrepreneurs.

With Inputs From Nikhil Subramaniam

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