Thinking 'right' is not about 'correctly' or 'incorrectly', but more about 'inwardly' or 'outwardly'.

Education – India’s next success story?

India’s growth in recent years has been led by the recent big boom in the BPO/KPO sector. With the off-shoring trend, India faces the challenge of generating an appropriate supply response to retain its existing advantage. The real challenge therefore, is to expand capacities in higher education to keep ahead of the demand curve. India does need to make education, as it’s next success story.

But the country has high levels of illiteracy in the world. Governments both at the Centre and in the States need to allocate far more resources and attention on ensuring that future generations are equipped sufficiently to operate in a knowledge economy. This issue is faced by all countries in the world. However provides us an opportunity to write our next success story.

Given the well established constraints on public funding of education, the role of the private sector especially in the provision of higher education and technical training is the key to tackle the issue.

The Internet has changed the way the world does business, interacts and thinks. It has also played a major role in streamlining processes of universities worldwide. Many universities have their own website on which courses offered are listed. Students apply for admission on-line and they receive e-notifications regarding admission, course schedules, and billing procedures, which they can pay on-line, as well as their results. Teachers prefer to receive tutorials on-line, which not only lends itself to faster transmission, but also avoids the difficulty in reading a manuscript. Similarly, some teachers not only put up their course material on the web-site, but also their lectures, which can be heard on-line such that students who were unable to attend can also benefit from them. The faculty and students remain connected through email on which students receive instructions, send essays/assignments, fix appointments, etc. Many on-line courses allow for discussion through setting up of chat rooms which allow for students and teachers from different parts of the world to converge.

On-line Universities do not require physical infrastructure. But they give greater accessibility to education. The student need not commute or live on campus. This caters to the needs of students who have inadequate financial backup or family support.

Today; higher education is a global business. While private profit seeking companies have entered the education business, even government-controlled universities are seeking independence from governmental authority. This transition is not smooth.

Many countries including India continue to control the fee structure of their universities. Foreign students are generally made to pay much higher fees than local students. Many universities openly solicit the entry of foreign students. They tailor their courses to international requirements and appoint agents abroad besides publicizing the offers widely in the media. Thus, today, the student is the ‘customer’ or ‘client’.

With globalization, Universities are spreading their reach beyond geographical and political borders. They realize that they can examine many more students than they can teach. Hence many of them are collaborating with other institutions or franchisees to teach their courses under their brand name without getting involved in the direct business of imparting the education. This allows for rapid spread and growth with local sensitivities.

This rapid growth is because of the rising desire for professional qualifications, a new need for mid career education and finally, the increasing acceptance of professionally qualified candidature in the job market.

This change in the educational field has raised many questions and governments worldwide have stepped in to allay fears and streamline the perestroika.

Is higher education a marketable commodity like any FMCG product or is it a service like internet, water or electric supply? Is higher education a commercial service or a public good?

While universities and the academic community may differ, WTO (World Trade Organization) argues that higher education is akin to ‘private consumption’ directly benefiting the consumer by way of higher income. Ever since then, the perception of higher education as a commercial service is gaining acceptance.

WTO has also adopted the Principle of ‘Most Favored Nation’. This WTO rule, which is binding on all members, will have its implications for educational services.

The Principle of the ‘Most Favored Nation’ implies that each party ‘shall accord immediate and unconditionally to services and service providers of any other party, treatment no less favorable than it accords to the service and service providers of any other country.’ This means that, if a country allows a foreign institution of a country to provide distance education services, all other countries can request to have the same treatment. Similarly, if subsidy is given to one, others can request the same advantage.

Another important relevance of GATS (Global Agreement in Trade & Tariffs) and WTO, is the notion of ‘National Treatment’. This implies an obligation to treat both foreign and domestic service suppliers in the same manner. It has been contended that this would imply, if implemented rigidly, that a foreign educational institution of, say, distance education, can demand subsidies similar to those received by public universities in an individual country. In other words, there should be a ‘level playing field’.

Education today is a trillion Dollar industry worldwide. Education industry groups are, therefore, attracted by the prospects of liberalization and globalization of this industry. They seek more international deregulation and generally support WTO efforts. As demands for higher education grow the world over, the governments are also finding it difficult to provide adequate budgetary allocation. GATS cover educational services of all types for all countries whose educational systems are not exclusively provided by public sector or those systems that have a commercial purpose. Hardly any country has education exclusively in the public sector domain and therefore, almost all the world’s educational systems come within the purview of GATS.

The GATS covers four types of services. These are:

– Cross border supply of services. Distance education falls in this category.
– Consumption of a service abroad by the citizens of a member country on the territory of another member country. The most common example is undertaking studies abroad.
– Commercial presence of service supplier of a member country on the territory of another member country, enabling the supplier to provide a service in that territory. This includes activities carried out by foreign universities or other institutions in another country.
– Presence of natural persons enabling a form of trade resulting from mobility of people from one member country who supply a given service in another country. In education this would imply courses offered by foreign teachers.

The goal of GATS and WTO is to remove trade or tariff barriers in these areas. In the sector of education these generally refer to government regulations, exchange controls, nationality requirements of students and teachers, non-recognition of equivalent qualifications, and rules regarding use of resources and subsidies.

So far, about 42 countries have agreed to the full provisions of GATS. Many have chosen to limit its scope. Higher education services, figure in India’s offer on liberalization in trade in services that the Commerce Ministry submitted to WTO in August 2005.

While the academic community has not reacted positively to globalization, many developed governments see it as an opportunity.

A more powerful version of GATS will be a place which will ensure that educational services will be progressively commercialized, privatized, and capitalized. International brands in consumer products are being embraced on a global scale with trans-national institutions taking account of local legal codes, currencies, local tastes, habits, customs and adjusting to a new international order.

The rise of global authorities like WTO & GATS and their Dispute Resolution Mechanism has far reaching consequences for globalization in education.

India has a great opportunity. Can it pen the next success story after IT/ITES?

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Milind Wagh

Milind has been providing P&L leadership to MNCs, mid-stage businesses and new ventures over the last two decades and is credited for nurturing great teams for driving new self-funded initiatives from portfolio of ideas. 'Think Inward' attempts to explore matters of the mind that spur individuals and teams in addressing challenging situations and markets. It advocates the need to 'Think Inward' within ourselves. An Organization is all about human behaviour at work. The people; their mind-sets; their motivation and their emotions determine the nature of their 'emotional hooks' in that organization. 'Think Inward' attempts to decode these hooks and understand human behaviour at work.

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