Economic Overview
Global growth is forecast at 3.5 percent in 2015 and 3.8 percent in 2016, with uneven
prospects across the main countries and regions. Growth in emerging market economies is
softening, reflecting an adjustment to diminished medium-term growth expectations and
lower revenues from commodity exports, as well as country-specific factors. The outlook
for advanced economies is showing signs of improvement, owing to the boost to disposable
incomes from lower oil prices, continued support from accommodative monetary policy
stances, and more moderate fiscal adjustment. The distribution of risks to near-term
global growth has become more balanced relative to October 2014 but is still tilted to the
downside. The decline in oil prices could boost activity more than expected. Geopolitical
tensions continue to pose threats, and risks of disruptive shifts in asset prices remain
relevant. In some advanced economies, protracted low inflation or deflation also pose
risks to activity.
Regional Highlights
Growth in the United States and Canada remains solid. However, while lower energy
prices have boosted growth momentum in the United States, they pose downside risks to the
Canadian economy owing to the relatively large size of its energy sector. In the United
States, labor markets and business and consumer confidence have shown solid improvements.
The economy has also so far been resilient to the weaker external conditions and the
strengthening dollar. The next prominent policy challenge will be a smooth normalization
of monetary policy. Building political consensus around a medium term fiscal consolidation
plan and supply-side reforms to boost medium-term growth—including simplifying the
tax system, investing in infrastructure and human capital, and immigration
reform—will continue to be a challenge. In Canada, continued monetary policy
accommodation and gradual fiscal consolidation would help achieve growth that is more
balanced and more broadly based.
There are signs of a pickup and some positive momentum in the euro area, reflecting
lower oil prices and supportive financial conditions, but risks of prolonged low growth
and low inflation remain. The priority is to boost growth and inflation through a
comprehensive approach that, in addition to quantitative easing, features the use of
available fiscal space, especially for investment; productivity-enhancing structural
reforms; and steps to strengthen bank balance sheets. Growth is more robust in European
advanced economies outside the euro area, but some of these economies may need to tighten
macro prudential policies if housing-related risks do not subside
Asia’s growth is forecast to hold steady in 2015, and the region is expected to
continue outperforming the rest of the world over the medium term. While the Chinese
economy is shifting to a more sustainable pace, growth is projected to pick up elsewhere
in the region. This reflects the boost from lower world oil prices, strengthening external
demand, and still-accommodative financial conditions despite some recent tightening. Risks
are two sided, but downside risks dominate. Elevated household and corporate debt amid
higher real interest rates and a strong U.S. dollar could amplify shocks. Growth risks
from within the region are also on the rise, and realignments of the major reserve
currencies could create an uncomfortable trade-off between financial stability and
competitiveness. Policymakers should maintain prudent frameworks and build buffers to
enhance resilience, and implement reforms to support demand rebalancing and relieve
bottlenecks to growth.
Growth in Latin America and the Caribbean slowed to 1.3 percent in 2014 and is
projected to soften to an even lower rate in 2015. The downturn in global commodity
markets remains the main drag on activity in South America, even though lower oil prices
and a solid U.S. recovery provide a boost to other parts of the region. Low business and
consumer confidence in Brazil and the intensifying economic crisis in Venezuela weigh
further on the near-term outlook. Flexible exchange rates can play a critical role in
adapting to tougher external conditions, but policymakers will also need to ensure prudent
fiscal positions are in place and catch up on structural reforms to raise investment and
productivity.
Industry Structure & Development
The market for global education expenditures could top $6.3 trillion by 2017, according
to estimates. This includes various education sectors like e-learning, edu-gaming,
social/learning communities, test prep, language and others ranging from early education
and K-12 through to post secondary, higher education and corporate learning.
Currently the market is worth $4.4 trillion, and poised to grow significantly over the
next five years. The e-learning market is projected to grow by 23 percent between now and
2017, making it the fastest-growing market in education. In dollar terms, this translates
into $166.5 billion in 2012 and $255 billion in 2017.
The education industry comprises the entrepreneurs, businesses and organizations which
are playing an increasingly important and essential role in supporting public education by
meeting the demand for products and services that both complement and supplement public
education. These include after-school tutoring providers, school improvement and
management services, charter schools, alternative education and special education
services, professional development for teachers and administrators, educational content
providers and suppliers, as well as the rapidly growing sector of online education.
The Education Industry is changing – social & economic pressures are forcing
senior education leaders to rethink business models and consider a range of new
technologies, to bring down the cost of administering education institutions and scale the
business, according to research from Gartner, Inc.
Educational technology holds the promise of substantially improving outcomes for K-12
students, but there are significant challenges in bringing new educational technology
products for this population to market. It is difficult for producers of these
technologies to demonstrate the effectiveness of their products to potential buyers and
market fragmentation creates barriers to entry by all but the largest suppliers.
Technological enhancements in the Industry, like, Online learning, also known as
e-learning, is booming. Market research firm Global Industry Analysts projects it will
reach $107 billion in 2015. More traditional methods of training or education are not
going away, not yet, but organizations of all types, from public schools to corporations,
are opting to train and inform via the web.
Initiatives undertaken by various Countries
The U.S. Department of Education has developed several important federally-funded
initiatives that impact high schools. The National High School Center provides synthesized
information to help educators understand U.S. Department of Education guidelines for these
initiatives, resources to help identify funding, and resources to track how the funds are
currently being allocated.
To deliver an excellent education to every child and to ensure U.S. global
competitiveness, President Obama has set the goal of having the highest proportion of
college graduates in the world by 2020. Though ambitious, this goal is attainable through
bold reform and innovation spanning the education pipeline from early learning to college.
President Obama emphasized the importance of everyone is entitled to the best education
possible – from the day they start preschool to the day they start their career. Some
of the schemes being implemented are:
a) Helping Early Learners
b) Making College more affordable
c) Higher Education should not be a luxury
d) Preparing kids for success
e) Supporting great Teacher
Another initiative is The state-led effort to develop the Common Core State Standards
was launched in 2009 by state leaders, including governors and state commissioners of
education from 48 states, two territories and the District of Columbia, through their
membership in the National Governors Association Center for Best Practices (NGA Center)
and the Council of Chief State School Officers (CCSSO). State school chiefs and governors
recognized the value of consistent, real-world learning goals and launched this effort to
ensure all students, regardless of where they live, are graduating high school prepared
for college, career, and life.
The development of the Common Core State Standards is a success story of meaningful,
state-led change to help all students succeed.
During the development process, the standards were divided into two categories:
• First, the college- and career-readiness standards, which address what students
are expected to know and understand by the time they graduate from high school.
• Second, the K-12 standards, which address expectations for elementary school
through high school.
The college- and career-readiness standards were developed first and then incorporated
into the K-12 standards in the final version of the Common Core we have today. The
National Governors Association (NGA) and the Council Chief State School Officers (CCSSO)
received nearly 10,000 comments on the standards during two public comment periods. Many
of the comments from teachers, parents, school administrators, and other citizens
concerned with education policy helped shape the final version of the standards.
As of August 2015, 42 states, the Department of Defense Education Activity, Washington
D.C., Guam, the Northern Mariana Islands and the U.S. Virgin Islands have adopted the CCSS
in ELA/literacy and math. They are now in the process of implementing the standards
locally.
In UK the Public spending on education grew rapidly during the 2000s. Over the decade
between 1999–2000 and 2009–10, it grew by 5.1% per year in real terms, the
fastest growth over any decade since the mid-1970s. As a result, it rose from 4.5% of
national income in 1999– 2000 to reach a high point of 6.4% in 2009–10. Going
forwards, we estimate that public spending on education in the UK will fall by 3.5% per
year in real terms between 2010–11 and 2014–15. This would represent the largest
cut in education spending over any four-year period since at least the 1950s, and would
return education spending as a share of national income back to 4.6% by 2014–15.
Making India the skill capital of the world is one of the visions of Prime Minister
Narendra Modi. While this will be a journey, the Union Budget 2015 does provide an
opportunity for the government to bring to the forefront policies and initiatives that
will be undertaken to achieve the vision.
A Deloitte study has recognised the Indian education sector as a ‘sunrise
sector’ for investments. This is because the sector offers huge potential to
investors in the regulated as well as non-regulated markets. The education market in
India, which is at present valued around $150 billion, is headed for a major leap forward
in the years to come.
As a percentage of GDP, expenditure on education has gone up from 2.9% in 2008-09 to
approximately 3.4% in 2014-15. Compare this with the Kothari Commission (set up in
1964-65) and National Education Policy recommendation suggestion of allocating 6 percent
of GDP towards education.
Statistics reveal that the allocation to the education sector received a 17 percent
jump for fiscal year 2013-14 and approximately 12.5 percent for fiscal year 2014-15.
However, it is still inadequate considering the sectoral requirement.
In the above background, some of the key expectations of the Education sector from the
forthcoming budget are summarised below:
Encouraging private investment in the sector:
While significant operators in primary and secondary education sector operate on
‘not for profit’ basis, this aspect has impact and creates challenges in
creating further infrastructure in the sector. In order to encourage investment in the
sector, the government may contemplate encouraging private investment in this area along
with devising mechanism wherein the investor is entitled to an agreed share of return on
investment – akin to what has been prescribed for certain infrastructure projects
like the power sector.
Encouraging education tourism:
Education tourism could be the next opportunity for India. Policies could be formulated
that focus in this direction. India can well be seen as being intellectual capital of the
world.
Affordable education loan/finance facility:
The government should recognise the need for facilitating affordable education
loan/finance facility by setting up institutions/education finance corporations that
provide easy finance at concessional rates. Schemes could be devised to extend credit
facilities for higher education without surety/indemnity by the government, repayable upon
securing of job by the student.
Incentives for enrollment to skill development courses:
Enrollment for skill development courses should be eligible for additional deductions
in computing taxable income.
Policy Initiatives
The extant foreign direct investment policy and the regulations governing education
system need to be aligned to generate opportunities and encourage foreign capital and
improve infrastructure in education sector. Incentive towards staff training and
development:
Tax incentives/ relief could be extended to universities/institutions that incur
expenditure towards staff training and development.
Deduction towards tuition fees:
Considering the inflation and the rising cost of education, taxpayers should be
entitled to a deduction of an adequate sum against gross total income for fees paid to a
higher educational institution recognised by the government. This will ease the hardship
of common man.
The links between early childhood care and education are strong and mutually
reinforcing. Early childhood care and education services help build skills at a time when
children’s brains are developing, with long-term benefits for children from
disadvantaged backgrounds. In Jamaica, for example, infants who were stunted and from
disadvantaged backgrounds receiving weekly psychosocial stimulation were earning 42% more
than their peers by their early 20s. Since 2000, pre-primary education has expanded
considerably. The global pre-primary education gross enrolment ratio increased from 33% in
1999 to 50% in 2011, although it reached only 18% in Sub-Saharan Africa. The number of
children enrolled in pre-primary schools grew by almost 60 million over the period. In
many parts of the world, however, there is a wide gap in enrolment between the richest and
poorest. Part of the reason is that governments have yet to assume sufficient
responsibility for pre-primary education: as of 2011, private providers were catering for
33% of all enrolled children, rising to 71% in the Arab States. The cost of private
provision is one of the factors that contribute to inequity in access at this level.
A lack of attention to education quality and a failure to reach the marginalized have
contributed to a learning crisis that needs urgent attention. Worldwide, 250 million
children – many of them from disadvantaged backgrounds – are not learning even
basic literacy and numeracy skills, let alone the further skills they need to get decent
work and lead fulfilling lives.
This learning crisis has costs not only for the future ambitions of children, but also
for the current finances of governments. The cost of 250 million children not learning the
basics is equivalent to US$129 billion, or 10% of global spending on primary education.
Curriculum and Assessment Strategies to improve Learning
To improve learning for all children, teachers need the support of curriculum and
assessment strategies that can reduce disparities in school achievement and offer all
children and young people the opportunity to acquire vital transferable skills. Such
strategies need to build strong foundation skills by starting early, moving at the right
pace, enabling disadvantaged pupils to catch up, meeting the language needs of ethnic
minorities and building a culture of reading.
Curricula need to address issues of inclusion to enhance the chances of students from
marginalized backgrounds to learn effectively. Where gender-responsive curricula have been
developed, as in projects in Mumbai, India and in Honduras, test scores measuring
attitudes on several gender-related issues improved. In Honduras, adolescents who
participated in the project also demonstrated better problem-solving skills and higher
test scores. More needs to be done to design curricula that pay attention to the needs of
disabled learners. In Canberra, Australia, curriculum reform aims to help teachers improve
student attitudes regarding students with disabilities, improve the quality of
interactions between students with and without disabilities, and enhance the well- being
and academic achievement of students with disabilities.
Classroom-based assessment tools can help teachers identify, monitor and support
learners at risk of low achievement. In Liberia, the EGRA Plus project, which trained
teachers in the use of classroom-based assessment tools and provided reading resources and
scripted lesson plans to guide instruction, raised previously low levels of reading
achievement among grade 2 and 3 pupils. Assessments need to be aligned with the curriculum
so that they do not add significantly to teachers’ workloads. In South Africa,
well-designed assessments with clear guidelines on how to interpret results helped
teachers with little training who were working in difficult conditions: 80% of teachers
were able to use them in class.
UNITED STATES OF AMERICA
The enrolment of students has been marginally improving as per the chart below.
SOURCE: U.S. Department of Education, National Center for Education Statistics. (2015)
The enrolments for the 2014 & subsequently in 2015 are expected to be better than
the last few years.
Five Key Education Priorities for the Obama Administration
Improving Accountability in Public Education
The accountability systems put in place by No Child Left Behind have had some positive
effects, but not enough to meet the goal of all students reaching proficiency standards by
2014. The five recommended policy actions to improve the system.
Increasing Participation in No Child Left Behind School Choice
No Child Left Behind gave students in low-performing schools the opportunity to switch
schools, but relatively few use the option. Research suggests that this reform’s
power to induce educational improvement is limited at this time.
Designing Effective Pay-for-Performance in K-12 Education
While there is some evidence that paying educators for performance works, there are
many challenges to adopting such systems in the United States.
Promoting Effective Preschool Programs
High-quality preschool education helps increase school readiness and close achievement
gaps for children at risk; however, access varies greatly. Federal policymakers could
allocate funds to support states in improving preschool quality and access for the most
disadvantaged children.
The Role of Charter Schools in Improving Education
Despite controversy, the number of charter schools is increasing. Research finds that
charter schools do not produce some of the predicted negative effects, and they may have
positive effects on student attainment.
UK Market
8.4 million Pupils enrolled in state-funded and independent schools in England.
1.3 Percentage growth in pupils numbers since January 2014. This increase is larger
than in previous years and is driven largely by a 2.1 per cent increase in the number of
pupils in state-funded primary schools.
The number of pupils in state-funded secondary schools rose by 0.1 per cent, the first
rise since 2010.
UK Government has been increasing the expenditure in the Education & training space
consistently over the years.
UK faces desperate shortage of science and maths teachers- More than 100,000 secondary
school pupils will be taught maths and science by teachers untrained in the subjects
because of a chronic shortage of new recruits. The shortfall in expertise will discourage
sixth-formers from studying the disciplines – which have been identified by the
Education Secretary Michael Gove as "national strategic priorities" – at
A-level.
India Market
The education sector in India is at a vital stage of its growth. The vast diversity in
ethnicities coupled with varying demographics has prompted different players to invest in
the sector. Meanwhile, the upward surge in the Indian economy and consequent increase in
income levels has aided the spending on education in the average Indian household.
It is expected that the Indian education sector’s market size will increase to Rs.
602,410 crore (US$ 100.23 billion) by FY15 from Rs. 341,180 crore (US$ 56.77 billion) in
FY12, due to the expected strong demand for quality education.
The present Indian higher education system comprises of about 700 universities and over
35,500 colleges. More than 85 percent of these students are enrolled in bachelor’s
degree programmes and about one-sixth of all Indian students are enrolled in
Engineering/Technology degree programmes.
To increase the percentage of students going for higher education to 30 percent by
2020, India will need 800 more universities and another 35,000 colleges, according to the
Ministry of Human Resource Development (HRD).
Vocational Training Business
A huge population base - India will have 22 million young people entering the workforce
every year from 2015 - and a changing social dynamic, when organised employment expands
rapidly, are hugely important drivers of Vocational Business in India.
Only in recent years has the government realized the enormity of the challenge and
endeavoured to overcome the same through various initiatives. Under the Prime
Minister’s National Skill Development Mission, the government has launched an
initiative to train 500 million people by the year 2022. Further, the National Skill
Development Corporation (NSDC) was created in order to streamline the identification and
mapping of skills requirements, facilitate private participation through grants, gap
funding, etc. The Government has undertaken multiple measures to address some of the
problems mentioned in the earlier chapter, through such measures as:
NSDA: The NSDA comprises the PM’s National Council on Skill Development (NCSD),
the National Skill Development Board (NSDCB) and the NSDC. It oversees and directs the
efforts taken vis--vis skill development by both the Government and the private sector,
in a bid to fulfill the skilling target set under the 12th Five Year Plan.
Sector Skill Councils (SSC): SSCs are initiatives born out of Public- Private
Partnerships (PPPs). In addition to facilitating capacity building, the SSCs also define
the structure, levels, and benchmarks of training for each industry. This will help
achieve consistency in the imparted training, aside from ensuring an ease of employment,
and a portability of skills.
In the year 2015- 2016 the number of SSC has increased from 8 to 22 and it is expected
to increase to 50 by 2022.
National Vocational Education Qualification Framework (NVEQF): The NVEQF is a
recently-launched initiative which is to be implemented in polytechnics, engineering
colleges, and other institutions, across the country. A seven level certification program,
starting from 9th standard/ grade, will be initiated in the various vocational training
disciplines, culminating in a degree at the end of the seventh year.
The Modular Employable Scheme (MES): It is being implemented by the Ministry of Labor
and Employment as part of their Skill Development Initiative (SDI). The key objective of
MES is to recognize and certify the prior learning of existing workers. MES offers
short-term modular courses to school dropouts and existing wage earners and facilitates
certification for skills and learning gained informally.
National Service Scheme (NSS): The NSS has been proposed as an agent of change which
engages students in skill development projects alongside other stakeholders in the society
like academia, industry, and social organizations like NGOs and foundations. The pilot is
expected to cover 30,000 students over a three-year period, eventually impacting 3.2
million students across universities, colleges, and secondary schools in the country.
Further to the above mentioned initiatives, Government introduced many scheme this year
like (a) National Urban Livelihood Mission (NULM), to develop the skills of urban youth
and make them market ready workers/ professionals (b) Deen Dayal Upadhyay-Gramin Kausjal
Yojna under National Rural Livelihood Mission, to ensure livelihood of poor urban youth
through skill development (c) Pradhanmantri Kaushal Vikas Yojna (PMKVY), this scheme
provides a small term skill development course and help youth in getting jobs (d) State
Project Livelihood Colleges (SPLC), to meet the long-term need of skilled youth these
colleges are taking shape (e) Hunar Se Rozgar Scheme, this scheme also generates
employability through skill development.
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