2. Executive Summary
Private sector
Estimated worth USD 1.6 bn in 2008
Market
Growth of 25% p.a. to reach USD 4 bn by 2012
English language training is the largest segment followed by Financial Services Retail and IT
English language training is the largest segment followed by Financial Services, Retail and IT
Government encouraging private sector participation although latter are not regulated
Drivers: Demand for skilled labour in service and IT/ITeS industries; inefficient public education
Drivers &
system; competitive business environment
system; competitive business environment
Challenges Challenges: Poor perception and lack of support from financial institutions
P t
Partnerships between corporates and vocational training institutes
hi b t t d ti l t i i i tit t
Trends Public private partnerships (PPP) for government‐owned Industrial Training Institutes (ITI)
Rising demand for online training modules and correspondence courses in language training
PE/VC firms bullish on Indian education sector; investing in vocational institutes as well
A highly competitive market with players focusing on specific areas and expanding across India
Major players:
Competition English Financial Services Retail Information Technology Aviation/Hospitality
VETA ICA IIRT NIIT Frankfinn
English Center IFBI K10 Aptech Air Hostess Academy
VOCATIONAL TRAINING – INDIA.PPT 2
4. Indian education system comprises of formal and informal
network of educational institutes
Indian Education System
Formal Education System Informal Education System
Professional Coaching Vocational
Schools (K12) Pre‐ Schools
Colleges* Classes Training
Multimedia
Public Private Public Private in schools Books
and colleges
• Under the purview of the Ministry of Human Resource
Development • Institutes under the Government: Regulatory control
• No central governing body for K12; Ruled by state boards/
No central governing body for K12; Ruled by state boards/ remains solely with the Ministry of Labor and Employment
remains solely with the Ministry of Labor and Employment
ICSE/ CBSE/ International Boards • Institutes under the private sector: No regulations in terms
• Higher education comprises graduate/ diploma/ of establishment, standards maintained and course fee
professional courses regulated by University Grants charged
Commision (UGC) and All India Council of Technical
Education (AICTE)
( )
Note: * Graduate and Post‐graduate courses
VOCATIONAL TRAINING – INDIA.PPT 4
5. The government has played an important role in developing this
market by providing financial and infrastructural support
Directorate General of
Employment and Training
Governing Body
under the Ministry of
Labor and Employment
Public sector undertaking: Private sector undertaking:
Institute Industrial Training Institutes (ITIs) – 1913 Industrial Training Centers (ITCs) – 3552
such institutes such institutes
Two year courses:
• Dairying, farm machinery and equipment Certificate level courses on crafts training ‐
• Accounting and auditing Engineering:
• Electrical technology, air conditioning and • Manufacturing Sector – 22
g
refrigeration • Service Sector – 27
Courses Non‐Engineering Trades:
N E i i T d
• X‐Ray technician, health care and beauty
• Manufacturing – 8
• Preservation of fruits and vegetables, • Service Sector ‐ 41
food services and management
Students in 11th and 12th standard in
Students in 11 and 12 standard in
Students leaving school after completing
Applicability schools affiliated to Central Board of
anywhere from grades 8‐12
Secondary Education
National Council for Vocational Training (NCVT) and Central Apprenticeship Council (CAC) are advisory bodies and create policies for
National Council for Vocational Training (NCVT) and Central Apprenticeship Council (CAC) are advisory bodies and create policies for
development and also maintain training standards at the institutes
VOCATIONAL TRAINING – INDIA.PPT 5
6. The private vocational training market is in its nascent stage and
is highly fragmented with strong growth prospects
Overview Market Size and Growth
• Vocational training market is estimated to be worth
USD mn
USD 1.6bn in 2008 4,000
4,000
4 000 +25%
• Expected to grow at 25% CAGR to reach USD 4bn by 3,180
2012 3,000 2,540
• A developing market with strong opportunity for new 2,030
2,000 1,624
players
1,000
•P i t l
Private players operate free of any regulations i.e. no
t f f l ti i
governing/ regulatory bodies 0
2008 2009e 2010e 2011e 2012e
Private Education Industry (USD 40 bn) Market Segmentation
2% K-12
3%
Professional colleges 3%
4% 2% English Training
4% 2% Tutoring
9%
28% Financial Services
Test preparation
12% 14% Retail
49% Vocational training
Stationery IT
Child skill Airlines
17%
development 20% Others
Pre-school 26%
E-learning etc
Note: Corporate training programmes not included in this report
VOCATIONAL TRAINING – INDIA.PPT 6
8. Drivers and challenges
Drivers
Demand for skilled workforce Challenges
increasing with the growth in services
sector Individuals perception
Strong demand from the IT boom
Lack of financial institutions support
Inefficiency in public education
system
Increasingly competitive business
i l ii b i
environment
VOCATIONAL TRAINING – INDIA.PPT 8
9. Growth in services sector increasing the demand for skilled
workforce
Demand for skilled labor increasing with the growth in various sectors Impact
• High growth in services sector will generate demand for a skilled workforce and is expected to
boost demand for enhanced technical/ soft skill training programmes
%
Growth in
30 Services Sector
20 Growth in GDP
10
0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
• Growing employment levels and the need for high efficiency will demand adequate training
Employment
Sector CAGR (%)
2008 2011e
Airlines 60000 269528 65
Hotels 70000 192090 40
Retail 880000 3953070 65
Financial Services ‐ Direct 220000 541283 35
Financial Services ‐ Agents 600000 1476225 35
VOCATIONAL TRAINING – INDIA.PPT 9
10. Huge requirement for technically skilled individuals in the IT
sector will benefit players in the market
Demand due to the IT boom Impact
• Constantly growing demand for a large workforce is expected to enhance the IT training market
which is valued at USD 224 mn
Workforce Demanded by the IT sector
mn
2,500 2.2
+22% 2.0
2,000 1.6
1,500
1 500 1.3
13
1.1
1,000 0.8
500
0
2004 2005 2006 2007 2008 2009e
• The number of non‐IT graduates employed in the IT sector has been growing faster than the
number of IT graduates.
• This creates an opportunity for private players offering computer courses including hardware
g, p g
and software training, computer networking and multimedia
• Demand for English language courses also increasing with the growth in IT Enabled Services
(ITES) and Business Process Outsourcing (BPO) sector
ITES and BPO sector constitute 67% of the total IT industry and witnessed growth of 33 % from 2004‐08
VOCATIONAL TRAINING – INDIA.PPT 10
11. Inefficient public education system and competition in the job
market will drive vocational training programmes
Inefficiency in public education system Impact
• Low enrollments and high dropout rates across various levels of the education system has led to
inefficiency in the supply of workforce
Grade Dropout Rate %)
Grade 9‐12 62
Grade 6‐8 50
Grade 1‐5 29
• 80% of the graduates in general streams (BSc/ BA) are unemployable as they lack specific skills
• Inefficient education system is creating awareness among students regarding importance of
channelized skill building
Increasingly competitive business environment Impact
• The dynamic nature of the business environment has made it imperative for individuals to
develop their skill sets in order to compete effectively
• Prospective and existing employees continuously work on enhancing their skill sets as
productivity is demanded from the time of induction
• Corporates across industries are interested in upgrading the skill sets of their employees at all
levels in order to compete with their global counterparts
VOCATIONAL TRAINING – INDIA.PPT 11
12. Existing perception among individuals regarding vocational
training..
Individuals perception Impact
• The levels of vocational skills imparted to the workforce in India compares poorly with other
countries
Share of labour force receiving vocational training
%
100 96
85 86 88
80
60
40 25
20 8
0
India Korea Japan Germany Canada Mexico
• Individuals prefer to invest in traditional forms of learning in order to attain employment rather
than using vocational training as a route
g g
• Individuals are not keen on vocational training courses as a diploma course in India is not
comparable to a degree course at the time of employment
VOCATIONAL TRAINING – INDIA.PPT 12
13. .. and lack of aid from financial institutions acting as a barrier to
growth
Lack of financial institutions support Impact
• Financial institutions like banks provide financial support to the students for taking admissions
in the formal education system like colleges and universities
• Financial support is not available to students interested in entering vocational training
programmes for which institutes charge a huge fee
VOCATIONAL TRAINING – INDIA.PPT 13
15. Key Trends
Partnerships between corporates
PE/VC firms showing interest in and institutes
education sector
Trends
Demand for online and Government encouraging public
correspondence courses private partnerships
VOCATIONAL TRAINING – INDIA.PPT 15
16. Vocational training market witnessing tie‐ups between
corporates and institutes for imparting specialized training
Partnerships between corporates and training institutes
• Corporate houses have begun to form associations with private players in this segment to
impart training to prospective employees Initiatives taken by
This allows corporates to impart customized high quality training corporates in order
• Some such associations to scale profitability
Finance
– An arrangement between ICICI and Manipal University to form ICICIManipal Academy (IMA) which holds
a one year course, sponsored by ICICI and guarantees employment after the completion of the course.
a one year course sponsored by ICICI and guarantees employment after the completion of the course
The students completing the course will be recruited as Assistant Manager‐Band 1 grade in the Bank
– Institute of Finance Banking & Insurance (IFBI), formed by NIIT with equity participation from ICICI Bank,
has partnerships with ICICI Securities, HDFC Bank, Kotak Mahindra Bank, Yes Bank, ICICI Lombard and
Infosys
Aviation
– Frankfinn Institute of Airhostesses Training entered into a two year contract with Air Deccan in April,07
to be the sole institution from which the cabin crew for Air Deccan will be selected
VOCATIONAL TRAINING – INDIA.PPT 16
17. Government focusing on private partnerships to develop vocational
institutes; Demand for online and distance learning increasing
Government encouraging public private partnerships (PPP)
• The Centre approved PPP scheme in order to upgrade 1396 ITIs, which are institutes
development by the government and impart vocational training in various fields Private sector
roped in for better
roped in for better
• Educomp, one of the leading players in the vocational training industry, has been instated execution of
with the responsibility of running 18 ITIs and 12 skill development centers in Gujarat vocational courses
• Under the 11th Plan
INR 310 bn has been allocated for the National Skill Development Program
It also incl des the establishment of 250000 ocational schools r n thro gh PPP
It also includes the establishment of 250000 vocational schools run through PPP
Increasing demand for online training and distance learning
• Demand for online courses has grown in India with the increase in broadband penetration
Veta Best is an online program launched by VETA for training in the English language for students unable to Institutes are in a
access training centers position to tap into
English Center is another such institution that offers online training in English language a wider audience
• Institutes are capitalizing on the requirement of distant learning courses who are often unable
Institutes are capitalizing on the requirement of distant learning courses, who are often unable
to attend lectures due to other commitments (education/employment), by providing self‐study
materials along with online assessment and support
Russels launched their distance learning course for training in English
VOCATIONAL TRAINING – INDIA.PPT 17
18. Vocational training market attracting private equity investors
Increased focus of PE/VC firms
• Private equity players are bullish on education sector in India Private equity firms
• Within the education sector, private equity firms are focusing on unregulated informal market are tapping the
like vocational training institutes, coaching institutes etc unregulated
vocational institute
market
Date Investor Target % Stake Amount USD
Jan 2009 Intel Capital and Helion Ventures Global Talent Track n.a. n.a.
Apr 2008 Zephyr Peacock Management India WLC n.a. n.a.
Oct 2007 SAIF Partners Veta n.a 10 mn
May 2007 SAIF Partners ICA Infotech n.a. n.a.
VOCATIONAL TRAINING – INDIA.PPT 18
20. Competitive Landscape (1/4)
Revenue in INR
Institutes Overview Business Focus
mn (FY08)
English Language
• Focuses on English language training
• Number of centers to increase to 500 by 2010
VETA Started in 1981, 175 centers ~800
• Growing due to a mi x of owned and franchisee outlets
• They have trained 2.1 mn students
British School • Main presence is in Delhi with franchises in Punjab and near Delhi
Started in 1975, 20 centers NA
of Language
of Language • Imparted training to 1 5 mn students
Imparted training to 1.5 mn students
English • Training directed towards application in corporate and retail
Started in 1995, 30 centers ~100
Center spheres
Started in 1986, currently owns
Russels 70 • Educated over 1mn students
25 and has franchised 5 centers
5 and has franchised 5 centers
• Training directed towards application in corporate and retail
Komark Started in 1996 NA
spheres
Financial
Founded in 1999 00, currently
Founded in 1999‐00 currently
• They have been focusing on accounts related and share market
ICA has 350 centers of with 30 are 1200
related courses
owned
• Entered into a partnership with HDFC bank for training their
IFBI (NIIT Founded in 2006, has presence students
1200
venture) ) in 22 locations
• Th h
They have provided education to ~ 5000 students
id d d i 5000 d
Note: The list is not exhaustive
VOCATIONAL TRAINING – INDIA.PPT 20
21. Competitive Landscape (2/4)
Revenue in INR
Institutes Overview Business Focus
mn (FY08)
Retail
Indian
Institute of • Collaborations with other retail institutes towards developing
Started in 2007 NA
Retail course content
Training
Started in 2003, has 32 centers
K 10 NA • Training in retail, marketing and English
across the country
IT
• Focused on IT training, accounts for 90% of their revenues
Started in 1981, currently has • Imperia for management programmes
NIIT 10,068
473 centers • English language through the acquisition of Evolv
• Corporate training, 90% of revenue is accounted for by the US
• 72% of revenue was from training in the retail segment
Started in 1987, currently owns • 28% of revenue from training in the corporate segment
Aptech 10 centers, in addition there are
• Entered the aviation and hospitality business via Avalon
Computer
Computer 350 franchisee and 110 other
350 franchisee and 110 other 992
Education centers through which students • Planning to diversify into the corporate training market
can enroll • Increased the number of trainers from 35 to 100 and its acquisition
of Synergetics has added to their existing content library
Note: The list is not exhaustive
VOCATIONAL TRAINING – INDIA.PPT 21
22. Competitive Landscape (3/4)
Revenue in INR
Institutes Overview Business Focus
mn (FY08)
IT
Started in 1990, currently has • Focused on hardware and networking training programmes
Jet King
Jet King 390
120 centers (104 franchisees) • Plans on expanding their training centers to China & Nigeria
Started in 1976, currently runs
CMS 230 • Focuses on hardware, network and IT training
60 centers
Aviation and Hospitality
• Their centers accommodate ~17000 students
• They entered in to a strategic alliance with Edexcel, towards
Started in 1993, currently has
Frankfinn 750 introducing internationally acclaimed and highly‐rated BTEC Higher
120 centers
National Certificate in Aviation, Hospitality and Travel Management
recognized in 110 countries
• Current student strength stands at 250
Kingfisher
• Expected to have 25 centers in India by 2010
Training Started in 2007 NA
• Provide educational loans to eligible students through tie‐ups with
Academy
HDFC
• Offer BBA degree in aviation tourism and hospitality management
Offer BBA degree in aviation, tourism and hospitality management
Flying Cats Started in 2005 , 31 centers NA • Also offer one year diploma in airhostess training and ground
handling
Note: The list is not exhaustive
VOCATIONAL TRAINING – INDIA.PPT 22
23. Competitive Landscape (4/4)
Revenue in INR
Institutes Overview Business Focus
mn (FY08)
Aviation/Hospitality
Air Hostess Started in 1997, network of 40 • Their centers accommodate between 9000‐11000 students
NA
Academy centers
Teacher Training
• Educomp runs its training programme under the QUEST (Quality
Education for Students & Teachers) brand name
Started in 1994, has 32 centers
,
Educomp
Ed 818 • Th h
They have trained 965000 teachers as of FY08
t i d 965000 t h f FY08
across the country
• Formed partnerships with Microsoft and Wipro for training
Government and rural school teachers in specific modules
Note: The list is not exhaustive
VOCATIONAL TRAINING – INDIA.PPT 23
25. Key Developments
Date Development
Nov – 2008 NIIT launched e‐GURU Web & Multimedia curriculum for school children, based on world‐class Adobe Creative Suite of
Products. This was introduced in order to provide a comprehensive web and multimedia education using professional
software s.
software's.
Oct ‐ 2008 Global Talent Track Ltd is planning a new venture in vocational education with Pune University in collaboration with Cisco.
The target is to provide high quality learning opportunities to over 500000 annually by 2012. The institute plans on
expanding this model to three other States by 2009.
July – 2008 The Chief Minister of Assam urged the tea industry to provide vocational training to their employees. This initiative had
been forwarded so that the labour force is not dependent on tea gardens for a sustainable source of income and endure
been forwarded so that the labour force is not dependent on tea gardens for a sustainable source of income and endure
multiple revenue generating streams.
Apr – 2008 The Gujarat government is looking at the private sector to impart vocational education. The State government plans on
providing basic infrastructure, such as land and building, at polytechnics, engineering colleges and industrial training
institutes, and fund up to 50% or INR 10 mn towards the cost of training equipment and machinery. The sectors being
covered are automotive, chemicals, engineering and textiles. They also plan on partnering with private players for
g g y p p g p p y
technical training in 22 ITIs.
April – 2008 A joint effort between Aptech and Computer Society of India was undertaken towards educating 250000 in the IT sector
in Chennai through Computer‐Based Trainings (CBTs), online trainings as well as instructor led training.
March – 2008 A Centrally Sponsored Scheme (CSS) is under implementation towards the development of new Industrial Training
Institutes (ITIs) in the North Eastern states and Sikkim. The main objective of the scheme is to meet both qualitative and
Institutes (ITIs) in the North‐Eastern states and Sikkim. The main objective of the scheme is to meet both qualitative and
quantitative skilled and semi‐skilled manpower requirement for industry, service sector and self‐employment. The plan is
to establish 22 new ITIs and strengthen / modernize35 existing ITIs in the North‐Eastern region.
VOCATIONAL TRAINING – INDIA.PPT 25
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