The Inevitability of Universal Online Education

Students today are trapped in a strange dilemma precipitated by disturbing trends. One hand we have the devaluation of the college degree as more and more employers are demanding college degrees for jobs that essentially call for high schools ( see New York Times ) and on the other we have colleges rising exponentially and leading to a second debt crisis. ( See Time ) This may be a new phenomenon affecting the United States but has been a well known problem in the dismal economic scenario in poorer parts of the world. In India we have had the tragedy of graduate and even post graduate students fighting over janitorial opportunities in the arid job market while thousands of students never have the wherewithal to continue their studies beyond high school ( Class XII) or even middle school (Class X) In the gloom that is gathering over the global economy it is the student and the education system that is finding itself trapped in a cul-de-sac that seems to be leading nowhere in general and despair in particular !

image taken from www.usnews.com

Yet, it is only education and learning that could provide a safe, guaranteed, environment-friendly and sustainable way for the world to dig itself out of the hole that it has found itself in. But to use it effectively we must be open to throwing away many of the myths and misconceptions that cloud our judgment and inhibit us from crafting a bold new architecture on which the world of the future can or should be based. An architecture that is based on distance learning and online education.

The biggest myth about online education is that it can never be as effective as face to face classroom training. This has been repeated ad nauseum and has acquired a ring of Gobbelsian authenticity. The fact is that very often face to face classroom education, when delivered by incompetent and under prepared faculty, is no better than no education at all even though students are presented with a degree or diploma for simply sitting through the course and writing an exam. On the other hand, self motivated acquisition of knowledge from websites and Youtube videos have equipped many people with the skills that are necessary in their daily work -- even though there is no universally accepted certification in the end. The bottom line is that it is futile to compare online and class room education. Instead the comparison should be between effective and ineffective pedagogy, between good and bad teachers -- irrespective of the medium or the technology used to transfer data, information, knowledge and wisdom from the teacher to the taught.

The Massively Open Online Courseware ( MOOC ) movement is a step in this direction. In fact big name universities on either side of the Atlantic have come together to create two major consortia -- Edx created by MIT, Harvard and UC Berkeley in the US and FutureLearn consisting of 12 British Universities namely  Birmingham, Bristol, Cardiff, East Anglia, Exeter, King’s College London, Lancaster, Leeds,  Southampton, St Andrews and Warwick, along with UK distance-learning organization The Open University (OU)  -- have been formed to develop the concept. And then of course there isCoursera a commercial entity  and Udacity created by Google employees who have all stepped into the game. While the jury could be out on the effectiveness and eventual viability of these enterprises, it might make sense  to see what is it that a traditional university has that distance learning must meet, match and exceed to be taken seriously. To understand that let us ask ..

What is a University ? At its most fundamental level a university has three critical characteristics, namely

1. People : Lots of people, both students and teachers
2. Space : A shared space that all these people can access simultaneously
3. Interaction : An environment that encourages vigorous and rich interaction amongst all these people

Now let us look around us and see if these three conditions are being met anywhere in the digital world and the first place that we look at is

Social Media : Facebook, Twitter, Linkedin, Youtube, Google+, Instagram ... what is common to all these platforms ?

1. People : Again we have lots of people, though not necessarily teachers and students, though they are not excluded.
2. Space : Obviously these platforms are accessible to, and are indeed accessed by, all the people who participate
3. Interaction : There is no dearth of interaction and in fact interactions are the lifeblood of any social media platform.

What is even nicer is that these interactions can be very, very "rich" interactions, not just in terms of media -- that is images, audio, video -- but in terms of questions, answers, clarifications, comments, appreciation, criticism and even evaluation in terms of likes, shares and votes on each and every interaction. In fact I believe that social media interaction is far more richer in terms of diversity and depth than what could ever be possible in the physical world.

So the success of a distance learning program in emulating and surpassing a traditional university lies in its ability to map the university model on the social media model that has become so wildly popular.

In this context, it would be nice to keep in mind that when Apple had first introduced the Newton, a personal digital assistant, way back in the dim, dark “middle ages”, it was not accepted. But the iPad, which is essentially a similar device, was an instant success because ubiquity of the web and proliferation of the cellphone network through which the web could be accessed inexpensively created an environment where the iPad (and other tablet computers) could thrive.

Similarly, distance learning and the concept of open universities as established by institutions offering correspondence courses may not have been very popular but the same when delivered through the medium of a “Web 2.0” or social media platform could be far more effective and popular and pose a credible alternative to the established brick-and-mortar classroom that have become so impossible expensive and unaffordable for large parts of the global population.

One key area that distance learning falters on and yet, one that is of crucial importance to students is a credible evaluation mechanism that employers can depend upon and on the basis of which they can offer job placements. In fact, the popularity of most universities rest, not on what they teach or how, but how many of the graduating batch is placed and at what salaries. In fact, irreverent commentators have compared universities to job placement agencies but from the student’s perspectives that is great significance.

So the real challenge in distance learning is to put together a periodic examination process that attaches a credible grade or marks to each student that the employer can use to sort and sift the good, the bad and the ugly ! This can easily be arranged if we adopt a hybrid model where teaching is online but evaluation done in a  physical classroom under the supervision of strict invigilators in a number of distributed locations that need not be anywhere near the teacher who taught the course. This is hardly a big challenge since we are quite used to conducting examinations like the GRE, GMAT, CBSE, JEE on a nationwide or even global basis through certified and credible franchisees.

The last thing that we need is a placement service that will allow employers to reach out to qualified students and evaluate them in an objective manner. Job portals like Monster and Naukri can be plugged in with the online university and interviews can be conducted on Skype or Google Hangout to any level of detail.

All the pieces are in place. We just need someone to tie all this together and create a solution to problem of delivering credible college degrees to motivated individuals in an inexpensive manner.

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This article originally appeared in techtaffy.com a technology blog published from San Jose, California, USA.

Distance Learning : From Correspondence Courses to MOOC

Distance learning is a very seductive idea.

If we go back to the era of the Mahabharata, we learn about Ekalavya, the tribal boy, who on being denied access to Dronacharya's classes on warfare on account of his caste, taught himself archery simply by observing the teacher from a distance ! The tragic consequences of his effort are well known and should perhaps serve as a warning to societies in general and teachers in particular.

In a more realistic timeframe, approximately a hundred  years ago, correspondence courses appeared and over a period of time these courses became an integral part of various Open Universities. Unfortunately degree granting programs based on correspondence courses never acquired the popularity or employer acceptability of their classroom counterparts for a variety of reasons.

With the advent of computing technology, computer based training (CBT) programs appeared and while these never quite made it to the level of university courses, a lot of vocational training programs were developed on this model. This was particularly so in the case of training for computer oriented skills where both students and the course creators were generally comfortable with the usage of computer software.

Then came the internet and the "killer application" that it helped spawn -- the browser based world wide web. With rapid expansion of both bandwidth and computing power the teacher -- or at least his video, his words, his presentations -- could really overcome the inconvenience of distance and slide into the student's room, or at least his computer.

So is distance learning finally ready for prime time ?

Though a lot of us believe so there are quite a few sceptics who point out that like correspondence courses that were never quite able to replace the university, distance learning is destined to follow a similar trajectory. At best it might end up as a supplement to existing university programs and remain as that stepson who is allowed to stay along in the family along with the new children !

This is wrong and let me explain why it will not be so. It is not enough to have a good idea  -- there must be a field for the idea to germinate and grow into a big tree.

In 1987, when "IBM" personal computers were just about beginning to enter the corporate landscape ( in the Western world, not India ) Apple released a product called Newton -- a handheld computer called the PDA or personal digital assistant that was actually quite smart. Not only was it portable and could do many of the things that a regular computer could, it had some truly futuristic features like handwriting recognition. Unfortunately the product never quite caught on with people and was finally abandoned in 1998.

But only 12 years later, when the same company released a similar device, the famous iPad it got a rousing welcome and it has gone on to become one of the most successful products in the history of computing devices.

What had changed ? First there was the internet, the web and email but perhaps what was most important was mobile telephony. Thanks to the "field" prepared by these technologies, the idea behind the Newton PDA blossomed either as smartphones or tablet computers and has now become the most ubiquitous device that the world has ever seen. Now it is very difficult to question the relevance of any application that is based on these products.

How is this analogy relevant to distance learning ?

Let us assume that correspondence courses and computer based training programs are like the Newton PDA, an idea whose time had not yet come. What has changed since then ?

Before we answer this question, let us step back and examine the "competition". What is it that a traditional university has that distance learning must meet, match and exceed to be taken seriously. To understand that let us ask ..

What is a University ? At its most fundamental level a university has three critical characteristics, namely

1. People : Lots of people, both students and teachers
2. Space : A shared space that all these people can access simultaenously
3. Interaction : An environment that encourages vigorous and rich interaction amongst all these people

Now let us look around us and see if these three conditions are being met anywhere in the digital world and the first place that we look at is

Social Media : Facebook, Twitter, Linkedin, Youtube, Google+, Instagram ... what is common to all these platforms ?

1. People : Again we have lots of people, though not necessarily teachers and students, though they are not excluded.
2. Space : Obviously these platforms are accessible to, and are indeed accessed by, all the people who participate
3. Interaction : There is no dearth of interaction and in fact interactions are the lifeblood of any social media platform.

 What is even nicer is that these interactions can be very, very "rich" interactions, not just in terms of media -- that is images, audio, video -- but in terms of questions, answers, clarifications, comments, appreciation, criticism and even evaluation in terms of likes, shares and votes on each and every interaction. In fact I believe that social media interaction is far more richer in terms of diversity and depth than what could ever be possible in the physical world.

So the success of a distance learning program in emulating and surpassing a traditional university lies in its ability to map the university model on the social media model that has become so wildly popular.

In an earlier post I had explored how we could deliver Distance Learning on a Social Network Platform but if we look around we would see that the movement towards Massive Online Open Courseware (MOOC) is a step in this direction.In fact big name universities on either side of the Atlantic have come together to create two major consortia -- Edx created by MIT, Harvard and UC Berkeley in the US and FutureLearn consisting of 12 British Universities namely  Birmingham, Bristol, Cardiff, East Anglia, Exeter, King’s College London, Lancaster, Leeds,  Southampton, St Andrews and Warwick, along with UK distance-learning organization The Open University (OU)  -- have been formed to develop the concept. And then of course there is Coursera a commercial entity  and Udacity created by Google employees who have all stepped into the game,

Distance learning is no more a technology of the future. It is here and now as the technology is widely and inexpensively available. In fact, the way I would put it is that the bus is here but whether you board it or not is something that you have to decide and decide fast !

What would you need to get going ? That will be my next post.

The 49 week MBA program

The B-School business is in a bit of a crisis ! Globally, MBA applications are falling [ WSJ ] and in India many B-Schools, especially those run by slightly shady operators, are shutting down [ ToI ]. An obvious reason for this state of affairs is that, at least in India, the AICTE has created an environment where only shady people with little interest in education but with bags of money are allowed to build and operate B-Schools. Given the current state of political leadership in the country it is futile to expect any kind of policy support and so it is up to the B-School community to figure a way out of this rut.

Should we revamp the curriculum ? To make it more relevant ? Datar in Rethinking the MBA  has identified that MBA programs should focus on leadership skills, creative and critical thinking. In an earlier post I have explored the possibility of replacing the functional approach in the MBA program [ Marketing / Finance / Operations / HR ] with a more holistic approach that balances the application of left and right brain skills.

Another approach could be to make the MBA program more compact, efficient and effective. Can we cut the flab from the AICTE mandated 2 year program and come out with something that is shorter and so less expensive ?

While we cannot deny that placements is the principal reason why students join B-Schools, pedagogy is important as well. A quick survey of well known B-School curriculum shows that the teaching credits that range from 72 at Kellogs, 60 at Stonybrook, 60 at Stern, NYU, 51 at Haas, Berkeley, 60 at Harvard and 63( equivalent) at Wharton, UPenn. So if we shorten the program, we need to make sure that it delivers a significant amount of course content.

Here is a sample MBA program that comfortably delivers 72 credits of actual teaching in just 49 weeks.

Course Structure of 49 week program

Term 1  -  10 weeks of teaching @ 30 hours/week  + 1 week for examination = 11 weeks

Subject	Teaching Credits	Contact Hours
Marketing - I	2
Human Behaviour and Management - I	2
Organisational Design, Change and Transformation	2
Financial Accounting and Reporting	2
Cost and Management Accounting	2
Statistical Methods for Management	2
Mathematical Models for Management Decisions	3
Management Information Systems	3
Business Ethics	2
Organisational Leadership	2
Oral and Business Communications	2
Total	24	288 max

Term 2  -  10 weeks of teaching @ 30 hours/week  + 1 week for examination = 11 weeks

Subject	Teaching Credits	Contact Hours
Marketing - II	2
Human Resource Management	3
Economics for Management	3
Corporate Finance	3
Production and Operations Management	3
Business, Government and International Economic Environment	2
Business Law for Managers	2
Strategic Management	2
Written Business Communications	2
IT for Business Applications	2
Total	24	288 max

Term 3 : Company Internship OR Management Research Project 
8 weeks of Project Work worth 8 credits

Term 4 :  10 weeks of teaching @ 30 hours/week  + 1 week for examination = 11 weeks

Subject	Teaching Credits	Contact Hours
Choice of 8 - 10 electives from the pool of possible electives
Total	24	288 max

Placement  : 4 weeks

So the total duration is 3 teaching terms of 11 weeks each ( 33 week ) + 8 weeks Internship+ 4 weeks for Placement + 4 weeks for inter-term holidays, public holidays, registration, viva etc. to arrive  at a figure of 49 weeks.

Here we have assumed that a 3-credit course requires 36 contact hours even though many B-Schools are happy to offer only 30 contact hours.

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So what is the moral of the story ?

The current 2 year MBA program is on its way to becoming a part of history. We need to revamp it with a new curriculum, a new technology enabled delivery platform,  a more efficient placement process or as is explained here a shorter, more cost-effective program itself.

Or why not combine all these elements into something new and radically different ?

I am sure that many people will find a million things wrong with this approach, but let the debate begin !

Distance Learning : An Inverted Model for Indian B-Schools

"No army can stop an idea whose time has come." This quotation from Victor Hugo  has often been used in defence of many new but unpopular ideas and I will invoke it here to justify the usage of distance learning techniques, particularly in business schools that lead up to an MBA degree.

Image "borrowed" from http://smude.edu.in/blog/tags/distance-education

Whether we like it or not, many global trends are first set in the United States and then the rest of the world joins in and distance learning is one of them. Respected and well known schools like Stanford, Harvard and others are offering a large number of undergraduate and postgraduate programs that are based on a calibrated mixture of on-line and on-campus pedagogy.

Despite criticisms of being less effective than face-to-face teaching, distance learning is here to stay and grow because of compelling economic reasons -- many students are simply not able to pay the kind of fees that big US schools charge and unless schools are able to offer education at the price point that students can afford, the invisible hand of the free market will make the business of B-Schools unviable ! So just as US companies have accepted the hard economic reality of software services being outsourced to India, so will B-Schools accept the reality of distance learning.

But as many all cases, the Indian market is different from the US and that is why it may make sense to invert the model that is being followed in the US. In the US, the dominant pattern is that the faculty is sitting in Harvard or Stanford whereas the students are scattered anywhere in the world -- as long as they have a broadband Internet connection and a credit card. You register, pay, log-in and access course material either synchronously ( as in live lectures ) or asynchronously by downloading videos, slide decks and books. The only real challenge is the evaluation or examination process where it is difficult to ensure a no-cheating rule but it is a matter of time before even this will be resolved.

How is this different from the Indian B-School market ?

In India there is no dearth of "customer"s and students are flocking to even some very shady B-Schools that have been created by crooked entrepreneurs with the active connivance of the regulatory bodies for higher education. But the real trouble is that there is no one to teach ! There is no  good faculty, not just in these shady schools but also in the well funded, well known and well regarded Government schools like the IIMs and the IITs !

While the situation is understandable in the small schools, the situation in the big schools may be puzzling but easily explained in economic terms. Let us look at this issue from the perspective of who should be teaching in B-Schools and who are actually doing so.

B-schools act as feeders into corporate management and should typically impart skills that are necessary to run a business profitably and ethically. Ideally, a B-School faculty should be someone who has the practical experience of being in the corporate sector and has been in a senior position. In such positions,  he should have faced and resolved real issues in the area of finance, marketing, operations, HR and business strategy. But instead, what we find in B-Schools ( particularly the IITs/IIMs) are academics with PhD degrees who (a) are paper tigers with scores of theoretical papers published in academic journals that are only read by other academics, not by corporates and what is worse (b) are people who have never had the ability or the confidence of actually working in the industry. What rubbish do they teach ?

Why is this ? Economic reasons. Under the 6th Pay Commission, a senior faculty at a premier Government institute is paid around Rs 12 - 15 lakhs for annum which is just on par with the average salary that an MBA student gets when he or she passes out from the same school !! A well respected manager, with about 15 - 20 years of experience -- the kind that we would like to have as teachers in MBA schools, would be drawing anything from Rs 40 - Rs 80 lakhs per annum. Now no sane person in his senses will leave his corporate job -- however stressful it may be -- and take a 80% salary cut to join a B-School. And even in a moment of madness (for example when he has been passed over in the annual promotions ;-) he were to contemplate this, his financial commitments ( children's education, EMI for flat) will prevent him from doing so. And if this involves moving to a different, non-metro area, then the spouse will have violent objection because she would be cut off from her normal earning and entertainment opportunities. ( This assumes that the person concerned is a man but is even more true if it is a lady who is contemplating this move)

So in the US, they have lots of good faculty in good schools but losing students but in India we have lots of students but no faculty. Hence time to invert our model of distance learning.

In an earlier post on Zoho Show and Google Hangout I have shown how easy it is for a faculty, sitting a distant location, to teach a class full of students using simple and inexpensive technology.

So my model works like this. We set up a B-school and create the infrastructure for students to live and work. In fact this could be at remote and picturesque locations so that academics is not disturbed by the discordant notes of urban life and, perhaps this is more important, land is cheap and so capital costs are low.

There is no need to recruit any full time faculty at all and in any case, if the location is remote,  good faculty will in not join anyway. Only utterly jobless people who cannot go anywhere else or old and retired professors trying to pass of their ancient and out-dated knowledge in their second and third innings of their career will be interested. This is precisely the kind of people whom we do not want in our B-Schools.

So instead of recruiting full time faculty, what we have is a network of high end managers located wherever they are currently employed -- anywhere in India. In each city we can either set up a small "transmission" kiosk, through a telephone operator or if the faculty is comfortable enough install the simple hardware ( basically one or two computers with audio/video and a high speed internet connection ) at his home or place of work.

On campus we create an excellent telecommunication infrastructure so that every student has more than adequate bandwidth (enough even for his not-so-surreptitious Torrent downloads ;-) both in class as well as in the hostel.

To make things a bit smooth, the faculty may be required to make one visit to the campus at the beginning of the semester, get acquainted with the students and if necessary get familiarised with the technology. As the class progresses, he can keep in touch with his students through private social media platforms like the Kollaborative Klassroom or through more mainstream media like LinkedIN or Facebook.  In fact the Coursera model has similar ideas but we need to remember that it is US model and so needs to be tweaked for our inversion.

This model also removes the one big irritation in traditional distance learning -- how to conduct valid examinations ? In this case, this is not a problem at all since all the students are located on the campus and local staff ( not distant faculty) can monitor the examination and ensure fairness. Moreover with the students living together on the campus, there is no difficulty for them to work together and collaborate on assignments -- which is one of the important aspects of B-School pedagogy.

While this model will allow a Institute to draw upon the best B-School faculty from anywhere in the country, it also has the potential to push up faculty earnings in a dramatic manner. Typically a faculty at a premier Government Institute teaches two 3-credit subjects in a semester and so faces a class for six hours every week. [ I am ignoring "research" because B-School research is generally pointless-data-collection-followed-by-regression-analysis, nothing else. It is done only for the purpose for faculty promotions because of the philosophy of publish or perish adopted in many Institutes ] For this six hours of work per week he is paid Rs 12 lakhs. A corporate manager works 40+ hours a week and gets say Rs 60+ lakhs. So it makes sense for a corporate manager to move to academics if and only if he can teach in at least five or six institutes simultaneously -- and this is very much possible if we adopt the distance learning model that was explained in my earlier post ! In fact with this model, well known Institutes can create the distance learning environment that will allow their faculty to enhance their income five or six times and so draw the best people from the corporate world into the academic domain.

Of course faculty is not the only thing that matters in a B-School. Placement plays a very important role in the success of school. We also need to look at the existing curriculum and see what changes can or should be made. But these are big topics and need to explored separately.

Let us first get cracking with the faculty issue and address it with our inverted model of distance learning. It is a win-win strategy that benefits both Institutes as well as faculty since the former gets good teachers and the latter gets to earn much more without stressing the economic and business model of MBA education in India.

Distance Learning with Zoho SHOW and Google Hangout

image : getcareerkhabar.in

Distance learning is a concept whose importance is growing by leaps and bounds everyday. We all know that there is nothing that can beat the physical presence of a teacher in the class but the exigencies of delivering educational services at an affordable price point is forcing everyone -- both students and teachers -- to accept the reality of this technology.

In fact it boils down to the ROI, the return on investment : we all know that it would have been far better to have been at London and watch opening ceremony of the Olympics but the cost of the travel and tickets forced all of us to watch it on TV and I am sure that the Organising Committee earned more from TV rights than what they could have got through ticket sales. So it was a win-win for all to have the show broadcast in a virtual medium even though the experience was sort of degraded by the small screen. So is the case with distance learning.

Most distance learning platforms use a combination of streaming video -- to carry voice and video -- and a way to show slides ( of the Powerpoint variety ) by sharing the screen. I have in the past experimented with Anymeeting and other webinar software to teach my MBA class but the results are very uneven. The Java based software is rather unstable especially if bandwidths are low but what really hurts is the way the screen share is often blocked by campus or corporate firewalls. Moreover when in screen share mode, the presenter -- or teacher -- cannot see the video of the classroom and this makes it very difficult to speak "blindly" into a slide. Believe me, having done this a number of times, I am yet to get used to this and it really cramps your style and having to toggle between the video mode and the screenshare mode is very irritating for the audience.

Which made me look for alternatives and I have discovered that the combination of Google Hangouts + Zoho Show is a wonderful combination.

Let me explain how it works.

We have a class of 60 students and in the front of the class is a computer that is connected to the internet and also to an overhead projector. The teacher creates a Hangout and invites a student to join the same from the computer that is connected to the overhead projector. So the video of the teacher comes on the screen and his voice is heard through speakers. If this computer has a camera then the teacher gets to see the students in the class. [ If you want a better view, a second computer with a camera can also join the Hangout -- you can go upto 10 machines ]

Now it is possible to share a screen from the teachers laptop through the Hangout but this is messy -- the text on the screen becomes small so does the video. So we do not do this.

Instead, the teacher has a second laptop and he uses Zoho Show to run a presentation in broadcast mode. Now each student in the class has a laptop ( all students carry laptops these days, particularly MBA students ) and they fire up a browser and go to a URL of the presentation that the teacher is running. This means that they see the same presentation and -- this is the clincher -- they are always on the same page, or slide where the teacher is ! In fact, when the teacher changes slides, all the students get their slides changed automatically.

So the students watch the teacher talking on video on the common classroom screen on the wall AND they see the slides that the teacher is talking about, on their personal laptops -- closely simulating the situation in a physical class ! And the icing on the cake is that when viewing the Zoho Show broadcast, the students have ready chat screen with them in which to type in questions.

When the teacher sees a student raising his or her hand he looks at the chat screen, reads out the question and then answers it verbally for the benefit of all the students in the class.

The single biggest advantage of this hybrid approach is that because the video is delinked from the presentation the chance of a breakdown / freeze up is far lower. The standard webinar software like Anymeeting, by clubbing the two functions together, introduce a lot of instability that causes frequent breakdowns that degrades the pedagogical experience.

It is not that Hangout does not freeze, but when it does, the teacher can exit the Hangout and rejoin again and the class continues without much difficulty. In fact having two parallel and independent channels across the two locations gives a lot of flexibility to all concerned.

Zoho Show is an excellent cloud based presentation tool where you can either create smart slides or it will happily import existing Powerpoint or OpenOffice/Libre Office presentations. So creating a deck of slides in Zoho is quite easy. But what  makes Zoho Show really useful is the broadcast mode that allows a whole class of students to view the the slide deck synchronously with the teacher and the other students. Google Docs, the other cloud based presentation tool, does NOT have this feature at the moment.

Net-net, after using the Google Hangout + Zoho Show combination for nearly 75 minutes today, both the students and me ( the teacher ) were very happy with the outcome. Let us see how far we can push this technology.

Tax Free Bonds to fund Education Infrastructure

Tax free bonds have always been very popular in India. In the good old days of the distant past we had RBI “Relief Bonds” that offered up to 10% tax free income but it was never quite sure for whose relief the bonds were for -- perhaps for the Indian tax payer! That was then. Now we have similar bonds floated by  IIFCL and NHAI, albeit at far lower rates that vary between 6.5% and 8.3% but even these have garnered Rs 30,000 crores in FY 11-12. Carried away by this appetite for tax free bonds, the finance minister has proposed to float similar bonds to the tune of Rs 60,000 crores in the next fiscal.

But where could or should this money be used ? The NHAI has of course been building roads but I think there is another piece of critical infrastructure that can be funded through this route -- education !

Why ? Because education is the mother of all infrastructure that this country needs very badly..

For a variety of reasons not directly attributable to government policy or purposeful planning, India is “blessed” with a burgeoning population of young people that we flaunt in front of an ageing China, Western Europe and North America. But between this young population and the hypothetical demographic dividend that the nation expects from them lies a deep moat of a non-existent educational infrastructure ! If our youngsters cannot be taught and trained in a manner makes them productive the demographic dividend will disappear into the blue and we will be left instead with the demographic liability of a sullen, disillusioned population that will take to urban and rural terrorism under the guise of Maoism and related labels.

But why can we not build enough schools and colleges to accommodate the educational aspirations of our youth and their worried parents ?

To begin with the Government has neither the money nor the project management skills -- let us admit it, our sarkari babus do not have the drive, energy, enthusiasm  -- to create the lakhs of school and college seats that the nation needs urgently. Should it even try, it will get bogged down in corruption and redtape and all that will result is another scam followed  by more howls of anguish in Parliament.

But what is worse is that even private entrepreneurs are debarred, by policy,  from filling this gap. How ? Because our policy makers have allowed only not-for-profit organisations to build schools and colleges. Prima facie this seems to be a noble idea but the devil lies in the detail. Even if there were a few public spirited individuals or groups of individuals who are keen to build good schools and colleges they will be caught in a policy quagmire that is possible only in India.

Consider the following : AICTE regulations require that the society running a college must own the premises. Now unless the entrepreneur has a rich uncle ( or more unsavoury sources of money ) how will they acquire the land and construct the premises ? Will any sensible bank give a loan to a  not-for-profit society that wants to start a college ? Very unlikely unless the society has political connections !

Net-net it is not possible for a normal, honest, entrepreneurial educationist to start a college. So how do we see so many private engineering, medical and management schools sprouting up all around the country. Because they have all been created with shady money or by people with strong political connections and are designed not to educate our youth but to siphon off the money from their parents wallets. There could be a few exceptions like BITS Pilani, created by the Birlas but that is a manifestation of the rich-uncle syndrome and not likely to be replicated on a large scale.

There could be many ways to break this logjam. First our obsession with not-for-profit education can be overcome. Second the stranglehold of the AICTE and other unsavoury educational regulators can be weakened. But these are major policy matters that would call for an extensive debate. Instead, a simpler solution would be to create a National Educational Funding Agency (NEFA) on the lines of the NHAI and IIFCL.

With the blessings of the Finance Ministry, NEFA could float tax free bonds with coupon rates and tenors similar to the other tax free bonds. Funds collected through these bonds could be deployed as long term loans advanced exclusively to new and existing not-for-profit societies that have been approved by the AICTE or other regulatory bodies. This will easily fund the capital expenditure necessary to create new infrastructure in the form of classrooms, hostels, laboratories and playgrounds that are essential for institutions as per regulatory norms.

With ready access to legitimate, low cost capital, entrepreneurs would be free to direct their energy to create good quality educational institutions where the running costs -- revenue expenditure and loan service -- can easily be met from tuition fees. Most parents today are already paying a lot of money for private tuition and coaching classes and would be happy to transfer a portion of this expenditure towards fees of schools and colleges set up by honest and competent educational entrepreneurs.

Tax free  bonds to fund private educational infrastructure could be a neat way to transfer private funds to private entrepreneurs to build national infrastructure that would be under the supervision and control of a national regulator -- could anything be more win-win than this ?  But is there a catch ? Who or what could derail this idea ? And why would they ?

Education in India is a highly regulated market run under a ruthless license-and-permit raj. Most private educational institutes are owned and operated by politicians or their crony capitalist friends to fleece the hapless parent and earn enormous profits right under the nose of our hypocritical not-for-profit education policy. These individuals and their lobbying agencies will work hard to ensure that policies that hit their cosy oligopoly are nipped in the bud.

Can the nation free itself from such self-tied knots ? And live up the aspirations of its youth ? Let us wait for the answer that lies in the womb of the futurity and in the sagacity of the Finance Minister.
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image taken from http://www.faadooengineers.com -- a source of information about engineering education

[In]Efficiency in Public Sector Educational Institutes

Government funded institutes and colleges in India are certainly far from being in the pink of health. Even the premier institutes of technology and management fall far short of international standards but if one were to say so in public, as only well known people like Narayan Murthy and Jairam Ramesh can afford to do, he or she will be mocked, humiliated and shouted down.

But why do we say this ?

The fame of the IITs and IIMs rests neither on the faculty nor on their research output but on the students and alumni.  In fact the only real value that these institutes bring to the table is the rigour of their admission process, namely the JEE (now discredited because of coaching classes and being discontinued ) and the CAT. Not much value is added after that. In terms of research, the less said the better.

Even a cursory investigation into this unfortunate state of affairs will reveal that the real problem is the poor state of the underlying management and administrative mechanism that governs these Public Sector Educational Institutions (PSEI). Given the rigid, anachronistic and inefficient processes under which they operate,  it is no wonder that these PSEIs have no chance of competing with world class institutions in other countries.

There are five major areas of immediate concern.

1. Human resources : We take it for granted that competent people will leave lucrative corporate careers and join PSEIs at Government salaries but in reality this never happens. As a result we have a majority of employees -- both faculty and staff -- who are there as a necessity and not out of choice ! This is tragic because we would want the best people to be here. Obviously salaries cannot be hiked across the board. Instead we must have a well designed HR mechanism that seeks out competent people, induces them to join PSEIs, help them manage both their careers and their personal life and ensure that they are well looked after in terms of accommodation and other perks. In parallel there must be an annual performance appraisal that rewards good work and punishes the laggards. In short we need an active HR function and a corporate style Compensation and Benefits policy that is significantly different from the take-it-or-leave-it, one-size-fits-all salary structure that is doled out by the 6th Pay Commission.
2. Financial Accounting : Most PSEIs have very weak financial management systems and there is no clarity on where the money is being spent. There is clearly no shortage of money and neither is there any allegation of blatant theft but because of the large granularity at which expenses are tracked there is significant scope of inefficiency in the usage of funds. A simple enforcement of the generally accepted accounting principles that mandate a highly granular set of cost codes and charge accounts followed by a thorough statutory audit would easily unearth vast amounts of ill-spent money that can be diverted for useful activities.
3. Procurement : While tracking money is difficult, spending money is even more so. Being government organisations, these PSEIs have to follow the rigid L1 tender process and there is the perpetual fear of investigations by the CAG, the CBI and the Vigilance Commission. This does not deter unscrupulous deals -- any vendor is more than happy to provide the three mandatory quotations -- but it introduces an intolerable delay and difficulty in any genuine procurement process. For example, attempts to buy low value products and services over the web using credit cards and then seeking reimbursements are simply not possible. A simplified procure-to-pay cycle that will reduce costs and yet ensure compliance with appropriate approval procedures will introduce a great deal of flexibility and efficiency in the system.
4. Asset Management : PSEIs sit on vast assets but most of these are ill managed. Civil and electrical infrastructure is maintained poorly as there is no clear cut demarcation of authority or accountability. Equipment is bought and not used because of lack of training or compatibility. Non functioning equipment is not repaired or cannot be repaired because of procedural issues. Junk piles up in dusty store rooms but cannot be disposed easily because of outdated audit mechanisms. A smart and modern asset management policy will ensure that the public funds are used much more effectively.
5. Enterprise Information Architecture & Culture : It is indeed a paradox that even though these PSEIs are supposed to be thought leaders in technology and management their own usage of the same is woefully low. Other than archaic and chronically unreliable email systems, none of the modern tools and practices that are taken for granted in corporates are available here. Email is for broadcast of information, not for interactive discussion. Peons still carry paper documents, through proper channel, to people across the floor and get acknowledgements of receipt in “peon books”. Tele  and video conferences are unthinkable, social media is something that we read about it in newspapers and mail based approvals -- for even mundane matters -- are not acceptable. So if anybody is not physically available, all decisions are held up indefinitely.

Technology, or its cost, is not a bottleneck here. People are simply not willing to experiment with new technology or new ways to manage accounts, handle procurement, manage assets or adopt any widely used business process from the corporate world. In fact this leads us back to the first point, the HR issue,  because there is no incentive to improve anything nor is there any disincentive for staying with the status quo.

If we wish to improve the internal efficiency of our public sector educational institutions we should first be show our eagerness for Process Enhancements in Non Teaching Activities (PENTAgraha ?) in these five areas. This will automatically lead to the induction of better faculty who would be able to teach better and to do better research, leading to a better return on the investment made by the tax payer.


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originally published in FirstPost.com