China and India: The Rise of the Asian Mega Markets and What it Means for Professional Publishers Sudeep Das Vice President – Publishing Services NIIT (USA), Inc. © 2005 NIIT. All Rights Reserved. The Opportunities India’s education and training sector offers private institutions an estimated US$ 40 bn market, with a potential 16% five-year CAGR. More than 1,200 private engineering colleges, 300 business schools and more than 140 private medical colleges in India. • Represent a US$7bn market • Engineering takes the major share at US$5.85bn (or 83% of the total). • After K-12, private professional colleges form the single biggest category in Indian education. Source: CLSA Research Report(APAC Markets), March 2008 © 2005 NIIT. All Rights Reserved. The Opportunities Vocational Training - includes staff training for • Airlines • Retail chains • Hotels • Financial services • Basic skills such as English improvement. Global Workforce Requirement • 50% of population is below the age of 25 • Global shortfall of 56mn skilled workers by 2020, India will have 47 million excess at that time. • But without proper education and training majority of these potential workers will not be employable. Source: CLSA Research Report(APAC Markets), March 2008 © 2005 NIIT. All Rights Reserved. The Opportunities Quality of Education • McKinsey study - 10 to 25% graduates in India are employable • 300,000 engineering diplomas awarded each year, only 25% competent to work • 50% of technology graduates not good enough • Quality of Study Material • Syllabi revision is slow • Little effort on research and development in Universities • Libraries are not well stocked All this presents an opportunity for providing better quality content and solutions. Source: CLSA Research Report(APAC Markets), March 2008 © 2005 NIIT. All Rights Reserved. The Opportunities Skills Development • Market for Higher Education in India is projected to grow almost three times in the next 10 years • Market size for Skills Development in India is projected to grow almost ten times, albeit over a smaller base • Current private education market in India of ~US$ 40 billion is expected to grow to ~US$ 115 billion in the next 10 years • Multimedia in schools, child skills development, IT training and Elearning, preparatory and vocational studies, though relatively small segments in 2008 are forecasted to grow in the range of 25% to 60% and will together represent 1/4th of the market. Source: CLSA Research Report(APAC Markets), March 2008 © 2005 NIIT. All Rights Reserved. The Opportunities Chinese Education legislation has been updated in line with policy on internationalization • New educational approaches being tried in Chinese institutions • Concept of education management has been introduced • Great need for management development and training has emerged in institutions and education authorities • English language teaching and training programs that lead to professional qualifications have multiplied • Growing demand for Continuing Professional Development, particularly on taught postgraduate courses, and distance education Source: British Council Market Intelligence © 2005 NIIT. All Rights Reserved. The Opportunities Chinese IT Education & Training market to grow at a CAGR of 19% from 2007 to 2011 • Driving Force • Chinese government promoting vocational education in a big way. • IT education & training is more employment-competitive for the industry than traditional academic education. • Technological progress & gap of IT talents foster good opportunities for development of the market. • Hampering Factor • Industry development model is not yet robust. Source: CCIDC Consulting Annual Report on China’s IT education & training market © 2005 NIIT. All Rights Reserved. The Indicators - India • All this points to the fact that the education market in India will remain robust and keep growing for at least a couple of decades. • The Five-Year Plans in India are beginning to reflect increased government spend on education. • Given the special focus on education in the Eleventh Five-Year Plan(2007-2012), I have no hesitation in calling this Plan a ‘National Education Plan’- Prime Minister Mr. Manmohan Singh • Even Tax structure contains an extra Education cess. © 2005 NIIT. All Rights Reserved. The Product Portfolio - India • TextBooks – Indian education market uses about $2B of textbooks every year. There is a strong need for improving quality of content and coming up with new content for vocational training and skill development. • Test Prep Products – Annual market is $1.7B with a Career development focus. • Educational CD-ROMs – Current market size is $120M mostly in the K-12 space but growing rapidly. • Vocational Training – includes staff training and improvement of skills like English Language Improvement. Current market size is $1.4B per year. • Emerging Corporate & Retail e-Learning products – This is the fastest growing avenue, to grow 10 times in 5 years • Multimedia inside schools is a new wave Source: CLSA Research Report(APAC Markets), March 2008 © 2005 NIIT. All Rights Reserved. The Challenges • Adaptation of content needed to suit Indian & Chinese markets • Strong Local players tapping the market • Localization/Translation of content • Prevalence of secondhand book usage © 2005 NIIT. All Rights Reserved. Thanks!! © 2005 NIIT. All Rights Reserved.