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Market Research India - Vocational Training Market in India 2009

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  • 1. Vocational TrainingVocational TrainingMarch 2009
  • 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
  • 3. •Market Overview•Drivers & Challenges Drivers & Challenges•Trends•Competition•Key Developments VOCATIONAL TRAINING – INDIA.PPT 3
  • 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 etcNote: Corporate training programmes not included in this report VOCATIONAL TRAINING – INDIA.PPT 6
  • 7. •Market Overview•Drivers & Challenges Drivers & Challenges•Trends•Competition•Key Developments VOCATIONAL TRAINING – INDIA.PPT 7
  • 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 workforceDemand 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 in30 Services Sector20 Growth in GDP10 02001-02 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 marketDemand 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 mn2,500 2.2 +22% 2.02,000 1.61,5001 500 1.3 13 1.11,000 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 programmesInefficiency 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 growthLack 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
  • 14. •Market Overview•Drivers & Challenges Drivers & Challenges•Trends•Competition•Key Developments VOCATIONAL TRAINING – INDIA.PPT 14
  • 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 trainingPartnerships 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 increasingGovernment 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 PPPIncreasing 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 investorsIncreased 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
  • 19. •Market Overview•Drivers & Challenges Drivers & Challenges•Trends•Competition•Key Developments VOCATIONAL TRAINING – INDIA.PPT 19
  • 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 dNote: 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 libraryNote: 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  handlingNote: 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 modulesNote: The list is not exhaustive VOCATIONAL TRAINING – INDIA.PPT 23
  • 24. •Market Overview•Drivers & Challenges Drivers & Challenges•Trends•Competition•Key Developments VOCATIONAL TRAINING – INDIA.PPT 24
  • 25. Key DevelopmentsDate DevelopmentNov – 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. softwares.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
  • 26. Thank you for your timeFor an updated report or any customized research requirements, please contact:Gaurav KumarE‐Mail: gaurav.kumar@netscribes.com; sales@netscribes.comPhone: +91 33 4064 6214; +91 983 030 9715Netscribes’ Services:RESEARCH & ANALYTICSRESEARCH & ANALYTICS MARKET INTELLIGENCE MARKET INTELLIGENCE CONTENT SOLUTIONS CONTENT SOLUTIONSInvestment Research Market Monitoring & Competitive  Social Media MarketingEnterprise Market Research Intelligence Marcom Support ServicesPatent Research Sales & Prospect Intelligence Content Management ServicesSyndicated Market ResearchS di t d M k t R h Listening & Media Monitoring Li t i & M di M it i Book Packaging Services B kP k i S i Brand SurveillanceFor further details, visit us at: www.netscribes.comAbout NetscribesNetscribes supports the organic and inorganic growth objectives of global corporations through a combination of Enterprise Market, Investment & Patent Research, Market & Sales Intelligence, Social Media Monitoring & Management and Custom Publishing solution.Disclaimer: This report is published for general information only. High standards have been used for preparing this market research report; Disclaimer: This report is published for general information only High standards have been used for preparing this market research report;however, Netscribes, Inc. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. VOCATIONAL TRAINING – INDIA.PPT 26