Education Industry – next set of challenges

Private sector, higher education in India has probably seen a complete cycle of sorts in the last 8-10 years. What started as a gold rush with students willing to pay super premium amounts to get a MBA/Engg/Medical degree, now seems to have hit a major reality check. Institutes are now finding it difficult to get students, students who are graduating are not getting placement offers (atleast not at the expected grade and salary levels) and there is a clear dearth of good faculty.

Education Industry ChallengesIn the early days, the institutes were playing catch-up with the increasing demand for employees in the services sector. Since there was a healthy pool of faculty to be tapped into, the quality of education was also not compromised. But now, with almost every successful business and businessman having a private college, the demand-supply metrics are completely reversed.

The story is really drastic as far as MBA institutes go. Most are unable to fill their seats. Even if they do, they struggle to find good faculty. In the absence of good faculty, the placements and the long term brand value of the institute suffers. Most students have not done a real summer internship and are unable to handle themselves in any job-interview. There is a clear shake-up about to happen, if things don’t change.

As I was thinking about what changes could bring back the zing, I asked myself a very fundamental question- Why does a b-school need its own campus ?

While some of you are thinking already that I have gone crazy, lemme share with you why I am asking this. I feel the core problem with quality of education is the lack of experienced faculty and administration. The current economics don’t allow a private Bschool to hire a good full time faculty member. Most professors have a few areas of focus and they don’t teach more than a couple of courses. This means that if they are not doing consulting assignments or taking MDP courses, they are not financially contributing to the institute for most of their work hours. This would either force the institute to pay them a meagre salary (which would de-motivate the most critical element of the education system) or ask them to be on a part-time basis. (And yes, this is a problem of scale. At campuses with multiple batches of the same course, its easier to afford full-time faculty members.)

The part time professor also on his part cannot sign-up with multiple institutes as the commute and logistics would be very taxing. Now imagine a scenario where we do away with face-to-face lectures (very radical step I would assume) or we create a university like common campus where multiple institutes share space. They have their own administration, , admission process, fee structure, course outlines and industry interface etc BUT dip into a largely common pool of shared faculty conducting classes at a shared campus.

The way such a MBA park could work is that the park management does the course scheduling and informs the students about which room to report to for which lecture. Accordingly the faculty is also scheduled with a right balance between the daily hours for both of them. The individual institutes have their small management, which pays fees for using the infrastructure and for the faculty (directly or through the park). They could in fact choose from a wider set of faculty options for each subject.

Such an arrangement removes most of the inefficiencies in the system, but brings about a whole new set of branding related issues. How would an institute create its own unique identity in such a cluttered environment. While I am not sure that a MBA park or a virtual classroom is the best answer, but I think we would need to start challenging some of the very basic assumptions of our education system very soon.