Inclusive business models in education
In the global education industry there is now increasing talk of ‘inclusive business models’, especially with reference to investment opportunities across the developing world. The concept originates from the international development community, which after half a century, has finally realised that for-profit companies not only serve the rich but also have a lot to offer the two thirds of the world’s population (4 billion) that live on less than $3,000 a year. An inclusive business model is therefore simply defined as a sustainable business that increases access to goods and services to low income communities, while at the same time providing them with new sources of revenue and employment.
While examples of these models have already been documented in numerous other sectors such as banking, housing and health, it is only in the last few years that they have started to appear in education. For example the International Finance Corporation (IFC) has documented the growth of the ‘Value for Money Degrees’ model which makes university education accessible to all through a combination of innovations that increase affordability and value. An example is Anhanguera in Brazil which educates 650,000 students a year on its campuses and 100,000 students online. The Monitor Group has also documented the ‘Private Vocational Training at the Seam’ model, which enables private vocational colleges to provide low cost, no-frills, quality further education courses. In South Africa more than 700 private colleges currently provide learning opportunities for over 700,000 students.
In India, Sudiksha Knowledge Solutions is one of a growing number of innovative and ambitious for-profit ventures which provides preschool education for children living in poverty. A woman from each local community is responsible for the daily management of each school, and in return, they receive profit sharing, thereby providing school managers with an incentive to continuously improve the services which they offer. Sudiksha is now hoping to develop one million preschools across India based on a new curriculum that children can actually enjoy. Many of these new chains of schools (including Bridge International Academies in Kenya and Omega Schools in Ghana)are also adopting a ‘Pay as You Learn’ model whereby parents pay each day on or on a regular basis thereby making the schools much more affordable to those who need it the most.
In Zambia a different innovation has emerged under the brand name of iSchool, Zambia. This for-profit company offers a comprehensive online multi-media eLearning package which covers the whole of the Zambian school curriculum, including both lesson plans for teachers and interactive learning for students. Schools can purchase the ‘iSchool in a Box’ package which provides all the resources necessary to make full use of the materials, including laptops and tablets for staff and children, secure storage, power supply, internet access, teacher training, mentoring, and technical support. Schools can either opt for the iSchool Plus+ package or iSchool Lite. The iSchool Zedupad is also now available on the high street and iSchool Apps are being designed as we speak. The average cost per pupil is approximately $10 per child per term or £18.75 per child per year.
The emergence of these new inclusive business models across the developing world is also relevant to the future development of education in the UK, for the rate of innovation being experienced in these markets is both rapid and potentially very disruptive. This is because to make products and services affordable to the poor, significant and not piecemeal innovations are required. Furthermore, the lack of government intervention and control in some education sectors is providing a conducive environment for the rapid experimentation of numerous different innovations.
A relevant example is mobile education – enhancing educational outcomes using mobile technology, which is still in the very early stages of development in most schools in the UK. However, in a 2012 report by GSMA and McKinsey, the global market for mEducation products and services is already estimated to be worth approximately $3.4 billion and is expected to dramatically increase to $70 billion by 2020. For example in the Philippines over 500 schools are experimenting with a program called Text2Teach which uses Nokia’s Education Delivery (NED) technology to deliver video content to teachers via their mobile phone. The phones are then connected to TVs in classrooms thereby allowing schools in remote places to access a locally-developed content. Another mEducation innovation is Tutor on Mobile (TOM) which connects people who want to learn and acquire knowledge with experts in India through their mobile devices. Developed by Tata DOCOMO with technology partner Voicetap Technologies, it is a ‘knowledge marketplace‘ that encourages the sharing of knowledge, and provides an opportunity for people to earn money at the same time by providing learning content.