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Schooled for growth
Why big businesses must invest in education at the grassroot level
Miniya Chatterjee : Tue Nov 06 2012, 02:27 hrs
Investment in education in India is best described by a John F. Kennedy
quote: "There is a lot of noise on the stairs but no one is in the room." A
recent Unesco report revealed that the millennium pledge made by leaders
across the globe, that all children should have access to primary education
by 2015, will not be fulfilled. After an initial surge, no one was ready to
do anything about it. In India, education has been driven by the government.
The number of children not going to school went down from 20 million in 1998
to 2.28 million in 2010, which is a noteworthy achievement. But increasing
literacy is not enough. A fast growing economy needs young people to be
educated in such a way that they can make responsible life choices, get the
right jobs, and lead communities toward positive change. So who will educate
Big businesses will have to be brought on board too, as there is a need for
models that focus on returns. When for-profit investors fund solutions, they
seek good returns on their investment. Returns-based models will ensure that
education is oriented towards jobs, leadership and change. However, the risk
is that to deliver those returns, businesses will cater to the largest
possible market, which is mostly urban and suburban. They may also engage
only with communities where their operations or products could have a
market. In doing so, businesses may accept a mediocre impact and miss the
great value that lies at the bottom of the pyramid.
It is fantastic that non-profit organisations often aim for deep impact.
However, my experience as founder of a non-profit organisation has been that
we are no good at providing long-term systemic solutions on our own. This is
because in the development sector, money is often project-based and not
self-sustaining. We are not part of a "system" so we can be creative, but
that does not give us the framework to carry on the good work. The risk of
relapse is high.
Shaping the next generation of corporate and political leaders from all
walks of society will require a multi-stakeholder approach. Especially in
recent times, we have seen social tension disrupting markets and economic
opportunity. The growing mismatch between skills and opportunities, in a
country with a growing population that is learning to cope with the new
global economy, is worrying. The government, civil society and the private
sector should work together to educate the Indian youth.
The second question is then the challenge of how to do it. In India, it is
not a lack of resources for investing in education. Nor is there a problem
of scale, thanks to technology. The challenge is one of culture. Business
houses in India will gradually have to take a lead role here, and to do so
they will have to tweak their operating culture.
Big businesses need to realise that the historically strong government
control over education is receding. They must search for their place in a
sector that has the potential to attract $100 billion in investment over the
next five years, according to a recent KPMG report. While investing in
education geared to create individuals who will contribute to the economy,
they need to look beyond merely addressing illiteracy. In the process, they
might have to abandon corporate social responsibility programmes that
sometimes aggravate social problems by providing short-term solutions. For
any substantial investment in time and money, a public company would need to
act in the interests of its shareholders. So business will have to keep in
mind the market incentive to invest in education towards change. In a
multi-stakeholder approach, businesses can partner with non-profit
organisations for creative ideas, and with governments for scale and
experience. Businesses must focus on nurturing talent at the grassroot level
and tackle the challenge of reaching out to economically under-privileged
Why should big businesses educate the bottom of the pyramid? Because they
will realise that while the deepest malaise lies in India's underprivileged
communities, the greatest untapped opportunity can also be found there.
Investing in education with a focus on the returns these communities will
bring to society will ensure a sustainable model of socio-economic growth.
The economic multiplier of bringing in this section of India's youth into
the economic mainstream is enormous. Creating leaders among them will also
contribute towards creating a more equitable society. These are just some
examples of the total returns of such an investment.
The writer is senior manager and global leadership fellow at the World
Economic Forum and started, The Stargazers Foundation,