FDI in Education
Posted by g.e. on October 7, 2006
An article on BW throws up some interesting stats on higher education:
Around 150,000 students are currently studying in the U.S., Britain, Australia, and elsewhere. An additional 100,000 depart every year to pursue foreign degrees at a cumulative cost in tuition and housing of about $4 billion on average every year.
Some 60% of India’s 1 billion-plus population is below the age of 25.
In the 17-to-23-year-old age group, only 11% (or 10.5 million students) sign up for higher education. Compare that to other developing economies: 13% in China, 31% in Philippines, 27% in Malaysia, and 19% in Thailand. New Delhi’s annual budget for higher education is $2 billion, or 0.37% of GDP, which also lags most other countries in the region.
Right now the picture isn’t promising. India’s educational system in rural areas is in desperate need of investment. Nationwide, only 15% of the 200 million-plus student population makes it to high school, and only half those students actually graduate.
And on market demand:
A study last year by McKinsey concluded that only 25% of India-trained engineers and 15% of the system’s finance and accounting professionals had the skill set to work for a multinational company.
McKinsey and the India IT industry group Nasscom have estimated that India has the potential to grab 50% of the estimated $110 billion global outsourcing market expected by 2010. But it will need a quality workforce to do so.