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Aug, 2020     

Online Higher Education & Lifelong Learning – 10x growth potential – a ~$5Bn opportunity

The gross enrolment ratio (GER) for higher education is a measure of the number of schoolchildren who go on to become undergraduates (UG), postgraduates (PG), or diploma holders. India currently has a GER of 26% for tertiary or college-going students, far behind USA (~86%), Russia (~82%), and China (50%). The NEP 2020 stated its ambition to achieve GER of 50% by 2035.


1. Higher education enrolments is expected to grow at 6% CAGR as implied by government targets

GER (Gross Enrolment Ratio) in Indian higher education stands at ~26% in 2020, lagging substantially behind other nations

Gross Enrolment Ratio (GER)1 – by Country

GER %, FY 2020

Note:

Gross Enrolment Ratio here refers to the ratio of total enrolment in higher education to eligible official primary school-age population of a country.

Expected Growth in Student Enrolment in Higher Education

no. of students, Mn, FY 20 – FY 35E

Online education will play a critical role in enabling the 50% GER objectives

The gross enrolment ratio (GER) for higher education is a measure of the number of schoolchildren who go on to become undergraduates (UG), postgraduates (PG), or diploma holders. India currently has a GER of 26% for tertiary or college-going students, far behind USA (~86%), Russia (~82%), and China (50%). The NEP 2020 stated its ambition to achieve GER of 50% by 2035.

As NEP 2020 enables demand by creation of academic credits bank and allowing multiple entry/ exit points, online education will play a critical role in enabling necessary supply for achieving 50% GER objectives.

2. Additionally, The Lifelong learning market has got a further push after Covid, as the economic uncertainty further establishes the need for continuous learning

High use case for lifelong learning exists..

..and Covid has provided a further push amidst macro-economic uncertainties.

Several Macro Trends (Skills getting redundant plus high unemployment and skills gap) coupled with Covid has put a new urgency to the need for continuous learning in order to stay relevant.

Areas such as automation and macroeconomics are undergoing constant change, which consequently affects employment prospects. Thus, the need for lifelong learning is now being felt more acutely than ever before.

Lifelong learning is now seen as a must, to futureproof oneself, as automation becomes a norm, rather than an exception.

Several Macro Trends (Skills getting redundant plus high unemployment and skills gap) coupled with Covid has put a new urgency to the need for continuous learning in order to stay relevant.

3. To summarise, Online Higher Education & Lifelong learning market is poised to grow ~10x over next 5 years to reach ~$ 5 Bn by FY 2025…

The overall online higher education market will benefit from the new reforms set forth, including the increase in public spending (targeted at 6% of the nation’s GDP)…

Overall Online Higher Education & Lifelong Learning Market Size
USD Mn, FY 20 – 25F

Notes:

  1. Includes sales by EdTech firms in India and B2C (direct to consumer) sales only; excludes revenue from international geographies by EdTech firms and any institutional/ B2B sales.
  2. USD 1 = INR 70

..along with other accompanying macro economic factors.

Online opportunity in higher and lifelong learning, stands at an inflection point, poised to benefit from tailwinds caused by Covid, regulatory developments, coupled with increasing need realisation and willingness to try online lifelong learning offerings.

As government set ambitious targets to double the enrolment in higher education, online offerings will play a critical role in enabling supply, innovation and democratising access to education.

The overall funnel expansion for higher education coupled with increasing adoption for lifelong learning sets the sails for EdTech – poised to grow ~10 times to reach ~$5Bn by FY 25.