Location India India

Profiting from the Poor: The Emergence of Multinational Edu-Businesses in Hyderabad

Editorial note:

What is the place of schools in a deeply segregated society?

A recent report indicates a growing trend of private schools in places where either the state denies education or places where education is inaccessible because one is born into adverse circumstances – in a poor dalit family, in an unstable violent area, as a Muslim, or in hypermobile migrant families. In these situations the challenges are both access to education as well as the sheer contempt for the children who are trying to obtain as good an education as they can given their unstable  and precarious lives.

The Global Education Industry (GEI) has swooped into these spaces with the model of the low cost private school. The new school reform movement has spread across India, Ghana, Philippines, South Africa and the US.

We publish a recent report by Sangeeta Kamat, Carol Anne M Spreen and Indivar Jonnalagadda, which critically assesses the model of the low cost private school in the context of the city of Hyderabad. The report was made possible through funding provided by Education International,  and the authors are part of “a number of scholars [who] are working around the world to raise awareness about how and why education is being placed in the hands of corporations or “edupreneurs”, instead of educators and governments”.

Click here for the Full Report. [PDF, English, 2 MB]

Executive Summary of the Report

Over the last decade, education for the poor in the developing world has become an increasingly attractive market for global investors and multinational corporations. This movement, known as the Global Education Industry (GEI), is vested in setting up schools for profit. It presents private schools as the best alternative to public schooling and possibly the only alternative to universalising access to education in developing and emerging economies. Among developing countries, India is almost always underscored as an education market ripe with potential and profits.

This report about the GEI in India lays out the broad underpinnings of the corporate interests in for-profit education and how these efforts undermine public education as a fundamental human right. It provides a detailed understanding of how the commercialisation of education through scalable chains of schools and selling educational products and services unfolds on the ground in Hyderabad. This study of the expansive and growing private education sector in India revealed a complex well-networked assemblage of global actors that are invested in the business of education privatisation and who stand to make a considerable profit from it.

Two actors that stand out as having launched the low-fee private schools (LFPS) ‘movement’ in India are James Tooley (Professor of Education Policy at Newcastle University, UK) and the global corporation, Pearson. But there are a host of other actors and institutions including, for instance, the World Bank and the UK’s Department for International Development (DFID), think tanks and foundations such as the Bill and Melinda Gates Foundation and John Templeton Foundation, an assorted number of venture capitalists, big corporations and small-time consultants. This report critically assesses these multinational actors’ claims to make schooling for the poor profitable while simultaneously promising quality education.

It demonstrates that, despite expectations, the schools have not been profitable and they have also failed to deliver anything close to quality education. The authors also predict that a number of local school proprietors who have been active in this sector for decades may actually be forced out given the growing push towards international school chains (like Bridge International Academies) which offer economies of scale through standardisation and technology.

This report begins by tracing the evolution and trajectory of low-cost schooling and the expansion of the educational service industry with a focus on the education tech/digital learning sectors in Andhra Pradesh (AP) and Telangana, India, and particularly Hyderabad. The focus of the study was to understand:

How are locally run and owned schools being constituted into a market that is attractive for big capital. Who are the actors and what are the processes and practices that go into ‘market making’ for schooling for the poor?

What are the implications for the right to quality education when low-fee private schooling is presented as the be and only option for the poor? What are the implications for the teaching profession and public education as a whole?

The findings are drawn from research interviews with school proprietors, teachers, teacher union leaders, technology industry entrepreneurs, journalists and government officials conducted in Hyderabad from September 2015–January 2016. Below is a summary of the salient issues related to the crisis in education in India and the emergent role of global capital in schooling for the poor, and lastly, proposed areas for wider public engagement and action.

Key findings of this research suggest

  • Private for-profit multinational corporations are making billions of dollars by charging poor families around the world to go to school. Governments are diverting significant funds and attention to what global corporations have posited as ‘the solutions’ to the crisis in education, loosening regulations or outright ignoring the many violations of laws and standards by multinational companies. Governments are guilty of inviting companies in to run large segments of the education sector (from pre-school through university level).
  • Government-funded schools have suffered from decades of disinvestment and neglect, creating a mass exodus of working poor and middle class from public schools and leaving the poorest and most vulnerable behind. User fees in education exacerbate inequality and lead to more social stratification. Importantly, this lack of government investment in education has opened the door to privatisation. The authors call on readers to critically examine the neoliberal discourse of ‘failing government schools’ that has been embraced to justify ‘low-fee private schools’ in India and instead look at the compounding factors that have led to the decimation of public education. This neglect has resulted in an ironic situation where the LFPS rely on a low-paid and overworked labour force of unqualified women as teachers, while the government schools have a roster of qualified and well-paid teachers with no students to teach. This situation in turn has been further used by pro-privatisation corporate reformers to justify the shutting down and neglect of public schools, particularly in impoverished neighborhoods.
  • Unique to Hyderabad is the existence of many small private schools in the predominantly Muslim area of Old City – some that were started decades ago by local proprietors to serve the communities’ needs. In the late 1990s, these schools were identified as sites of scalable markets of LFPS, first by James Tooley followed by a slew of global multinationals. Yet, despite the rapid growth in the private education market (70 per cent of schools in Hyderabad are private), efforts to scale-up and increase profitability of their ‘home-grown’ local LFPS have not been successful. This has been due, in part, to parents’ financial constraints and lack of outside investment but also the Right to Education Act (RTE) of 2010.
  • Frustrated by the legal restrictions imposed by RTE and the slow growth in the LFPS market, global investors and multinational corporations have sought to create new markets in unregulated and high-demand areas such as early childhood education and coaching or tutoring centres. These sectors serve the aspirations of the working and middle classes who view access to private schools and university as the window to social mobility, and these sectors have proven to be highly profitable. In addition, large-scale international charter chains of low-fee schools (such as Bridge International Academies) are being introduced in the region by state government. This will undoubtedly decimate the existing local LFPS market and continue to undermine public schools and the RTE.
  • The location of a very strong information technology (IT) industry in Hyderabad offered the ideal conditions for the development of a vast edu-solutions industry that could provide products and services to both the private and public school sectors. This sector relies on standardisation (e.g. developing large-scale assessment systems, creating online curricula and training software); using untrained teachers at very low wages; and predatory product and school placement, along with aggressive marketing strategies. Instead of improving education, providing much-needed capital or investing in education for the poor, edu-solutions providers sell their products and services, offer high interest loans, and advise local entrepreneurs on how to become more profitable and scale up. AP/Telengana are fast emerging as a laboratory for the GEI to incubate and develop commercially profitable education products and services that will be bought and sold outside India.
  • Within Hyderabad, an extensive network of multinational corporations, private foundations, consultants, non-government organisations (NGOs), and local entrepreneurs are building what they term an “educational ecosystem” to support the commercialisation of all aspects of education. Pearson, the world’s largest multinational education corporation, has been at the forefront in creating this ecosystem in Hyderabad. This report describes how this ‘ecosystem’ operates through spreading and advancing market ideology in education. This approach also incentivises government investment into the private sector through public-private partnerships and purchasing technology solutions for (not only curriculum and training materials but) data-based management and decision-making, assessment, monitoring, and accountability. The report also describes the building of market logic locally by teaching school proprietors to “think like an entrepreneur” through corporate training camps, overseas fellowships, crowd-sourcing ventures, and edupreneur meet-up events.
  • The GEI has also been ifluential in shaping education policy in India. To the edu-solutions providers, “results are important” – and their success lies in generating data to show that students are learning (and at a higher rate than their competitors, the public schools). To do this, they increasingly rely on the tech-solutions to create their own assessments, ratings systems, and other measures that show how well they are keeping up their market demands. The GEI is also increasingly involved in writing its own rules about school standards and regulations, determining and certifying teacher quality, and defining what learning should take place in schools.
  • Claims made by the advocates of LFPS of reaching the poor and providing quality education are unfounded. The authors found a general lack of external evidence to support the private providers’ claims of better quality and outcomes.
  • The privatisation of education (in all aspects) undermines the RTE Act 2010, further encouraging separate and unequal education for the poor. It also leads to teacher deprofessionalisation and exacerbates inequality across gender and class. This study highlights the urgent need for the revitalisation of and reinvestment in government schools, as well as greater support for teachers and professionalisation of teaching.
  • There is an equally urgent need to stop the rampant commercialisation of education and profit-seeking of multinational corporations. The growth and encroachment of the global private education industry must stop. This study should serve as a serious reminder of the reasons why schools should not be for sale and multinational corporations should not be permitted to make profits off of governments and poor communities. This is clearly explicated in the RTE legislation as well as international human rights law.

It is hoped that this report’s findings and recommendations will be useful for government leaders, teachers, unionists, scholars and education activists who are concerned by the rapid privatisation in and of education in India and across the world. We hope these findings will be used to mobilise public opinion and advocacy to raise concerns about private schooling for the poor, especially as it relates to possibilities and protections in India’s RTE Act. We encourage continued dialogue amongst advocates, and organised resistance to the GEI’s damaging march across India and the rest of the world.

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