Tuition outsourcing, the next wave

New Delhi/Chennai: Skilled manpower in India is a major attraction for foreign entrepreneurs to set up operations. Now, Indian entrepreneurs are latching on to the very people who give India its skilled manpower – namely, skilled teachers.

Tuitions outsourcing is an opportunity that beckons India. Several countries are turning to providers who directly, or through their Indian arm, employ teachers for tutoring through the Internet.

And it’s not a small ripple. Analysts estimate the market for tutoring for competitive examinations in the US at $20 billion, while the education market itself is pegged at about $800 billion.

“Various education processes are being outsourced within the US,” said Satya Narayanan R, Chairman of education service provider Career Launcher. These typically include curriculum design, academic pedagogy, content development and actual delivery.

The US, which has always been at the forefront of innovation, is likely to be the biggest consumer of these services.

“The US President, George Bush’s main plank has been the No-Child-Left-Behind plan. The goals for this set by the administration is directly linked to outsourcing of education services to private entities within the US. As they are hard pressed to generate resources to deliver on the promise, one may see a massive thrust on outsourcing outside the US, over the next 12-18 months,” Narayanan said.

The billing rate for a US education service provider (ESP) is about $25 an hour, while in India it is $12. Considering that the cost to Indian service providers is only about $8-9 an hour, there is a whopping 22-25 per cent margin for the Indian players.

For Career Launcher, the focus areas in the US are law school entrance examinations and the GRE. It also provides tutorial services in mathematics and science for students of grade 8 and 9. It has 10 tutors for the US market and plans to scale this to 20-25 by the year-end.

The delivery model is user-friendly. Students are allotted windows that they log into at scheduled timings. Both the teacher and the student view the same screen and communicate with each other.

A Chennai-based company, which did not wish to be named, said there were opportunities outside the US too. It sees business potential in coaching candidates appearing for IIT JEE.

“Indian immigrants know the value of education at IIT and would like extra coaching for their children for IIT entrance exam,” it said.

The company has developed a module for its teachers to learn the nuances of English, while communicating with students overseas.

“These modules can also be resold to students within India,” it said.

The chief of the company said the average age of its tutors is below 25. Its staff strength is around 150.

West Asia, the US, the UK and countries to the east of India are all potential markets, she said.