K12 education segment is a hot spot among investors

India's education system is often reckoned as one of the major contributors to its economic development. K-12 school system plays a crucial role in understanding the ways of life, from the beginning till maturity. The rapid advancement has been noticed in education sector over the last two decades. Government and Entrepreneurs are investing their time and money to help make K-12 education effective. As per the Union Budget 2017-18, the education sector has pegged an outlay of Rs79,685.95 crore for the current year, which was Rs 72,394 crore in 2016-17.

Some questions that investor needed to be aware of before investing in K-12 education are:-

• What is the current market size of K12 industry?

The current K-12 school system in India is one of the largest in the world with more than 1.4 million schools and 250+ million students enrolled, reveals EY-FICCI report on the education sector in India. The K-12 segment is valued at $52 billion with a market share of 52%. The private sector already has a 25% market share in the K-12 education sector, with enrollments in the private schools standing around 31%.

• What does this industry lack?

According to the DISE survey, the percentage of untrained teachers is 54.91% in private, compared to 44.88% in government school. With the current pace of education spending and factors like shortage of quality teachers, India will take a whopping 126 years to reach standards of education at par with developed nations, according to a report by ASSOCHAM.

Number of private investments in the education sector so far in 2016 was 42, the lowest in the last five years, according to News Corp, VCCEdge. No wonder India still has 30% of unemployment rate in the age group of 15 -28.

• How to fix the problems in this industry?

Schooling system must go through paradigm shift by promoting creativity, original thinking, and changing from Rote learning to skill based learning strategy. Teachers must be hired on the basis of their skills to provide quality education.Investments by government and entrepreneurs can surely help toimprove educational facilities in K12 schools.

I personally believe that if you teach a man skill, you enable him for a lifetime. K12 education must focus on development of students skills as well as practical knowledge to make them market ready.

• Innovation in K-12 education

Classroom learning has moved beyond textbooks and blackboards. These days, there is an increasing focus on the use of digital, mobile, multimedia, smart tablets, audio-visual and experiential based study materials.. The e-learning market will grow at a CAGR of 17.4% till 2018, says a Ken Research Group report.. There is a tremendous scope in the edutech space, which is expected to cross US$70 billion by 2018 and is catching investors’ eye. K-12 school system starts using digital education, which helps them to increase awareness of new technology among students to cope up in the tech-savy environment.

K12 education industry has lot to offer for investors to invest and promote creative ideas for better future of India.