Philanthropy and profit making are poles apart. Then how can education, considered for long essentially a philanthropic activity or a service to society, become a symbol of entrepreneurship?
For anyone hunting for answers to this questions, the best place to look for is Namakkal district in Tamil Nadu. In a span of about a decade, Namakkal region has become an educational hub in the State, probably lagging behind only Chennai and Coimbatore in the density of professional educational institutions. With the government slowly reducing the scale of its involvement in many activities such as health care, education, and transport, the entry of the private sector in these spheres has been a great boon.
The opening up of the Indian economy and the exponential growth of the knowledge-based industries such as IT, BPO and even law, apart from the manufacturing industries, has led to a huge demand for professional education. And with the students being assured of jobs even before they come out of the educational institutions, there has been a scramble to start institutions of higher learning.
The fallout of this is visible in Namakkal region. With the institutions churning out students in their thousands every year, the overall economy of the region has received a tremendous boost. First, the institutions themselves employ close to 4,000 faculty members who are paid well. Their spending in Namakkal and neighbouring areas has helped the economic development.
The people who own land in the belt have seen the value of their land holdings, much of which is rain fed, soar — from a few lakh of rupees an acre just a decade back to even Rs 2 crore now.
But the most significant impact has been the overall economic development of the families from which the students hail — students from humble backgrounds find that living standards get a huge boost once they secure placements in good companies, mainly IT firms.
Mr V. Natarajan, Chairman, Paavai Institutions, Namakkal, which runs a string of educational institutions including four engineering colleges, said in mid-1980s a good number of competent government higher secondary school teachers took tuitions in Rasipuram. These classes were much sought after by the students as it helped them score high marks in the Plus-II exams, enabling them to secure admissions in premier professional colleges. His advice to the teachers as their financial consultant (Mr Natarajan is a professional Chartered Accountant), when they had some problems, was to start schools that had only Plus-I and Plus-II. Such a junior college system was not in existence in Tamil Nadu then.
A break came when an industrial group was permitted to start a vocational school with limited classes. In Rasipuram around mid-1990s, a school with higher secondary classes alone came into being. This sowed the seeds for an educational revolution that has swept the Rasipuram-Namakkal-Tiruchengode region ever since with teachers in other regions starting schools based on the Rasipuram model. As the people are hardworking and quick to seize an opportunity, this ‘educational entrepreneurship' culture has taken deep roots in the region.
Mr Natarajan said in the Salem-Namakkal districts, there were around 36 engineering colleges and approximately 15,000 freshers are admitted every year which put the total strength (for a four-year BE course) at about 60,000 students in engineering courses alone in the belt. The number of engineering graduates coming out of these colleges annually is around 15,000. The number of teaching staff in them is around 4000 and the supporting staff could number 6000. There were about 15,000 employed indirectly in the professional institutions.
It is probably the Kongu region — comprising Salem-Namakkal-Erode-Coimbatore districts — which has seen such an intense growth in higher education all in the past 15 years.
Referring to the student profile, he said about 50 per cent of the students were from the region, 10 per cent from surrounding districts, 25 per cent from Kerala and 15 per cent from the North. ECE and Mechanical Engineering were the most sought after courses.
In Namakkal region, campus recruitment could be around 60 per cent, though in select colleges it could be higher. The problem was the lack of communication skills because of the predominantly rural background of the students, despite their very impressive academic performance. To improve the language skills, his college has made the students to read The Hindu to improve the vocabulary of the students.
Classes in association with British Council are being conducted and teachers are made to write the British Council exams to gain command over English.
Mr Natarajan said the male-female student ratio was 60:40. Though among the faculty this ratio was reversed since women prefer a stable, high paying job. The pass percentage was usually high — in his own group of institutions it was around 96 per cent — and about half of the students were from lower middle class families.
Commenting on student dropouts, he said in his own institutions, it was less than 1 per cent. But the average drop out across the region could be around 5 per cent. This was because students who find it difficult to cope with the subject or the medium of instruction may drop out or the inability to pay fee may be a reason.
He said the educational revolution has helped the downtrodden to come up in Namakkal belt. In many households it is the first generation students who have enrolled for professional courses and this helped in the family's economic development.
The growth of educational institutions has also seen land prices zooming. When he started his college 10 years back at Pachal on Salem-Namakkal road, an acre had cost Rs 7 lakh. Now it costs Rs 2 crore an acre.
He said a significant impact of the educational revolution has been on household income. A survey of the alumni of Paavai group of institutions had shown that its old students were present in 33 countries. If this was the case of a single institution, then the number would be mind boggling if the statistics of all major institutions are considered. That some of the groups had multiple institutions was a proof of the quality of education they provided.
Mr Natarajan said the healthy competition among the educational institutions has also resulted in high quality infrastructure as the promoters have ploughed back into the institutions whatever revenue they had generated. He did not see any dichotomy in his description of the region showing proof of ‘educational entrepreneurship'.
The private educational institutions have lent a helping hand to government's efforts in promoting social advancement by making professional education available to a large section of the population. They did not have profit as a motive and hence were different from businessmen in so far as entrepreneurship was concerned.