Discounted cash flow in corporate finance defines the contours of corporate valuation and the fundamental concept that drives it is the time value of money. The crux of this valuation lies in the unquestioned belief that the financial value of an underlying asset is the present value of the future cash flows that the asset can generate. The propensity of cash generation is directly proportional to the potentiality of demand in products and services of the corporate asset. Likewise, the socio-economic value of a nation is undoubtedly the present value of its future educational outcome.
The enrichment of this value lies in the growing demand for education, especially in populous economies like India. Not only is the Indian demographic dividend a good sign of such value maximisation but also is the psychographic trend which is best captured by one of my senior fellow academics in his characteristic humour—The demand for education for kids will always be higher in India as housewives always want their kids to be more intelligent than their husband and strongly believe that formal education is the solution! It is going to be a problem of plenty which shall still build an ‘education as usual’ scenario even as we begin to enter the post-pandemic phase.
The demand for all forms of education, its delivery and the end-user will shape the global economic outlook in which India’s presence is significantly huge. Though China may emerge as the largest economy in the world by 2050 commanding a 20 percent share of global economy, India will be a proud second with almost a 15 percent share (based on GDP at PPPs). The shift in learning outcome from mere enrolment shall also increase the value of this upside economic growth from an education attainment perspective. The big drivers of such value addition shall be China, India, Indonesia, Nigeria, Brazil and the USA, which shall together be responsible for 80 percent of the global demand for education by 2050.
The organic demand for education with its embedded intrinsic value pushes educational policy landscape to unchartered territories that cannot hold education in an “as usual mode” but shift to “next-gen mode”. As India prepares itself for the next-gen mode through its NEP 2020, it cannot afford to be a misguided missile but a mission driven outline that preserves the foundational value of education that is not washed away by strong tides of policy popularity, for popularity comes with no invitation and leaves with no farewell.
UNESCO’s International Commission on Futures of Education in its recently published nine-ideas for public action in post-pandemic education has strongly advocated the need for preserving the socio-physical education space and the supportive role of digital assets. Education needs to be the hybrid bridge that connects real-time and digital ecosystems in the emerging ‘phygital’ model. The screaming headlines that the future is online can at best increase valuation of EdTech companies and deliver marginal value. No doubt, there is inherent value in the ‘phygitisation’ of education but to generalise the models of engagement assuming online as a substitute for face to face puts real education at risk. The convergence of various dimensions that characterise the boundaries of all levels of education makes the engagement models interesting for a complex and diverse ecosystem like ours.
To support the next multi-decadal demand-driven growth in education, there is a compelling need to make educational policies a transformational instrument and not an aspirational statement. The key influencers—global trend, regional socio-economics, domestic regulation and open-source innovation—need to transcend all levels of school, higher and vocational education.
The biggest danger in the implementation of NEP 2020 is the excessive inflating of the policy bubble which will only burst as it moves higher. Such policy bubbles that are inflated by intellectual paratrooping need to be conflated with in-service footsoldiering that is rooted to ground realities. A blended approach of this type holds the key for uncorking the true value that lies in the hidden stores of India’s educational edifice. We are at the crossroads of an epoch policy that has eternal value and to arrive at the right present value of such a policy asset, a phygital edifice plugging the leaking orifices is the need of the hour.
vaidhya@sastra.edu