Our most recent Galaxy of Leaders panel discussion hosted on October 7, around the topic of Accelerating Transformation within the Education Industry, featured an international panel of prominent experts from the sector. The panel shared their experiences and views regarding the future of an industry essential to society’s development.
Led by a global team of Kingsley Gate Partners consultants, the event began with the panelists’ introduction. The virtual discussion was moderated by John De Blasio, President of DT Global, and featured Col. Gopal Karunakaran, President of Shiv Nadar University and CEO of Shiv Nadar Schools, Frederico Brito, the Co-Founder and Managing Partner of Teman Capital, Javier Rodríguez Zapatero, the Executive President, and Co-Founder of ISDI and Neel Broker, the President of Cintana Education, Asia Pacific and former CEO EMEAA of Laureate International Universities.
It is essential to start by emphasizing that the education industry currently has a turnover of $60 billion, with an estimated growth that will turn it into a $100 billion sector by 2030. Beyond these attractive development rates, the need for acceleration in implementing new teaching models linked to technological innovation, which will give rise to an unprecedented revolution in learning experiences, further increases, if possible, the interest of many and varied economic and social stakeholders in the sector.
John De Blasio began the discussion by introducing the new paradigm of education, referencing the internationalization, digital transformation, and the increasing bet of private equity firms to seek investments in the space. The relevance of this industry as a driving force of social and economic development was made clear, along with the need to transform educational models, not only by way of technological development but also through a profound restructuring of the teaching and learning methodology and experiences, as well as by introducing structural changes.
Gopal Karunakaran started the discussion by stressing the role of education as a lever for the transformation of society. Regarding India’s specific case, he emphasized that the pandemic had caused, and speeded up, a radical shift in a widely diverse country over the last few months. Technology and edutech platforms already existed. Nevertheless, he explained that this unexpected situation had to occur for considerable changes to be implemented regarding access to education. As a result, new approaches and new strategies around education are now starting to arise.
Neel Broker continued the discussion by stating that structural changes that had not been made in the last 100 years have been implemented in recent months. He believes the bond between students and educational institutions has not disappeared in this short period. However, this link, which was fundamentally based on physical space or structure around which everything revolved, is now a mere optical effect. He also stressed that, although both teachers and institutions, even the most traditional ones, had adapted overnight to an online format, the learning experience that will define each is still to be established. This will be what sets the different brands apart. As a result, there will undoubtedly be winners and losers. In his view, the winners will be those who meet three key requirements: agile investments in new technologies, a global organizational structure, and a more flexible, courageous, and innovative attitude. Those who do not follow this path will have a challenging prospect and will lose market shares captured by other large institutions that decided to follow transformation.
These new and increasingly urgent challenges in the education sector certainly draw the attention of investment funds in permanent search of business opportunities. Frederico Brito, who has 15 years of experience in private equity operations in the education sector, said that all such relevant firms in Brazil had either already invested in education or were now considering to do so. Such investments allow one to enhance the digitalization, consolidation, and growth of the different educational institutions. According to Frederico, there are various aspects which make the sector attractive. Among others, he highlighted the industry’s high fragmentation, scale as a key to differentiation, the strict regulation of the industry and its resulting entry barriers, the strong resilience of the activity to adverse economic cycles, and its interesting margins.
He also referred to the weaknesses many of the sector’s main stakeholders have in common, such as structural and management inefficiencies and the unresolved issue concerning the physical, virtual or hybrid model that will succeed in the future. In any case, he believes there are three types of icompelling opportunities for private equity firms: investments in a global player, investments in regional players, and investments in niche players.
Later on, Javier Rodríguez Zapatero, the former CEO of Google Spain and Portugal, and a key figure nowadays in the transformation of education in Spain, insisted on the speed of the changes to which we are currently exposed in many aspects of our lives, and on the need to prepare society to face these changes. Based on the current lack of understanding of the new types of jobs the labor market will require by 2030, Javier wondered how to convey the necessary knowledge and educate society to acquire the essential competencies needed to face tomorrow’s professional environment. In his view, public education, particularly the European public education, which he described as “old,” cannot meet this challenge. According to him, governments must understand they must work together. We all have access to technology; however, our mindset and methodology must evolve to transform.
Therefore, it is evident that the exceptional situation we are experiencing has played a vital role in transforming the education sector. From one day to the other, educational institutions worldwide have introduced structural changes and revolutionized their teaching and learning methods thanks to technology. However, to consolidate the education industry’s transformation that genuinely allows us to support and encourage society’s development required to face the challenges of tomorrow, we need to move forward by implementing more radical changes. Many questions arise regarding the different stakeholders’ roles in this paradigm shift, from states to teachers and private equity funds.
Multiple questions arose toward the end of the discussion. We are in the process of having them answered by the esteemed panel and will be putting together a global paper encompassing their insights. This paper will be presented to you very soon.
At Kingsley Gate Partners, we are strong supporters of talent’s power as a critical asset to achieve success in business and, therefore, in society. As a result, we are committed to transforming education through technology, as the cornerstone of progress. We hope this process acts as a catalyst to universalize knowledge and learning. Until then, stay safe, and stay tuned to Kingsley Gate Partners for more updates from the industry.