Monday, March 16, 2009

Day 2 in Delhi: Meeting with Industrialist and Education Entrepreneur Vinay Rai

Yesterday we met with the world-renowned education entrepreneur Vinay Rai.  Mr. Rai graduated from MIT in 1970 and went on to become a successful industrialist.  In the late 9s, he retired from his work and decided to use his riches to drive improving education in India through his organization, the Rai Foundation.  He now runs 16 schools with nearly 9,000 students.   

The following notes pertain to a discussion we had with him regarding a specific topic that we are working on with him, the creation of a professional education system catering to the needs of Indian villagers.  Please feel free to chime in with any ideas you ight have on how we can make this model work.  

Problem Statement: Mr. Rai believes there are 3.5 million plus people who are college graduates who are not employed or severely unemployed in villages. The undergraduate curriculum at the government-sponsored schools is 40 to 50 years old, and the faculty is not that strong. As a result, the employability of graduates from these lower tier programs is poor to none. The industry is crying that they don’t have good people to employ. Jobs are available here for people with basic skills – but many don’t have them. Many feel demotivated because they have studied a lot but really don’t have the skills to be employed.
One of the core goals of the program is to give them the first level basic skills and knowledge to make them employable. The existing curriculum does not link up with practical needs. Soft skills and personality development need to be provided as well. These are very underdeveloped in India.

We discussed this as a team and we will do a gap analysis of the current state potential village business school student and the needs of potential hirers as determined by our market research and interviews.  

Cost: 80,000 rupee in the village, 6x that minimum would be the cost in the city, and that’s not including the city. Low-cost online MBA can be 30,000 to 40,000 rupees with almost no contact. The industry knows the difference. Between these and pay accordingly. Starting salaries after graduation can range from $1,000 to $40,000.

Loans: Students would be able to get a full loan. We need to work with banks, but it is not a problem to do loans fewer than 400,000 rupees. No collateral is necessary. The rates would be 9 to 10%. Just a few years ago they were 20%. Mr. Rai reiterated that Indians are very risk averse.

Facilitator Model: The village business school will use facilitator model – people who speak the local language who can translate the curriculum when necessary. Even if we transmit the classroom live, they will not be able to understand all of it so the facilitator is necessary.
Corporate Interface: The village business school is considered a Corporate Social Responsibility initiative. Just spoke to MD of Microsoft India’s CSR. Microsoft will be willing to support them if the project is right. The concept needs to be good and relevant. CSR budgets are large but companies don’t know what to do with it. Multinationals are interested because they want to get trained manpower in the villages to capture market share.  

There is currently a major disconnect between industry and students. But companies need  talented employees in the villages to execute their business plans. 

Operating Model: Mr. Rai felt that e-learning has not worked in India. It has to be hands-on, hence the facilitator. You must have a physical space. How do we bring some sense of quality here? Good faculty will not go into the rural area to teach. The operating model must balance engagement with faculty with cost. Creating credibility will be a major issue with a partially virtual model.  

There is already a lot of cynicism about the quality of the program. We must make sure we do not overpromise and under deliver.

Do we provide them with a laptop? That can go into the bank loan. We must consider this.
There is no formal accreditation facility in India other than the government assessment.
Internet and electricity are major issues. Generators? Landline or wireless? These are among the decisions that must be made. Computer skills are generally quite low, no Internet cafes. Computer literacy is a paper thing. It’s not happening in the village, according to Mr. Rai. The laptop might be expensive, but it will help build computer skills, which is likely to be a pre-requisite of hiring companies. The lack of computer skills will also mean that a higher level of IT support will need to be provided.  

Women: Villages won’t sent daughters if they have men around. There is a lot of conservatism in the villages. Must be convinced that they are safe and secure. Differential pricing for the women is a possibility. 

Biography of Mr. Vinay Rai

Vinay Rai is an extraordinarily successful businessman who put the business world behind him and has moved on to become a prime-mover in higher-level education, a philosopher, and a philanthropist. After receiving a Bachelor of Science in Physics, with honors, from Delhi University, he attended MIT, where he earned a second bachelor s degree and a master s, both in engineering. At MIT he became an elected member of Eta Kappa Nu and Sigma Xi two of the most prestigious honorary societies for engineers.  While at MIT, he also took courses at the Harvard Business School. 

Vinay Rai comes from a business family. His father had built several businesses to a million-dollar enterprise by the late sixties. When he joined the family business after his years at MIT, he took over part of the family business, expanding and diversifying into steel production, computers and IT, mobile telecommunications, engineering, financial services, hotels, and more. By 1999 he was listed among the five richest people in India and appeared in the Forbes magazine listing of the 200 wealthiest people in the world. Of those years, he says, God was kind. During this period, he was active as a business leader, being elected by his peers as president of the Cellular Operators Association of India, the Indian Electrical & Electronics Manufacturers Association, and the Electronics Components Industries Association, as well as serving as Chairman or Executive Committee member of the most important national trade and commerce organizations- FICCI, CII & Assocham. 

In 2001, he moved on from business to where his true heart was: into education, working with young minds and changing and guiding them as they move forward to take on the world. He set up the Rai Foundation and under that umbrella launched an educational institution that now has some 8,000 students on 14 campuses across India, and soon opening in the Middle East and Africa. With the encouragement of his wife, he created a unique effort to improve the education of young women through a program called Girl Genius and Gifted Girl, which provides that any number of orphan girls and 300 girls from the poorest families are accepted every year to receive totally free higher education, including housing and food, and an ample clothing allowance, continuing, for those qualified, to a PhD. These are the potential stars of tomorrow, he says, and to see them flower is pure joy. He is in addition the founder and chairman of the Rai Foundation and several philanthropic trusts, dedicated to empowering rural women, promoting ancient arts and culture, promoting applied research for rural areas, supporting health-related issues, and encouraging the aspirations of young people. His previous book, Rethinking India Towards an Indo-US Partnership Concord, was published for an Indian readership. This year his latest book, Think India - The Rise of The Worlds Next Super Power and What It Means to Every American" was published by Penguin-Dutton USA. Vinay Rai s journey has taken him from scientist and engineer, to business leader, to academician, to philanthropist and philosopher, and finally, he says, to an understanding of self.


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