Edtech's learning disability

A self-regulatory forum meets the problem only halfway

Over the past few months, the celebratory tone in the booming edtech market has been muted by growing reports of business malpractices. At least one unicorn was forced to pay a customer compensation for misleading advertisements. The government’s advisory to consumers about edtech malpractices in December concentrated minds in the industry to the possibility of state intervention, which could well end the gravy train. In January, the India EdTech Consortium was set up to create and follow a common code of conduct. All the big-label names have signed up. The code covers ethical sales practices, marketing communication, loan practices, and refunds. A two-tier grievance redress mechanism has been created.

This is a shrewd move, not least because the edtech business is, by nature, far more commercialised than the broader private education sector, though the latter appears to be catching up fast. Edtech in India started out as a moderate business proposition to meet the demand for technical and management education and as a supplementary tuition service. Operating outside the purview of oversight, it adopted all the razzmatazz of consumer marketing that had less to do with academics and more to do with brand building: Advertising and “rating” teachers, sponsoring popular events, publishing fulsome referral ads of doubtful provenance, organising loans, and following the time-honoured malpractice of the financial services industry by publishing relevant information (such as refunds) in small print.
 

As long as the edtech industry remained a sideline to the vast and profitable brick-and-mortar private education sector, it remained under the radar. The pandemic proved the inflection point. The closure of schools and the failure of the government schooling system in particular to adapt to the demand for online learning created a gap in the market for edtech to fill. The closure of schools during two years of the pandemic saw funding in the edtech sector rise from $500 million in 2019 to $4 billion in 2020 and over $6 billion in 2021, yielding no fewer than five unicorns. Much of the money has been raised in the K-12 (kindergarten to class 12) segment. India accounts for 37 per cent of the K-12 edtech start-ups set up globally since 2018. This naturally changed the game, drastically. From reasonably sophisticated and well-off urban consumers seeking higher education services, the market shifted to rural, semi-rural, and urban low-income families, for whom access to basic education remains an expensive proposition. These are segments that edtech companies have focused on to compensate for the diminishing Covid-19 bump and, inevitably, have been at the receiving end of less than transparent marketing practices, which eventually prompted a government advisory.

Though a self-regulatory standard-setting body is a step in the right direction, it can, ultimately, meet the problem only halfway. Self-regulation in India has had mixed success; it operates with some efficacy in advertising and far less so in the media, but failed miserably in microfinance. Without penalties for transgressions — consumer courts are largely inaccessible to most — the edtech consortium is unlikely to deter fly-by-night operators from preying on the vulnerable. The consortium has written to the government, informing it of the creation of this self-regulation body but the education minister has responded that it would continue to keep an eye on the sector. This is a wise decision.