strengthening the edupreneurship ecosystem in south africa 2015 - presentation
TRANSCRIPT
Prepared especially for Aspen Network of Development Entrepreneurs
March 2, 2015
By: Laura Tobar and Zoraida Velasco
“Strengthening the Edupreneurship Ecosystem in South Africa”
Research
Education ecosystem
in South Africa
...Day 1
Our Knowledge
Edupreneurs
Ecosystem
Meeting with experts
Reports
Stakeholders: What
they do and how
Interviews
Objectives
• Research • Frame the education context • Identify challenges and opportunities
• Event • Logistics • Content
• Publish research report • Benefit the ecosystem
Timeline Activity 19-25 Jan 26 Jan – 1
Feb 2-8 Feb 9-15 Feb 16-22 Feb 23 Feb – 1
Mar 2-3 Mar
Desktop Research: •SA’s Education system context •Mapping research: Identify key players and what they do •Sector top Challenges
Benchmark similar edupreneurship research/events carriedout by other
Qualitative research Site visits to entrepreneurs in the sector and potential partners
Event Organization •Venue Identification •Send invitations •Logistics
Wrap up •Collate notes •Find trends •Findings: opportunities and challenges. Knowledge sharing
Carry out the event
Methodology Two parallel complementing projects at once
Step 1
Re
se
arc
h
Eve
nt
Step 2 Step 4 Step 3
Education Ecosystem South Africa’s Education Context
Findings South Africa’s Education Context
Education System
Dysfunctional
Poor Quality Teachers /
Infrastructure
Lack of support
Expenditures
Source: Consciousness-Based Education Schools
Expenditure on Education, Source: Dalberg research on
education
39 44 55 69
127 146
152 164
166
190 207
233
0
2010 2011 2012 2013 2014
Total Public Expenditure on Education (Bill R)
4
2.9 3.2 2.9
5.6 5.7
4.1 3.3 3.7
6
Brazil Russia India China South Africa
Expenditure on Education as % of GDP
2000 2010
+43% +41% +3% +28% +7%
Source: Dalberg Global Decelopment Advisors. Research on Schools in South Africa.
Preliminar findings. September 2013
No
t a
va
ilable
in
form
atio
n y
et
CDE annual reports: Education as the best tool to empower people’s and community development.
Education Ecosystem Solutions
37 27 51
158 179
254
0-7399R 7400 -10499R
15000 -16499R
16500 -30499R
30500 -46699R
46700R+
ISASA Member Schools by Fee Range 2013
Challenges
• Lack of facilities and resources at many schools, large class sizes, inadequate teacher education, poor learner commitment and discipline, inadequate parental involvement • Positive or negative calling it “educational crisis”?
Low fee private schools • <7500R: Very low fee school (more than double than LFPS in India ~2000R) • Centralized administration offices to reduce costs • SA teachers are among the highest paid in the world • Strong emphasis on leadership and professional development on LFPS • Teacher opportunities in LFPS: higher quality professional life, altruism, greater curricular freedom, good school management, often with a strong values-base, more ‘teachable’ children and a more enabling environment.
• Reduce Costs • Recruit, reward and retain quality teachers and principals • LFPS save money to government: why not raise the subsidy? • Learners choosing to take the less demanding option of mathematical literacy instead of mathematics.
Source: CDE Report August 2013. Afforable Private Schools in South Africa
24
These schooling models are also tied to different funding structures as determined by government policy
School Classification Subsidies
Public Schools Government owned and run
Section 20 Schools• Government spends R 11,714 per year per child• These schools are quintile 1-3 schools and therefore cannot raise
additional funds through school fees
Section 21 Schools• Government spends R 11,714 per year per child• These schools are quintile 4 & 5 schools and therefore raise additional
funds through school fees set by the School Governing Body
Independent schools Independently owned and run
Registered Independent Schools
• Independent Schools, on application, receive subsidies on a sliding scaleof fees charged related to the Provincial Average Estimate per Learner(PAEPL), calculated for the year in question:
1. Fees of 0 to 0.5 times PAEPL 60% of PAEPL2. Fees of 0.5 to 1.0 times PAEPL 40% of PAEPL3. Fees of 1.0 to 1.5 times PAEPL 25% of PAEPL4. Fees of 1.5 to 2.5 times PAEPL 15% of PAEPL5. Fees above 2.5 times PAEPL Not eligible
Source: Dalberg Global Decelopment Advisors. Research on Schools in South Africa. Preliminar findings. September 2013
Funding structures determined by government Policy
CDE annual report: The quality, content and standardization of initial teacher education must improve
Developing the subject content knowledge and pedagogical content knowledge of student teachers
must be central to all initial teacher education programs.
The establishment of professional learning communities (PLCs) which facilitate peer- learning among
teachers are an important means of improving mathematics teaching.
Foundation phase student teachers need to be taught how to teach reading effectively.
Qualifying teachers must be proficient in the language of learning and teaching at a conceptual level.
Learning and teaching support materials and equipment.
Parental education programs to encourage and support literacy, reading and numeracy in early grades.
Edupreneurs Ecosystem South Africa’s Education Context
Strengthening the Ecosystem Phase 1 : Stakeholder identification
Education
Ecosystem
Edupreneurs
Government
Capacity
Development
Providers Investor
Capacity Development Providers
• Accelerators
• Incubators
• Attorneys
Investors
• Venture Capital
• Angels Investors
• Banks
Non-profits
• Charity
• Foundation
• Academia
• Trust
Government
• National
• Provincial
• Municipal
Strengthening the Ecosystem Phase 2 : Stakeholder interviews
The interviews were focused in 7 pre-identify key areas for edupreneurs
1. Finance Funds resources, investor interest and edupreneurs needs
2. Human capital Hiring and team building opportunities, skills and knowledge gaps
3. Policy/Regulatory environment How it influence and contribute to edupreneurs journey
4. Infrastructure and enabling technologies
Physical resources and tools available in the education space
5. Road to scale Main challenges in growing the business
6. School structure and curriculum Areas to improve or include
7. Market and demand Generalities and market stage
From there we identify areas of development, common challenges and opportunities in the ecosystem
ANDE Opportunity to strength the ecosystem and generate spaces for discussion to set an action plan: “Strengthening the Edupreneurship Ecosystem in South Africa”
Main areas Description
•Risk adverse: looking for proof of sustainability and success. Private • Strict loans requirements • Investors mainly looking for numbers: ROI, current
users/students, revenues. •Angel/Philanthropic investors are not organized by sector • CSI money: risky and unsustainable •VC network and patient capital is very limited in SA • Either grant (Charity) money or high ROI required Public •Misaligned government spending • Education as a human right: not a source of profits
The understanding mismatch between investors and edupreneurs makes financing the main challenge in the ecosystem
Outcomes Some edupreneurs end up creating complex hybrid structures to be able to get funds from the government and the private sector Personal network as (the only) source of funds: “we will invest in you, no matter the project” A perception that government money does not need to be paid back - often wasted Challenges and opportunities Investments access vehicles are not clear Equity involved benefits: increases commitment and support from investors Lack of blended capital models to share and mitigate the risk.
•Need solid business models • Lack of investment readiness • Early stages: no proof of success •Many non-profits becoming for-profit
as donor funding is unsustainable •BOP investments perceived as less
lucrative and more risky less funds available
Edupreneurs Investors
Outcomes, challenges & opportunities
Teachers
Pedagogical skills
Class engagement
Content knowledge
Soft skills
•Teachers training programs
•Career path inside schools •Mentorship Programs
Team
Opportunity cost for employees
High salary cost for edupreneurs
Lack of expertise
Knowledge gaps
•Career path inside schools •Personal development
plans (retention) •Highly talented recently
graduated students Retention
Lack of human capital and skills was identified as the second biggest challenge for edupreneurs after funding
Edupreneurs have developed training programs and personal development opportunities to face these challenges
Areas of development Actions
Involve different costs: • Time consuming • Increase the length of the cycle in the road to
market • Special advisors (Ex. lawyers) • More funds and resources needed before the
startup can be sustainable and profitable by itself
Better support to social enterprises Pro-bono support
Entrepreneurs support networks and policies Union programs to improve teacher quality and
assessments
1. Registration 2. Accreditation 3. Funds qualifying
requirements 4. Education as a human
right, not as a source of profits
5. Bureaucracy 6. Lack of due diligence 7. Misalignment between
provincial and national government
The Policy and Regulatory Environment means expenses and increase in the length of the early stage startup cycle
Infrastructure
Buildings are hard to find
Construction costs are high
Empty government buildings
Primary investment for LFPS
•Better networks •Government lease of
empty buildings •Tech to reduce
construction costs
Enabling Technologies
Access and high cost of wifi
Teacher resistance to change
Technology as collateral
Technology at the BOP
•Investment into better ITC •Teacher education of
technologies •Technologies that address
the root of the problem
Lack of available infrastructure, acceptance and cost of enabling technologies pose a challenge for edupreneurs
Challenges Actions
When scaling the human capital and team building comes in first place as a challenge followed by financing.
Human Capital Current revenues/
financial base
• Leaders and proactive people
• Highly qualified teachers
• Financial skills • Access to the right
infrastructure
•Support platforms
•Replication of successful
models
•Mission-driven edupreneurs
•Effective systems and
procedures
•Cost efficient models
The need of a support platform for edupreneurs to share knowledge and experiences is a general consensus among the different stakeholders interviewed
Action Plan: Great opportunity for ANDE as a network of development entrepreneurs, to create the desired impact in the South Africa edupreneurs ecosystem
• Teachers • Students • Parents
Curriculum
• Students are not prepared for careers • Change in instruction language • Poor communication between
stakeholders • Teachers are not well trained
School structure lacks good communication between stakeholders and there is a need for better curriculum
Principals
Government
• Content on soft skills and entrepreneurial development
• Develop internship programs • Streamline communication between
stakeholders • Better support systems for principals • Look at overseas standards
Actions
Even though there is an existent demand for edupreneurs services, the market is in an early stage with entry barriers and dysfunctions that interfere in their journey
Government as a barrier to entry Complicated registration and accreditation phase Provincial and national government misalignments For principals (public BOP schools) is difficult to convince the government and get the funds to afford edupreneurs products/services.
Lack of organized support system To share frameworks, best practices, and understand failures and mistakes as part of the process (mentoring).
Early stage market Lack of resources for pilot testing A largely dysfunctional system at an administrative level is an issue because there is no willingness of people to become teachers. Teachers may see tech solution as a treat and not as a tool: resistance to change cause delays in the road to market and extra costs. Solutions and services offered mainly for private schools, and not for public schools
“A clear vision of the mission helps to attract general interest and support from the market” Pat Pillai, LifeCo CEO
• Lack of government support to incentivize socents •Mismatch between investors and edupreneurs • Lack of blended capital models to mitigate risks •No early stage/seed funding available • Few and risk adverse investors • Conservative banking system •No solid business models •Decentralized education system
The trend of successful edupreneurs is transforming weaknesses into opportunities and then in strengths
• Funds available • Teacher and staff training models • Technology to reduce costs in LFPS and to monitor
student performance • Equity involvement from private funds increase
commitment and support to the edupreneur • Clear mission to attract general interest and
support
• Initiatives supporting mainly middle class and private schools: leaving BOP apart • Lack of personal network (some edupreneurs) • Complexity in hybrid models • People resistant to change and reluctant to new
technology • Largely dysfunctional system: no willingness to
become a teacher •Bureaucracy
•Vehicles to access available funding • Establish a support platform to share knowledge,
create partnership, skills (pitch). •Replicate successful models •Organize investors by sector • Indicator to measure impact • Communication tools • Create a pro-bono support to navigate
government •Hire recent graduates from university
S W
O T
Low Fee Private Schools (LFPS)
• Funding: Big initial investment
• Infrastructure: lack of appropriate space availability
• Government: systems are complicated and certificates and registration are costly.
• Business plan: developing phase takes at least 1 year
Tech-based
• Funding: Lack of seed funding
• Human Capital: Hiring and retaining the right people and later lack of staff to assist in business development
• Infrastructure: poor ITC connectivity
• Market Entry: Building the market within public schools is cumbersome
Other types Training focused: In general the business model is more simple and sustainable as there are
people and businesses willing to pay for certain courses to increase their skills level and capabilities.
There is a general filling of lack of support in general ecosystem. A lot of efforts but none are cohesively organized in the same platform.
Translating challenges into opportunity requires dividing edupreneur in two main groups based on their product/services
Fill interviews gaps: Government and investors/funds
Writing report Event 23rd of March
Incorporate round table results to writing report
The action plan will be a result of the discussion in the round table and the previous research to strength edupreneurs ecosystem
ANDE Action plan
ANDE believes that Small and Growing Businesses (SGBs) drive growth, promote equity and drive sustainability and innovation. In line with this, the SEE Project strives to drive efforts that advance opportunities and/or support impact technologies that improve access to educational services in South Africa.
Overarching Recommendations Framing the Discussion
Collaboration
between
stakeholders
Knowledge sharing of
teacher development programs
Investment in solutions
for the root of the problem
Legal framework
for social enterprises
Innovative financial
instrustment
The event agenda is designed to cover the main topics identified in the previous research.
Event agenda
