EdTech for Blue Collar 🧑🏭
Blue Collar Workers constitute ~30% of population in emerging economies. Uplifting blue-collar workers would be a key factor for growth of the economy & upskilling would play a critical role!
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Higher education companies have been in news recently. Some headlines:
Emeritus, executive education platform, raised $650M from Accel and Softbank at $3.2B valuation.
Upgrad, higher education platform raised $185M from Temasek at $1.2B valuation.
Coursera, one of the most popular MOOC platforms, raised $519M in its IPO, valuing the company at $5.86B
As seen above, the platforms have focused on ‘white-collar workers’. The underprivileged part of the economy - blue and grey collar workers are yet to benefit from the rapid advances in EdTech.
Blue Collar and Grey Collar Workers👷♀️
The term ‘blue and grey collar’ refers to working class individuals who provide unskilled or semi-skilled labor, in segments including manufacturing, security, customer care, delivery, etc.
The market in context is India 🇮🇳 but the learnings are applicable to most emerging economies! 🇮🇩 🇻🇳 🇧🇷
Supply> Demand? ⚖️
It’s estimated that there are about 400M blue/grey collar workers in India. Although the above jobs are very important, due to high supply (than demand), the salaries are quite low.
Delhi’s per capital income for 2020 was $400 per month (source). Hence, minimum wage set by the government is considerably low and in practical cases, are often not abided by the employers due to high supply of labor. Needless to mention, this has only worsened due to Covid.
Problems of Blue Collar Workers 😣
Automation is a threat to the blue collar workers as they will be driven out of job. This can already be seen in several sectors like manufacturing, logistics, customer service, etc.
Government jobs accessible through entrance exams are very competitive with very low probability of success.
Government’s vocational training programs are managed by ITI (Industrial Training Institutes)- 13.3K in number- both public and private, providing training to only ~1.9M people across 126 trades.
Offline training market is fragmented and dominated by Mom-and-Pop stores which lack standardisation. Some of these institutes guarantee jobs but are accused of scamming individuals who pay high amount of fees and are unable to find a placement.
Inequitable Wealth Distribution 💰
Education- Key Driver 🏫
According to the above equation, one of the key drivers for professional growth of blue collar workers is ‘education’ - an area India struggles to address.
Only ~25% enrolment for higher education in India, which signals a large under-skilled population.
The Indian government spends ~3% of GDP on Education ($88B) (in comparison, the Chinese government spends ~4% of GDP on Education- $560B). It is evident that there is a significant gap in India’s public education which can be bridged by increased government spending and private intervention.
Market Opportunity 💸
Assuming potential revenue per user being $25, with 400M blue collar workers, the market opportunity seems to be very large, i.e. ~$10B.
Challenges for Up-skilling Platform for Blue Collar 😰
Being a diverse country, people belong to various ethnicities and speak different languages. Hence, building a one-size-fits all solution for blue collar up-skilling might be difficult.
Given there are several kinds of blue collar jobs available, platforms need to build acquisition funnel and courses in a scalable fashion. Live mentor led courses might have issue with scalability.
The key driver for up-skilling for blue collar worker is being able to find a better job and increase income. Building stream of jobs would be very important for gratification followed by up-skilling.
Business Model 🔖
Blue-collar workers or aspirants don’t have high disposable income, hence, getting the pricing right is very crucial. High fees structure enabled through sales teams could be daunting.
B2B LMS 💼
It’s common to sell LMS solutions to enterprises, which can offer it to their workforce for up-skilling and incentivise them to up-skill. There is misalignment in this arrangement, since employers don’t want their employees to up-skill beyond a point because it could lead to attrition, as employees could switch to higher paying jobs.
Scalable EdTech Platform for Blue Collar 🚀
Productized MOOC 📺
Recorded courses with gamification would be the ideal way of delivery, since it can ensure lower costs, which can be passed on to the users; along with high engagement.
Here’s how live-learning can be done in a scalable fashion:
Animated Content 📀
Since the courses must be multi-lingual, animated videos (vs real videos) is a better way of building relatable content for different ethnicities. Same piece of content can be translated in multiple languages and distributed across.
Job Marketplace 🛒
Job Marketplaces for blue collar platforms often face the problem of low retention and low ARPU. By introducing skilling, jobs can provide gratification to the users; and the users might access the platform even after recruitment to keep up with up-skilling.
Ex: If a delivery boy who is applying for a job but struggles with English, which is a pre-requisite for the job, the platform could offer a micro-course in English which could help the job aspirant prepare for the specific role.
Online Merged Offline (OMO) 🏫
There are courses which can be delivered online, like english learning, accounting, sales training, etc. but there are certain courses like carpentry, cooking, etc. which need offline intervention. Exploring partnerships with mom and pop education centres in local regions could be a starting point to bridge this. Although operationally heavy, but these institutes can be overhauled with some standardisation (read: OYO type model).
Shout out to Jio for enabling internet access to the masses in India. One of the fastest ways to gain distribution would be to partner with value-priced mobile phone companies and run pre-install campaigns with them.
Business Model 🔖
Using a productised-recorded course format, the courses can be priced in affordable manner (a few hundred rupees per course). Learn First Pay Later type financing solutions could also provide convenience to the users. Income sharing agreement can be one way, where the user pays after getting a job, but it would need some heavy lifting on recruitment side.
Landscape of Blue collar jobs marketplace and up-skilling! 🌆🇮🇳
Final Thoughts ✍️
Building a scalable ed-tech up-skilling platform for blue collar workers is a multi-billion opportunity, which is definitely difficult to crack. This could be the best timing as digital adoption is at its peak and there is affordable access to smart phones and the internet.
For the society to move forward, inclusivity is a must. Females could also get a fair chance to up-skill themselves at their comfort and join the workforce, adding to the household income.
It’s a high impact opportunity and need of the hour, as covid has pushed millions back into poverty. Up-skilling followed by better jobs will eventually uplift several households and contribute to the growth of economy.