Indian Engineering & MBA Institutions: Growth Trends and Data

Number of engineering and management institutions in India have grown at an clipping rate of 19% and 16.5% CAGR in the period from 2005-06 to 2009-10 (AICTE). Likewise, the annual intake of students for engineering and management programs increased by 21% and 22% CAGR respectively in the same period.

However, Indian economy grew at a slower pace in this period. Indian GDP grew at a CAGR of 12% from 837 billion in 2005 to 1.31 trillion in 2009. This indicates that supply of students has outstripped the demand of the economy and hence there will be many more unemployed engineering and MBA graduates in the Indian labor market.

Further, given the lack of an effective policy framework and supporting professional standards, many institutions which started in last few years are of poor quality. Thus, the number of students in professional programs like engineering and management have not only been increasing at an unmanageable rate but also graduating with lack of skills. This is evident from many vacant seats remaining for engineering and management programs. In addition, there is a situation of credential inflation where people keep chasing degrees in the hope of finding better career prospects.

 

I believe that in next five years, a wave of consolidation is expected where some institutions will start closing down or merging due to their inability to adapt to the demand for quality and raising resources. Many others, which start gearing up for quality will survive and in fact, create a strong competitive advantage.

More engineering graduates, driven by underemployment or unemployment, will seek graduate programs abroad and hence education pipeline for students going abroad will continue to be healthy.

Feel free to share your thoughts/comments/experiences.
Dr. Rahul Choudaha

11 Comments

  1. @Rahul – going abroad for higher studies is more driven by financial resources at disposal then the current job market. A rich kid with money who wants to go abroad will go irrespective of the condition of the job market.
    Student with limited finances can also go abroad if they have access to scholarships. But the majority of colleges which are mushrooming (as illustrated in the graphs) are so poor in quality that their students can not manage to compete for the highly competitive scholarships.

    The short of the long story is – there is no direct correlation with the growth of engg/mba colleges and student going abroad.

  2. Thanks for the comments and feedback.

    I agree there are segments of students going aborad and realization of their study abroad intentions is a function of several variables including financial support and academic ability. My key argument is that the system is not emphasizing on quality and this is not always a reflection of the students' ability, instead it is more of a reflection on institution. There are segments of students and likewise there are segments of institutions. More students will "intend" to go abroad for career advacement opportunities where they will take out more loans and invest in education.

  3. Hi Rahul, Good inference in regards to consolidation emerging from quality and resource crunch. I can already see a trend on the horizon as a result of it (it's already present but too few in number, and patchily received at best), whereby specialized input providers "take over" a program at a university or a private institution: An independent academic company that has or develops expertise in one or more subject domains markets it to a university–offering to deliver on that university's platform the content, along with delivery method and even management of the program (hiring faculty, curricular administration, admissions, placements).
    This may work especially well with for-profit universities, which will feel the need to make their programs viable. But most importantly, this specialized input could help raise academic standards, since the transaction is commercial and induces the accountability in input quality and income.

  4. Rahul,
    Do you have the growth in faculty in these sectors for the corresponding periods? Many institutions are under staffed which can impact quality of education delivered to students.

  5. Found this to be an informative and helpful post. The issue of Poor Quality in Engineering colleges and Bschools is indeed something to look at with concern. People blindly get into such institutions with the misguided hope of securing a job. Hardly anyone has any genuine interest in Engineering or Management. The good engineers dont do engineering jobs and the poor one are incapable of doing the same. This leaves a big gap between demand and supply of skilled talent/labor.

    Thank you for such an interesting post, sir. 🙂

  6. @Rahul – saying that with increase in no. of colleges more student will 'intend' to go abroad is very generic. It is similar to saying that with more colleges coming up there will be need for more books, more computers, more pens, more notebooks, etc etc.

    Real insight would be if there is some unusual correlation between no. of universities and students going for higher studies abroad.

  7. In my opinion it'd be incorrect to correlate GDP growth with increase in no. of AICTE approved institutions. A key point to keep in mind would be that India has the lowest Gross Enrolment Rate of 9.97% at higher education level. This means that there is a huge youth population in India which is deprived of education. Hence there is a very strong case for opening many more higher education institutions. Their quality and governance model is a matter of debate and one of the toughest problems that India is trying to solve. More information can be found at http://www.scribd.com/doc/43405908/Education-Sector-Jan09

  8. Lets see this information as an entrepreneurial idea. Collect the nation wide information on educational institution pope-up for Engineering and medical education. Track their performance through various parameters and collect information on their current situation. It's worth prospecting to acquire, based on their financial. post take over we can really convert them as per niche institution standard.

    IDEAS PLZ…..

  9. Hi Rahul,Are you sure? The next five years, a wave of consolidation is expected where some institutions will start closing down or merging due to their inability to adapt to the demand for quality and raising resources.

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