Abstract
The role of technology in business and society has grown at an accelerated pace in both developed and developing markets in the recent past. This has led to the study and use of digital technologies in a variety of fields, ranging from industry, finance and government policies to education, healthcare and social communication. Many authors have examined the link between new technologies and society in the context of what is referred to as the ‘digital divide’ between rich and poor countries. It has been postulated frequently that productivity effects of technology are moderated by country factors, and increased affordability and accessibility of technology has been instrumental in socio-economic growth across social classes, regions and economies. Education and healthcare play a critical role in socio-economic development. With special emphasis on India, this article examines how innovative technology at various levels of complexity influences societal growth, through its contribution to education and healthcare, in emerging economies. The need for and contribution of different players such as the private sector, NGOs and the government in the past few decades in India has also been discussed with emphasis on these two major contributors to development. With support of some examples of innovative entrepreneurial effort, the article discusses the efforts such as extension of use of digital technology to lower socio-economic strata and its impact on education and healthcare.
Introduction
More than three-quarters of a century ago, the noted economist Schumpeter had stated that contrary to the ‘general equilibrium’ theories of Walras (1874) and Marshall (1890), ‘the economy contained internal elements that caused disruption and change’ (Schumpeter, 2008 [1934]). Disagreeing with Walras’s theory about economic growth being dependent on external shocks alone, Schumpeter stated that five forces, that is, competition, technology, markets, new goods and new organisations of an industry together constantly create new economic structures while destroying the old ones from within. This he termed as ‘creative destruction’, essential for disturbing the equilibrium and leading to growth and development. He defined ‘creative destruction’ as the phenomenon of technological entrepreneurship, that is, introduction and activation of a new (disruptive) technology, which often resulted in the failure of erstwhile dominant firms.
Basing their argument on Schumpeter’s theory, Spencer and Kirchhoff, in their 2006 paper on new technology-based firms, explored the link between the levels of technological change, creative destruction and social and economic growth (KPMG, 2011). They examined various definitions of ‘disruptive technology’, summarising the idea as that which ‘serves as the basis for development of innovations that are radically different, are resisted by the existing industry and market structures, and create entirely new markets’ (Spencer & Kirchhoff, 2006).
The contribution of disruptive technology to society and to development and creation of new markets has increased in both developed and developing economies in the recent past, leading to greater examination of its impact on economic productivity in the fields ranging from industry, finance and government policies to education, healthcare and social communication. Technology not only provides better understanding and interpretation of issues in all these fields but it also increases accessibility to unserved/underserved markets and improves operational efficiency, leading to better services and systems.
Views differ about the utility of disruptive technology for developing countries, given its costs and the skilled manpower needed for its adoption. Dedrick et al. (2013) have discussed the link between new technologies and society, given the ‘digital divide’ between the rich and poor countries. Examining the effect of information technology in a 45-country study using data from 1994 to 2007, they concluded that its productivity effects vary by country factors, including human resources, openness to foreign investment, and the quality and cost of the telecommunications infrastructure, and are ‘expanding from the richest countries into a large group of developing countries’ (Dedrick et al., 2013). Other authors disagreed with the premise that information technology is not applicable for developing countries since they tend to be mainly rural (and hence mostly dependent on agriculture, not industry), short of internal and foreign capital, and lack substantially in skilled manpower. Gupta (1987), for example, argued that even with limited resources as in poor countries, technology-driven economic trends should be the focus of national development strategies. Current patterns of steadily narrowing differences in the availability of opportunities across social strata and between ‘developed’ and ‘developing’ economies point to the role Information and Communication Technology (ICT) is actually playing in improving social inclusion.
Taking the Schumpeterian approach, Mark Warschauer (2004) as well as Dreze and Sen (1995) have also defined ‘social inclusion’ as a group’s opportunity for participation in determining individual and collective life chances. According to them, increasing internal availability of disruptive technology to various social strata influences the upscaling of ‘human capacities (education, health, etc.)’, expands social growth opportunities, influences living conditions and improves economic growth. As Drèze and Sen say, high rates of socio-economic growth may not sustain without simultaneous development of technology and enhanced social opportunities for ever larger sections of society.
Referring to the relevance of appropriate technology for developing economies, Schumacher (1973) introduced the concept of ‘intermediate technology’. To quote him,
the technology of production by the masses, making use of the best of modern knowledge and experience, is conducive to decentralisation, compatible with the laws of ecology, gentle in its use of scarce resources, and designed to serve the human person instead of making him the servant of machines. I have named it intermediate technology to signify that it is vastly superior to the primitive technology of bygone ages but at the same time much simpler, cheaper, and freer than the supertechnology of the rich. Schumacher (1973)
This article examines the role of technology in societal development in this context. Taking India as an example, the influence of disruptive technology has been explored on a variety of fields related to socio-economic growth, as also the impact on growth of continuously extending the accessibility of such technology to more strata of society, especially in critical fields related to human capital (education and healthcare). Moreover, it is suggested that rather than depending on external, advanced technology, it is easier, less expensive and more relevant for the government, corporates, entrepreneurs and NGOs in India to internally contribute to this effort in order to enhance the pace and extent of economic growth. The two cases discussed in this article, one relating to the field of education and the other to healthcare, illustrate how the use of technology succeeded in making better quality inputs in these two areas affordable and thus available to the lower income strata, thereby contributing to improvement in the overall socio-economic standards of the society.
The premises examined here are that rather than excluding technology as a contributor to development in emerging economies like India because of the costs involved and the small number of people having access to the skills needed for its use, extended use of such ‘intermediate’ technology, developed to suit local requirements, and extended availability of it to more and more socio-economic strata would accelerate economic growth.
Research Issues
These hypotheses translate into the following research issues.
Introduction/adoption of new technology adapted to local requirements, as suggested by E. F. Schumacher will contribute to the accelerated economic growth through improved effectiveness at lower costs, on the one hand, and reduction in suboptimal use of resources, on the other hand. ‘Internal’ contributors (government, NGOs, corporates and individual entrepreneurs) of technology required for development will mostly help in accelerating economic growth. Expanding availability of technology in the education and health sectors to the marginalised socio-economic strata will enhance economic growth.
Hypothesis 3, thus, proposes that intermediate technology, especially its aspects directed at improving human capital would enhance economic growth, by (a) broadening the base of socio-economically active classes and (b) by advancing the pace of application of technology focused on the requirements of developing economies like India.
Methodology
Responses to these questions have been attempted in this article through a descriptive study using secondary research and two case studies developed to illustrate the impact of application of intermediate technology, adapted for socio-economic growth under Indian conditions.
Data on inequalities in education and healthcare by gender, by geographic regions, especially in villages and small towns, and by socio-economic groups, and in their access to technology, was obtained from published studies and contemporary news reports.
Examples of the impact of intermediate technology adapted for the requirements of the aforementioned groups for socio-economic growth were obtained. This included some examples of the efforts by the government, non-government agencies, corporates and individuals at use of technology for accelerating socio-economic development.
In particular, two case studies were developed that highlight the impact of use of such technology on the growth of human capital, that is, on education and healthcare. Abbreviated versions of the two have been included here.
One of them, Byju’s—The Learning App: Technology for Learning, discusses the use of technology in the form of a digital app owned by a company called ‘Think and Learn Private Limited’, founded in 2011 by Byju Raveendran, and developed to make available educational content through mobile phones and tablets to school students from classes 1 to 12, especially aimed at lower income groups and small towns.
The second case, Narayana Health City: Accessible and Affordable Health, illustrates the role of disruptive technologies such as AI and machine learning in extending the accessibility and affordability of healthcare to rural and small-town India, where medical and healthcare facilities are not available to or affordable by about 60% of the population. This case relates to Narayana Health (NH), a chain of 30 hospitals and clinics and 19 Primary Health Clinics in small towns/rural areas across the country, which was founded in 2000 in Bangalore, the capital of the southern state of Karnataka, by Dr Devi Prasad Shetty, a renowned cardiologist-cum-academic.
These cases will illustrate how the approach of these two entrepreneurs in using technology has made education and healthcare available and affordable to lower-income groups in small towns and villages, contributing to the improvement in ‘human capacities’ to match the increased socio-economic opportunities.
Social Inclusion and Its Intersection with Technology
As mentioned earlier, many authors have stated that given the cost of technology, its extensive use in developing economies is neither feasible nor profitable. Opinions to the contrary are also quite frequent. An article in the Financial Tribune (2018), Iran’s first English language daily, stated that “Development strategists often suggest that poor countries cannot afford to dedicate resources to the digital economy. While that is true to some extent, failing to account for technology-driven economic trends will merely exacerbate the problem”. The article states further that regardless of the resource constraints, countries that are taking lead roles in the growth in the developing world need to keep track of the role technology will play in shaping economies in the near future. Highlighting the need for technology-driven economic growth, Gupta (1987) also refutes this often-raised issue of digital technology being unsuitable for poor countries who have low levels of funds and inadequate skilled manpower. Similarly, Warschauer (2004) has discussed examples of developing economies such as India, Ireland and Egypt, with many local and national programmes, using technology to reduce social stratification. He concludes that ‘the ability to access, adapt and create new knowledge using new information and communication technology is critical to social inclusion’ (Warschauer, 2004).
Examples of the role technology has been playing in the day-to-day socio-economic development of India relate to the growth of Internet (Debashish). According to news reports, since 2013 the country has been adding about 40 million users every year on the average. This extends from industry to individuals. Production base of mobile phones, for example, went up from 2 factories in 2014 to 268 in 2019 (ComConnect Consulting Research Team, 2019). Consumer adoption of mobile phones has also kept pace with these production levels across various socio-economic strata. The number of participants in this market has been mushrooming, with Chinese and Indian manufacturers acquiring dominant positions. Most of this market was concentrated in the bigger cities earlier, but the pattern has changed lately, with local entrepreneurs focusing on creating solutions to country-specific and region-specific issues, and with brands like JIO using the low-price strategy for extended penetration into lower-income user groups. As a result, the faster growing tech-based companies are now beginning to concentrate on the promise of growth that these areas provide, with companies like BSNL contributing significantly to the increased availability of Internet in smaller towns. At the same time, technoentrepreneurs have been using this growth in technology to spread their wings abroad.
Another recent instance of the use of affordable technology, extended across India as everywhere else in the world in 2020, is linked to the current COVID pandemic. The widespread virus resulted in schools and colleges shutting down in India as in other parts of the world. The alternative adopted everywhere has been online classes. Given that laptops and iPads for this purpose are not an affordable option for the lower-income group families, the use of smartphones by schoolchildren shot up substantially during the lockdown—an innovative solution that only the affordability of this technology could have made possible for poorer families, so the children did not need to be deprived of regular classes. According to the current newspaper reports, smartphones were among the products for which consumer demand surged maximally within the country.
Again, just as in the rest of the world, so also in India, the pandemic led to a greater use of digital technology and operational changes like ‘work from home’. Newly created Internet-based employment opportunities at the relatively unskilled/semi-skilled levels, such as home delivery of consumer items to households and even to workplaces during the ‘lockdowns’, are likely to become a permanent feature of daily life in future, providing for more employment.
Technology and Societal Development in India
Using the Schumpeterian theory that talks of the energy within the economy, independent of external factors propelling the system, the basic framework presented in Figure 1 defines the role of technology in simultaneously enhancing both economic growth and human capacities (e.g., education, health, etc.), both influencing each other and together governing socio-economic development. In other words (a) the growth of an economy is not exclusively dependent on technology imported from abroad but utilises internal technology as well; (b) the two strands of technology, internal and external, together lead to simultaneous economic growth and development of human capacities; and (c) this interdependence of economic growth and growth in human capacities results in all-round development of an economy.
How Technology Influences Development.
In countries like India, the attempt has been to enhance the availability of technology to greater proportion of the population, and thereby to accelerate growth and development through greater use of technology in various economic activities as well as in day-to-day living. Over the past few decades, the ‘internal’ contributors, that is, Indian government, NGOs, the corporate sector as well as entrepreneurs have used innovative and affordable internal and external technology to enhance coverage and quality of service delivery in areas such as education and healthcare across different socio-economic strata.
One recent example in 2020, extended across the country, has been linked to the current COVID pandemic. The widespread virus resulted in schools and colleges shutting down in India as in other parts of the world. The alternative adopted everywhere has been online classes. Given that laptops and iPads for this purpose are not an affordable option for the lower-income group families, the use of smartphones by schoolchildren shot up substantially from the beginning of the ‘lockdown’—an innovative solution that only the affordability of this technology could have made possible for poorer families, so the children do not need to be deprived of regular classes. According to current newspaper reports, smartphones were among the products for which consumer demand surged maximally within the country.
Traditionally, in the pre-Independence period and the immediate few decades after Independence, agriculture had been the major contributor to the economy’s gross value added (GVA). However, as Table 1 shows, over the years this pattern appears to have changed. While agriculture still accounts for the largest percentage of labour force employed in India, the services sector contributes more than half of the country’s GVA, followed by the industry. Both these sectors tend to be more dependent on technology.
Change in Sectoral Contribution to GVA and Employment.
To a large extent, this suggests that Internet technology has improved human capacities, enhancing efficacy, efficiencies and coverage across industry and service sectors through digitisation. It helped accelerate growth of the entrepreneurial ecosystem, large industry, entertainment, healthcare and education while also significantly impacting lifestyle, especially in urban India. In particular, the enhanced use of Internet in education and healthcare, critical to the improvement of human capacities, has contributed significantly to this development. With the impact of IT education, the path to growth should proceed somewhat like this:
Link Between IT Education and Socio-Economic Development.
Studying the impact of digital technologies during the four decades or more since their inception in India leads to the conclusion that they have contributed substantially to the increased employment in industry and services, raising rates of economic growth. Employment in the IT sector, for example, grew steadily in just three years from 13.29 mn in 2014 to 3.86 mn in 2017 (Statista; Statistics Times, 2018–2019). In terms of GDP, the contribution of IT and its subsectors went up from 6.1% in 2009 to 7.7% by 2017 (Statista, 2021). The IT industry accounted for 8% of India’s GDP in 2020. The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$ 62.47 billion between April 2000 and September 2020.
Even though conditions in rural parts are still very different, with only about 9% of rural India having access to the Internet, yet that knowledge is rapidly being adapted to local needs, including traditional fields such as farming news and weather-related information. In 2000, the Agri Business Division of ITC Ltd., one of India’s largest exporters of agricultural commodities, conceived e-Choupal (ITC e-Chaupal: Rural’s largest internet based intervention, 2020) as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis. These are village Internet kiosks managed by trained local farmers, whose familiarity and ease with technology has improved substantially in the process. The process provides data that enables the agricultural community to access ready information in their local language on the weather and market prices, disseminates knowledge on scientific farm practices and risk management, facilitates the sale of farm inputs (now with embedded knowledge) and helps purchase farm produce from the farmers’ doorsteps (decision-making is now information based). Information technology is leveraged by ‘e-Choupal’ to virtually cluster all the value chain participants, delivering the same benefits as vertical integration does in mature agricultural economies like the USA. According to media reports, it is the largest Internet-based intervention in rural India.
Another two cases, Byju’s: The Learning App and Narayana Health City, mentioned earlier, offer examples of the innovative role of individual entrepreneurs and various funding agencies in increasing access through technology to education and healthcare in small town/rural India and lower-income groups. As a 2018 report in The Wire (2018) points out, ‘the bulk of policy and commercial interventions focus on improving access to internet services by upgrading spectrum and broadband infrastructure and bringing down the costs to individual users, in addition to facilitating the uptake of digital technologies through programmes for digital skilling’.
Women are another segment of population that lags behind in use of technology across the country, as mentioned in various media reports. This is true of all their technology-related roles: as consumers, students and employees. According to a report in the Catalyst (2020, October), while women constituted 48.1% of the country’s population as of 2020, they accounted for only 19.9% of the total labour force. Then again, according to a 2019 study quoted by the Institute of Women’s Policy Research (2019), females account for only 13.7% in senior and middle management positions in India. Women typically hold most of the administrative and data processing roles that artificial intelligence and other technologies threaten to usurp, and as a 2018 McKinsey Global Institute (MGI, 2018, May 1) report suggested, the impact of the marginalisation mentioned earlier as a result of adoption of technology is expected to be marked: 12 million women, that is, 10% of all employed women, may be displaced by automation by 2030. In IT in particular, women constitute only 28% of the labour force at different hierarchical levels (Statistics Times, 2018–2019). To quote again from The Wire (2018), ‘[i]solated technical solutions are not adequate to address the social and cultural roots of India’s digital gender divide’ (even more marked in rural areas).
Sharma estimated in 2017 that mobile phone penetration was set to rise to 85%–90%by 2020 (Sharma, 2017). Even so, as The Wire reported in 2018,
While 43% of Indian men owned a cellphone, women lagged behind with only 28% mobile ownership. The gender gap in mobile ownership—estimated at about 114 million—reinforces the fact of unequal access. … Unless this digital gender divide is bridged, India’s aggressive push towards digitisation will further entrench the political, economic and social marginalisation of women.
The situation is similar when we examine the position of women in Science, Technology, Engineering and Mathematics- (STEM) related employment, as reported by an August 2019 report in India Today. As per the report of National Association of Software and Service Companies (NASSCOM) quoted by Anita and Ravindran (2020), the labour force contribution of women in India’s technology industry is 35%. This, even though increasing women’s labour force participation by 10% could add $770bn to India’s GDP by 2025 according to the MGI (MGI, 2018). And if women’s entrepreneurship as one segment of resource-generating activity were to expand, it would help increase employment, as women entrepreneurs would hire more women, many of whom may not be employed currently.
Technology and Education in India
The quality/availability of education in India is certainly less than satisfactory at present. While the current ratio of rural–urban enrolment in schools is 7:5, and there are islands of excellence in the Indian education system that consists of 1.4 million schools, 50,000 colleges and nearly 900 universities catering to over 286 million students (Economic Survey, 2018; First Crayon, 2017), the standards and disbursal of education leave much to be desired, especially in rural areas. Nearly 60% of students there, up to the age of 10, lack basic reading skills. Even in urban areas, it has been found that in many schools, class 5 students are unable to read class 2 text. One of the factors affecting education quality, as mentioned earlier, is the shortage of qualified teachers, with 97,273 single teacher schools in India (about 8.8% of all schools in the country; Kavishwar, 2018). This makes for inadequate attention to individual students and poor personal interaction between teachers and students, though there has been some improvement in the figures over the years. Examining the student–classroom ratio and pupil–teacher ratio (PTR), two critical metrics of student–teacher interaction, we find that student–classroom ratios show noticeable improvement: in 2009–2010, 43% schools reported the student–classroom ratio higher than 30 students (the ideal figure) per classroom; by 2015–2016, there were only 25.7% such schools remaining, according to the Economic Survey of India 2017–2018 (Department of Economic Affairs, 2018). Since the degree of such interaction and the counselling involved may be deemed to influence the rise in ‘human capacities’, data on such metrics are important: in 2015, India ranked 126th out of 163 countries in terms of PTR. Though PTR improved from 32 in 2009–2010 to 23 in 2015–2016, single teacher schools continue to be a major concern in rural India (Economic Survey, 2018; First Crayon, 2017; Kavishwar, 2018). As Kavishwar (2018) reports, ‘India is home to the largest population of children in the world, with an estimated 430 million children in the age group of 0–18 years in the country.
As Kavishwar (2018) reports, “India is home to the largest population of children in the world, with an estimated 43 crore/ 430 million children in the age group of 0-18 years in the country. These children are the future of our nation and therefore, it is imperative that they are provided with necessary means to realise their potential. A modernised education system can channelise efforts in this direction”. He goes on to say , “In order to achieve this, it is imperative that we address prevailing teaching-related concerns such as outmoded teaching methods, shortage of qualified teachers, highly disproportionate student-teacher ratio, and inadequate teaching materials that affect the quality of education” (Forbes India Blogs; Kavishwar, 2018, April 2). These negatives of teaching-related constraints do not just lead to poor quality of education but also contribute to high dropout rates in rural schools—nearly 50% by the age of fourteen (Department of Economic Affairs, 2018; Economic Survey, 2018; First Crayon, 2017). The nature and extent of the dropout problem is exacerbated by the poverty levels, poor transportation facilities and traditions perpetuating gender inequalities, which ensure that if the family’s financial situation does not allow all children to continue receiving school education, the girls in the family get withdrawn from school first. The picture is more disheartening at the post-school level, where Gohain (2019) reports a more or less static level of enrolment for three years running from 2017–2019 among women in reputed institutions of technical education such as AIIMS and IITs. At levels of undergraduate technical education, women’s enrolment does not go beyond 28%–29%.
Even though the overall gross enrolment ratio (GER) of women in higher education had surpassed that of men by 2018–2019, and women’s literacy levels had gone up to 65.46% from 21.97% in the 1971 census, India ranked a lowly 114 out of 156 countries on the educational attainment dimension of the global gender parity index put out by the World Economic Forum in 2021. Women’s enrolment in STEM-related education stands at 39% (Source. Girlsintech.org; quoted by Anita & Ravindran, 2020). According to the World Economic Forum (2018), among STEM students in India, only 26.93% are women. Specifically, only 7.19% are in engineering-, manufacturing- and construction-related courses, and 6% in information and communication technology. In order to take corrective action on this front, almost all Indian governments have been taking initiatives to increase the enrolment of women in education, starting from the school level and leading to secondary and higher education. It is heartening to note that this has been leading to higher female enrolment rates. This appears linked to their employment patterns discussed earlier.
In rural areas, infrastructural inadequacy is another major limitation to extending coverage of education. Digital education is, therefore, increasingly being looked to as a solution to these issues, with help from telecom service providers. Government, NGOs and corporate social responsibility (India Briefing News, 2017; Statista, 2021) cells of corporates are all taking concerted action in this direction through tools such as digital boards and online education. Various projects and devices like the Aakash affordable tablet computers have been developed by government agencies between 1975 and 2014 (Phalkey, & Chattopadhyay, 2016). Conscious efforts at increasing the availability of mobile phones, especially in schools and rural communities, are helping noticeably in this direction (Gupta, 1987) as mentioned earlier. In urban areas, coaching classes have become popular, providing online as well as offline education at different levels. Many coaching classes such as Mahesh Shetty’s MT Educare Ltd (ET Panache, 2019) in Mumbai and Byju’s: The Learning App (offshoot of Think and Learn Pvt. Ltd; Kavishwar, 2018) in Kerala and other towns in southern India have established strong reputations, using mobile technology in order to increase accessibility and speed of communication, improve inputs and enhance one-to-one interaction between students and teachers. National Association of Software and Service Companies (NASSCOM) has launched an online platform which is aimed at upskilling over 2 million technology professionals and skilling another 2 million potential employees and students. Start-ups in the field of education have come up in many cities and towns and are successfully bridging quality and availability gaps in education through the use of technology. This growth of ‘edutech’ has now reached the stage of maturity that companies such as MT Educare and Byju’s are trying various kinds of differentiation in order to improve their success rates: student age groups aimed at; the languages taught in; the kind of courses taught, for example, general school education, IT/ITES courses, and courses aimed at the professional and competitive exams; the location, etc.—some of these companies have even started multinational virtual campuses. With companies marketing their wares extensively, the online education market in India is projected to grow at a CAGR of 20.02% during the period 2017–2021 (Businesswire, 2018). The story of Byju’s, outlined below, is an example of the relatively recent, impressive contribution made by entrepreneurs towards the use of technology for upgrading education levels.
A Story of Technology for Learning: Byju’s—The Learning App
The Beginning
Think and Learn Pvt. Ltd is a Bangalore-based educational technology and online tutoring firm that was founded in 2011 in the form of coaching classes by Byju Raveendran, an engineer from a small coastal town in Kerala. Raveendran, himself the son of teachers, was not always keen on teaching, being a sports lover instead. He was working with a UK-based shipping company, when he began helping a few friends crack the entrance test to the Indian Institutes of Management (IIMs) using his shortcut methods. The popularity of his ‘classes’ made him aware of the substantial need for affordable good quality education in small towns and villages in the country. He finally quit his job and set up Think and Learn. Today, the company that gave birth to the concept of ‘edutech’ is among the most successful unicorns, using technology in the field of quality education, an area critical for socio-economic development, in relatively less accessible locations to those who cannot easily afford it.
The flagship market-offering of the company is a smartphone app named BYJU’s: The Learning App that was developed in August 2015. Using the app, the company is able to reach out to a large number of students in urban and semi-urban areas who are otherwise unable to access or afford good quality education. The app started by serving educational content mainly to school students from classes 4 to 12, but has lately been expanded to cover students from classes 1 to 3 as well. The focus in teaching is currently on mathematics and science, where the concepts are visually explained using short videos.
Byju’s, as the start-up is generally referred to, began the formal set-up in Kerala with offline tutoring for small groups of students, gradually moving on to large auditoriums and stadiums, and then via VSAT. Currently, the focus of the teaching is almost totally urban, with the exception of Raveendran’s native village where he takes care of education and healthcare for the underprivileged. Having grown up in a village and then having lived in Indian and Western cities has given Raveendran a balanced perspective and an understanding of the educational needs of rural/small town India and how to meet them. In the last five years, Byju’s has gradually expanded to small towns, on the one hand, and is at the same time among the few start-ups in this field that have gone global, particularly with the 2017 acquisition of TutorVista. They plan to launch products in many of the English-speaking countries such as the UK, the USA, Australia, South Africa as well as many commonwealth countries.
The company also trains students for competitive examinations, for entry to higher education institutions like the Indian Institutes of Technology and IIMs as well as for international examinations such as GRE and GMAT. It also prepares them for admission to civil services examinations like the Indian Administrative Services.
The Differences
Byju’s value proposition is that it addresses the biggest gap in the Indian education sector: access to good quality. Raveendran has been conscious of this need all along, and his app-based video delivery model is a scalable solution to bring the best teachers to every student. During his early teaching, he identified eight of his students, who had high levels of subject expertise and were enterprising and hardworking, and recruited them as faculty. As he says, ‘[f]rom the multiple campuses (I taught at), I picked the best’. Without question, this addresses one of the most major requirements for raising the standard of education in schools.
The other major difference is in the mode of delivery. Byju’s model works in two stages: to begin with, the app can be downloaded by anyone and used for 15 days for free. It is available with all the videos that teach some concepts. After 15 days, if the student finds the approach useful and wants to continue, he/she has to pay a subscription for more advanced levels. According to Raveendran, this model encourages the students to develop an interest in learning: since they have to pay, the students would take the entire approach more seriously. That is where the challenge lies: The cost of accessing the complete learning programme with videos and adaptive learning modules of a particular class is Rs 10,000. The success of the model is indicated by the fact that until June 2018, Byju’s had around 20 million registered students and 1.26 million annual paid subscribers, which, by the end of the year, had grown to 30 million registered students and 2 million annual paid subscribers, in the face of increasing competition from companies like Vedantu. The use of technology has helped Raveendran scale his product up to this level. There has been some criticism about the quality of teaching at Byju’s, with complaints about the lack of depth in some teaching areas, but the growth rate and the average annual retention rate of 90% brings this criticism into question: the learning app is adding about 30,000 new annually paid-up users per month.
Growth
G. V. Ravishankar, managing director, Sequoia Capital India Advisors, cites Raveendran’s ‘use of technology to improve the education outcomes of students in India, his extremely well-crafted go-to-market strategy that allows for scale and, above all, a core team that has high commitment and passion towards democratising access to education in this country’ as factors making Byju’s one of the largest edutech companies in India. According to him, there is a chance to take the model global in the next few years.
Sequoia was among the first few to invest in Byju’s. Since then, it has been able to attract investment from various sources globally, including the Belgian firm Sofina, the Pai’s of the Manipal Institute of Technology, General Atlantic and many others including the high profile Chan Zukerberg Initiative in 2016. Raveendran explains the reasons for this last as the way Byju’s ‘use technology to personalise learning’ and the ‘impact our app has had on students not just in cities, but also in small towns’. In a country like India, where the individualised interaction of students and teachers leaves much to be desired—a student–teacher ratio of 35.15:1 in 2011, having improved to 23:1 by 2015–2016, and yet below the 2011 figures of 16.8:1 for China and 14.3:1 for USA, this personalisation of learning is a major achievement. Raveendran is well aware of the fact that solutions to problems such as access, affordability and technical skills cannot be purely technology based, so Byju’s continues to have actual classrooms that incorporate online learning (these generate about 10% of its total revenues), while the learning app with video lessons and interactive content addresses the world’s largest market for the K-12 segment. Byju’s model, thus, offers the unique combination that provides affordability, scale and accessibility through technology along with actual classroom opportunity to students for personal interaction with teachers.
The most recent investment of US$450 million was from Nasper’s Ventures of South Africa in December 2018. Byju’s has been growing steadily by acquiring a number of competitors over the last few years, including the US-based learning platform Osmo for US$120 million recently. This is the company’s fifth and so far the largest acquisition. They intend to tap Osmo’s physical-to-digital technology and content and expand their coverage to include 3–8-year-old children, offering them ‘play-based learning’.
In terms of financial growth, Byju’s doubled its revenue to Rs. 500.2 crores in 2017–2018 from the previous year, while its losses fell around 40% to Rs. 37.1 crore during that period. According to a report in the Indian newspaper Economic Times, Byju’s is one of the few large Internet companies in India to have a capital efficient business model ( Kavishwar, 2018 ). The company registered a profit in the last quarter of 2017–2018, and was expected to close 2018–2019 in the green, making it one of the few Indian unicorns to turn a profit. The company today has branches in most major towns in the country, and having been able to raise funding from numerous national and international investors, it is today the most valuable start-up at US$16.5 billion. According to Statista, it closed the year 2018–2019 with a gross revenue of Rs. 1430 crore, and as per an interview to Business Insider by Divya Gokulnath, co-founder of Think and Learn, again almost doubled the revenue to Rs. 2800 crore. It is today among the world’s most valuable edutech firms, proving that it is possible to integrate technology and sound business policies for societal development, even in areas as critical to social growth as education.
Technology and Healthcare: Another Pivot for Development
While sustaining technology helps strengthen existing responses to changes, disruptive technology accelerates the pace of change, addressing issues not addressed earlier. Examples of both appear regularly in many of the fields contributing to societal growth. Healthcare, like education, is a major measure of societal development and is significantly impacted by both these aspects of technology; uneven change in either tends to slow down the development of human capacities. IT is getting interwoven in the healthcare industry in a variety of forms, such as electronic medical and health records, and clinical decision support systems, to name a few. There exist numerous examples of the use and impact of technology for improving accessibility and quality of healthcare. Based on an IBEF (2018) report, it would appear that consumers are increasingly using web, information technologies for self-monitoring, facilitating interactions and information exchange with doctors and supporting treatment adherence.
In the field of healthcare, the inequalities between developed and developing economies are substantial in terms of pace, level of growth and coverage. Within India too, provisions for healthcare are quite unevenly distributed across different regions and different sections of society for a long time in all three aspects: accessibility, affordability and quality of inputs including skilled healthcare personnel. For example, according to WHO data quoted by the World Bank, in 2019, with a total number of 69,100 hospitals, India had only 5 hospital beds per 10,000 population and 26 doctors and nurses/midwives per 10,000 population in 2018, way below the norm of 30 specified by WHO as reported by Rema Nagarajan (TNN, Times of India; Nagarajan, 2020, December 20). The effects of sustaining technology and trained, skilled manpower have been quite unevenly distributed across different regions and different sections of society for a long time. Costs of development and distribution and low governmental spending on healthcare, in addition to socio-religious constraints, have kept the impact of disruptive technology on healthcare development at a suboptimal level for long, particularly in rural areas. Also, it has been used for negative as often as positive purposes, governed as much by socio-religious stigmata as healthcare concerns: for example, the fear of childlessness has encouraged frequent use of technologies like IVF, but at the same time, since having many daughters is traditionally considered a social undesirable, technology is often used for sex determination of the foetus and resultant negative decisions.
However, in the last three decades or so, the government, NGOs and the corporate sector have been playing a significant role in enhancing awareness, coverage as well as design and development of innovative and affordable technology and trained manpower in the field of healthcare. New, economical technology has been developed for diagnostics as well as treatment and is being made available in rural and remote areas in addition to cities. One example is the app developed by the NGO Antara Foundation (Alexander, 2018), which uses simple applications developed through low-cost tablets to share data about the nourishment status of mothers and children. The data is made available simultaneously to the AAA, that is, the Auxiliary Nurse/Midwife for medical care, the Anganwadi worker (rural childcare worker) and the Accredited Social Health Activist (ASHA) worker, the community mobiliser. This gives a clearer, quicker and more complete picture of the health status of the mothers and the children, especially in villages. Another example is of Dr Indira Hinduja, a well-known gynaecologist/obstetrician who introduced the ‘Gamete intrafallopian transfer (GIFT)’ technology for IVF in the country in 1988 and provided emotional relief to a large number of couples by helping with birth of about 1250 ‘test-tube babies’ by 2016 (Department of Economic Affairs, 2018).
Hospitals are the major healthcare segment in India and accounted for 71% of the total revenue in the healthcare market in 2012, though they registered a growth rate of 20% p.a. between 2005 and 2012. Primary Health Centres, which are government-run basic treatment units available in villages and small towns, are inadequate in number and also ill-equipped in terms of facilities, physicians and trained staff. According to National Family Health Survey-3 (International Institute for Population Sciences [IIPS] and Macro International, 2007), the private medical sector remains the primary source of health care for 70% of households in urban areas and 63% of households in rural areas. The main reason for greater dependence on private sector is the poor quality of care in the public sector, as mentioned by more than 57% of surveyed households. Other major reasons are long distances between public hospitals and residential areas, long wait times and inconvenient hours of operation. As Chandra and Bhattacharya (2019) quoted in the Narayana Hrudayalaya case presented later say, most villagers end up getting treatment from nearby unregistered, unqualified medical practitioners (UMPs), who, though legally not allowed to practice medicine, provide easy access, lower costs and some treatment facility though that might at times lead to life-threatening risks.
Effort is now on to make healthcare available extensively and at low cost through internally developed technology. Arindam De (2017) reports that Bhabha Atomic Research Centre (BARC), a premier government-owned nuclear research centre has recently developed a credit card-sized ECG machine, costing Rs. 4000/- (approx. US$57), which can be used in rural hospitals and primary health centres for economical and easily accessible diagnosis (Businesswire, 2018). Tanaya Singh reports ‘A similar innovation by Kanav Kahol, a New Delhi-based biomedical engineer is Swasthya Slate, a mobile platform that allows various kinds of diagnostic tests on a mobile phone or a tablet’ (Singh, 2016). The kit contains a digital thermometer, a BP monitor, an easy-to-use heart rate sensor, an ECG system, a blood sugar monitor and a water quality unit. The whole system has to be connected with an interface that sends all the diagnostics to any android mobile device via Bluetooth stream or USB connection. A complete Swasthya Slate kit costs US$800 (approximately Rs. 55,000) with the tablet, equivalent to about 10% of the usual cost of individual devices for all these tests. It is being used in government hospitals, by private buyers, NGOs, individual doctors and patients as well. Budgetary allocations, too, have increased over the years in technologies like Stem Cell Therapy, and methods such as computerisation and Picture Archived Computerised System (PACS) have been gradually overtaking the traditional methods of diagnosis. Another innovation is an ECG device that gives out the diagnosis within 6 minutes, developed by Dr Charit Bhograj, a cardiologist attached to Vikram Hospital, Bangalore, and Founder CEO, Tricog Health Services Pvt. Ltd (Bhograj, 2019). According to Dr Bhograj, ‘We are trying to bridge the gap to provide access to quality healthcare for entire India ….’
Yet another major example of the use of technology for high quality, accessible and affordable healthcare in small towns as well as large cities is the story of ‘Narayana Health City: Accessible and Affordable Health’, the case given below. Narayan Health (NH), a chain of multispeciality hospitals founded by Dr Devi Prasad Shetty, a renowned cardiologist-cum-academic and medical entrepreneur, combines affordable, modern technology with a sustainable business model for healthcare in various parts of the country, partly as an alternative to the treatment by UMPs mentioned earlier. His hospitals rely extensively on digital interventions such as advanced analytics, machine learning and artificial intelligence. In less than two decades since he set up his first hospital, he has established many milestones of medical care comparable with the best hospitals in the world: mortality rates are lower than 2%, hospital-acquired infections rates 2.8 per 1,000 ICU days, and cardiac surgery costs that are 45%–60% lower than the usual Indian rates. The objective of extending financial affordability to poor patients is achieved through practices like daily examination of profit and loss accounts. The case offers a practical example of the financial feasibility of a medical care system that reaches out to disadvantaged income groups in rural areas and small towns, using modern disruptive technology.
Narayana Health City: Accessible and Affordable Health
Origins
Narayana Health (formerly known as Narayana Hrudyalaya) is a chain of multispeciality hospitals, heart centres and primary care facilities with its headquarters in Bengaluru, India. It was founded by Dr Devi Prasad Shetty in the year 2000.
Dr Shetty, a cardiac surgeon with more than 35 years of experience, holds MBBS and MS degrees from the University of Mysore, and a Fellowship of the Royal College of Surgeons (FRCS) from England. Currently, he is a professor at Rajiv Gandhi University of Medical Sciences, Bengaluru, India and at the University of Minnesota Medical School, USA. Over the years, he has received a large number of prestigious awards and from the Government of India, from the state governments of Karnataka and West Bengal, and many other national and international awards.
Dr Shetty identified the need for cardiac surgery in India as about 2.5 million people requiring it every year, of which 80,000 to 90,000 surgeries actually take place. According to him, ‘[w]e clearly need to relook and change the way things are being done’. His passion has led him to solutions that offer accessibility, affordability as well as quality in the form of Narayana Hrudalaya (NH), a heart hospital in Bangalore with 225 operational beds in 2001. Later, in line with his mission to provide accessibility and affordability of health services to all Indians, he initiated the concept of micro health insurance scheme along with the government of the southern state of Karnataka. During the same period, NH started its second hospital in Kolkata (West Bengal)—Rabindranath Tagore International Institute of Cardiac Sciences. His Bangalore heart hospital has now grown to 1,000 beds; the facility has added advanced technology and doctors there perform some 30 surgeries a day—the highest number of cardiac surgeries done by any hospital in India. The hospital’s mortality rate of around 2% and hospital-acquired infection rate of 2.8 per 1,000 ICU days are comparable to the best hospitals across the world, Shetty asserts. In an article in Forbes India, the University of Michigan’s professor, the late Dr C. K. Prahalad had said that the mortality rate in Narayana Hrudayalaya is ‘much lower than in New York State for similar kinds of heart disease’.
Today, the healthcare services NH provides have extended beyond cardiac health. What makes the NH model unique is its accessibility across the country, with facilities in all parts of India; affordability for all sections of society, extensive use of technology in providing healthcare and a strong, sustainable financial and business model. Dr Shetty believes that cost reduction and improvement in the quality of service delivery is only possible through technology. His hospitals accordingly see extensive use of digital interventions such as advanced analytics, machine learning and artificial intelligence. NH has implemented real-time data analytics and predictive insights across their operations running on Microsoft Azure, SQL Server and Power BI. Not only that, affordability of healthcare is a critical performance parameter at NH group, which provides extensive financial support under various schemes to most of its patients.
Vision and Mission of NH
As Dr Shetty says,
[w]e believe that the ‘Narayana Health’ brand is strongly associated with our mission to deliver high-quality, affordable healthcare services to the broader population by leveraging our economies of scale, skilled doctors, and an efficient business model. Our core values are represented by the acronym ‘iCare’, which encompasses innovation and efficiency, Compassionate care, Accountability, Respect for all, and Excellence as a culture. At the same time, we seek to generate a strong financial performance and deliver long-term value to our shareholders through the execution of our business strategy.
He believes that healthcare in India needs more process innovation than product innovation. His aim is to establish NH as the lowest cost, high-quality healthcare service provider in the world.
The Business Model and Financial Performance
With a robust business model, Narayana Hrudyalaya was listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on 6 January 2016, valued at over 1 Billion USD. Shares are held, in addition to Dr Shetty and his family, by JP Morgan and PineBridge Investments (formerly known as AIG Investments) and Kiran Mazumdar-Shaw, chairman and managing director of biotechnology firm Biocon. The model is predominantly ‘asset-light’ and operates on the principle of reinvestment of accruals.
Land for the facilities is acquired from the government or rented from private parties across the country, providing for small-to-large clinics within existing hospitals, rural clinics and teleconsultation in order for affordable healthcare to be accessible to millions all over India.
Cardiac surgeries at NH typically cost about 45%–60% of the usual cost in India and less than 10% of those in the USA. About 30% of the patients are covered under a micro-insurance plan for health care called Yeshasvini. For patients depending on their own financial capacity, the hospital helps with funding from its charitable trust, individual donors or by the hospital itself.
NH follows the unique accounting practice of studying the profit and loss account on a daily basis. ‘By monitoring the average realization per surgery and our profitability on a daily basis, we are able to assess how much concession we can afford to give the following day without adversely impacting our profitability’, states Sreenath Reddy, the hospital’s chief financial officer (Wharton, 2010).
Social Development and Technology
In the Economic and Political Weekly, Shailaja Chandra and Sreedeep Bhattacharya (2019) talk of the three tiers of day-to-day health care centres—subcentres, primary health centres (PHCs) and community health centres (CHCs) supposed to be available to rural communities. The locations of these subcentres and PHCs are extremely unevenly distributed, so that the majority of villagers have to travel at least 5 kilometres on the average ‘to see the nearest PHC medical officer’. In addition, the number of such PHCs is very limited at about 25,000 across the country, and they are all extremely understaffed as well as short of the required medicines. One of the major negatives of this shortfall, as discussed earlier, is the dependence of the villagers on UMPs, with all the attendant risks. The situation is not uncommon even in urban slums.
Referring to the risks involved in this countrywide practice, Dr Shetty says, ‘[t]here is something dramatically wrong in the way we currently deliver healthcare—cost is a bigger concern than the disease or its treatment. Something has to be done’. Following his initiative, NH has been instrumental between 2005 and 2017 in implementing six technology-based initiatives in different states in the country, aimed primarily at lower socio-economic background, especially women:
Rajiv Gandhi Arogya Yojana, Amethi (Uttar Pradesh), offering free primary health care and free medicines in 202 villages Railway Clinics at major railway stations in Karnataka, especially Bangalore Mobile Mammography Screening facilities at Bangalore, Tamil Nadu E-Healthcare (e-HC) Programme in Karnataka, West Bengal, Rajasthan, Gujarat Non-Communicable Diseases Programme for creating awareness and screening mainly of oral and breast cancer in Bangalore, Howrah, Mysore, Jamshedpur, Jaipur and Delhi Shorapur Maternal Obstetric Monitoriing Programme in Shorapur, Yadgir district, Karnataka
NH Today
The 30 specialities at NH include 23 hospitals, 7 heart centres and 19 primary care facilities in smaller towns/rural areas across India. Three of the group’s hospitals have received accreditation from Joint Commission International (JCI), the international gold standard in healthcare provision.
Between 2009 and 2012, NH expanded its reach to many non-metro towns as well, making it the second-largest hospital network in India (based on operational bed count), in pursuance of its mission to make medical care accessible to all. It now features over 6,000 operational beds through a combination of greenfield projects and acquisitions. In addition to offering services at its own facilities, NH has one of the world’s largest telemedicine networks, connecting 800 centres globally.
As per media reports, now Dr Shetty is ready to aim higher. India currently has around 0.7 beds per thousand people; the key to better aligning those numbers with the population, he states, is creating a chain of large ‘health cities’ across the country, with about 30,000 beds over the next five years. To this end, he spearheaded the creation of a 1,400-bed cancer and multispecialty hospital—the largest cancer hospital in the country—at the Bangalore campus. A women and children’s hospital and another for nephrology, a 500-bed orthopaedic hospital, an eye hospital, research facilities and room for about 50 training programmes are also underway. As he says, ‘in the next five years we want to be able to do a heart operation for US$800 from point of admission to point of discharge. We believe it is possible’.
Another critical area of growth that NH has ventured into is medical education and other support to healthcare through some training programmes internally developed by them.
Challenges
The acquisition and setting up of new hospitals has not been without its costs for NH. With sales of Rs. 2564 crores during January–December 2018, NH registered a decline of 29.04%. As per a January 2019 ET report, in spite of the asset-light model, interest costs have tripled and depreciation nearly doubled for the company in the three years since it went public in 2016, as has been the case with some other well-known new healthcare players such as Aster DM Healthcare, Thyrocare, HCG and Shalby.
Restrictions on prices of medical technology devices have further affected growth prospects. However, improvement in operational performance is expected during the coming quarters, though profitability may continue to be affected for some time to come.
These two cases provide examples that the use of technology can and has enhanced successful delivery of crucial parameters of socio-economic development in emerging economies like India. They also support the argument that wherever demand outstrips supply, use of technology succeeds not only in improving accessibility, quality and affordability in fields critical for development but also ensures long-term success by providing for sustained profitability.
Conclusions
This study emphasises two points: (a) accelerated development of a society requires creative destruction from within; and (b) availability of technology to all strata of society is an essential tool for such creative destruction. Examining the examples of healthcare and education as two critical measures of development in countries like India, it would appear that socio-economic growth in any society, especially in emerging economies where growth rates have been traditionally slow, needs the use of technology in order to accelerate development through enhancement of access, availability and quality of inputs to all strata of society. While data for India indicates improvement in these spheres over the past few years, it needs to be speeded up further, and the coverage must extend to the marginalised sections of the population, using technology, if the country has to advance more rapidly. And use of technology need not always imply high costs. Costs of development and distribution, coupled with low governmental spending, and socio-cultural norms depriving various classes of access to technology and its benefits have resulted significantly in suboptimal growth in various sectors. What is important is that these technological contributions should come from government as well as non-government sources.
Intermediate technology-based internal contributions from government sources, corporates as well as individual entrepreneurs have lately been speeding up the growth effort since it is cheaper and quicker to put back into the society the internal effort and locally developed technology for spiralling growth. Efforts have also been on to reduce marginalisation through introduction of new government schemes encouraging skills, technology-based education and provision for business-funding and employment opportunities to lower-income groups, rural population and women. Recently, increased and efficient use of affordable technologies in spheres such as education and healthcare has gone up markedly in various geographical and socio-economic segments in India, leading to reduction in dependency and noticeable impact on social inclusion and resultant development.
Footnotes
Acknowledgement
Grateful thanks are due to my friend Mr G. Ravinder, Retired Senior Lecturer, University of Technology, Sydney, for his extremely useful inputs, untiring efforts, patience and time devoted in helping with research, many discussions and editing of this piece.
Declaration of Conflicting Interests
Funding
The author received no financial support for the research, authorship and/or publication of this article.
