But it exists. This is the Wild Wild West of education markets. I will be speaking more about the nature of these markets. But currently, this is a market that has come into existence and is waiting to evolve to the next level. A market that serves low income consumers in Africa, China and India.

And the man credited with discovering them is James Tooley. Why is even discovering  important? Because generations of opinion have fossilized us to think in terms of education markets not being possible. And James Tooley lets evidence decide judgment.

I have been working with him, and he is an intellectual giant – sceptical, optimist and visionary all in one go.

Here is an excerpt from his work The Beautiful Tree (have been acknowledged in the book . And here is another bounty. Nandan Nilekani’s excerpted preface for the book.

I first met Dr. James Tooley when I was on the jury panel for the IFC/FT Essay Competition in 2006 – which he won for his fascinating paper on private schools for the poor. It is a seminal work, and he builds and expands on it here, in The Beautiful Tree.

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thanks to James’ writings and research of private schools, there has been a surge of interest in private schooling for the poor. But I find the initial response to his work from academics, education officials and funding agencies, intriguing. Why is there so much resistance to an idea that is changing the lives of children in slums and villages across the world?

The idea of entrepreneurship targeted at the poor has always attracted a fair bit of resistance. In both the developing and the developed world, the poorest citizens have long received services mainly from the state, in the form of government schools, free healthcare, and either guaranteed minimum employment or welfare. Its undeniable that governments must provide its citizens with these services – a role for the state is in fact, indispensable for the poor, since market-led incentives are highly imperfect when it comes to say, providing a low-income citizen with healthcare, or a college education. But this perspective often congeals into a belief that the government is the only player that can service the poor well. According to what James calls the ‘accepted wisdom’, the poor cannot be targeted effectively by the private sector, and such services will always be exploitative. This view assumes that the poor simply cannot afford choice – government is the only alternative.

Across the developing world, the poor have proved this perspective wrong. As James writes, ‘the poor engage in self-help, and vote with their feet’, leaving behind state services for self-funded and self-created alternatives. In a journey that begins in India and takes him to East Asia and Africa, James closely observes the efforts of poor communities in education, and finds competent, committed entrepreneurs in slums who have started schools in two-room apartments as well as entire buildings, catering primarily to slum children. In his tours of these schools, he discovers young, engaged teachers, passionate entrepreneurs and teaching models that work to ensure that students are engaged and learning. A large number of the schools James surveys are unrecognized, since getting the permissions required for a license remain highly cumbersome. Yet he finds that even among the unrecognized private schools, average teacher attendance and English and math proficiency surpass the apathetic government school system.

What I found most impressive about James’ work is that he is no evangelist. He starts out as a skeptic – before he studied school entrepreneurs, he was a believer in government as the solution for education.  But while a public role in education is indispensable, public policy in education is often sub-optimal. In India for example, the struggle for universal education has been historically sidelined in government budgets, and school policy has suffered in the tug of war between the center and the states. In a country where English functions as a major business tongue, the teaching of English in government schools has often fallen victim to local politics. Some state governments imposed bans on teaching the language in government schools, which limited opportunities for entire generations of students.

How can you get mass individualized customization in education? The answer to that has a high-quality high-profit business model embedded in it.

2. Consolidation – Too many schools. Chains begin to develop in response to the competition.

3. Information – There is competition but no reliable information. Rating and accreditation agencies develop.

4. Deregulation – Finally the policy-makers get convinced and liberalization of the sector happens.

5. Innovation – With more open and transparent markets and respect for IP, commercially viable  innovation takes off on mass scale.

At each stage there are innumerable opportunities for social enterprises.

That is my recent take on the Free and Compulsory Education Bill in India. Everything in empirical evidence, ideas and my intuition points out that ideas like these dont work and one needs to design markets not bills.