Pearson sees double-digit growth in India each year

John Fallon, CEO of Pearson, wants Indian learners to have access to all digital products and platforms that the British education publisher is developing worldwide. He says India might not be a big market for the company in terms of revenue yet, but there is a lot of potential because the country would need digital solutions for educating its growing young population. Fallon sees double-digit growth in India each year.

The London-headquartered company, which intensified focus on digital products and services globally, also recently named Ishantha Lokugé chief product officer, and Satish Menon, SVP, chief technology officer, Product Platform, both from Shutterfly, to help it in making its user experience and consumer experience better. “Earlier students were doing what the university told them to do. The Instagram, Spotify generation, they have very high expectations of the elegance and simplicity of design and the functionality of it,” says Fallon.

Fallon, who was in India earlier this month, spoke to Fortune India about the digital transformation journey of the company, the challenges it faced, and how it wants to be associated with learners throughout their lives. Edited excerpts:

Tell me about digitising textbooks, what are the various models you are looking at, are these going to be subscription-based, or e-textbooks, or in other forms?

It can vary across a range, we do sell e-texts, which are digital versions of physical textbooks with some basic additional functionality around note taking, annotations, marking and the like. But what we would really call digital coursework [is that] which rewrites what textbooks do in a completely digitally-first way and in a way which is much more adaptive and personalised.

For some years now, we have provided alternative homework and assessment tools. They automate the homework setting and marking of homework, which is a big productivity gain for the faculty, and it provides much more personalised feedback for students. Take an area like math, the more you do the better you get at it, so it encourages you to do more, and relieves you of peer pressure because you don’t have people in class seeing what score you get because you get it directly to you, and it can adapt and personalise to the way you are. We are now developing the next generation of artificial intelligence-inspired apps.

How does that change your engagement with schools, universities, and students and faculty evolves, how has your role evolved as being more than a publisher?

This enables you to have a direct relationship with every learner. In the old analog world, we published and solved millions of textbooks, but we had no idea who was using them, how much do they even actually read, what results they achieved. Now the relationship is personal, we know who you are, what your strengths are, what your opportunities for development are, we know when you study, how long you study, how deep you go into the text. We want to use that to build a trusting, mutual relationship throughout a learner’s working life. So we can say you have been doing those courses, you have demonstrated these skills, these skills could set you up for these different carers, if you are interested in pursuing one of these careers, this is what you should do next.

What were the kind of changes you saw at the back-end, what kind of people did you hire, what were the kind of investments you made?

We have been investing about a $1 billion a year in digital transformation of the company. We have had to build next generation platforms. We started on the analogue to digital transition in the late 1990s, so a lot of the platforms that our products are build on are legacy platforms, and they have been designed in a way, which is deeply siloed. The big transformation of the company has been to invest in the global learning platform, which will enable us to ingest any education-related content and render it in a mobile-first, highly-scalable, highly-secure, highly -personalised and adaptive way, and that will all be cloud-based. It is also all built in a modular way, so you can easily upgrade individual components of it. But to get here has been a very significant challenge.

One of our biggest business faced a structural decline, in the U.S. college publication business, we came from the world of $300 textbook to the $40 re-text or the $70-$80 fully-integrated digital coursework, we are having to operate at very different price points, but that’s what the learner demands that we do. These are big changes and big transformations and these are not easy to pull off.

Does bringing your content to digital needs a lot of change and redesigning?

We have to take everything that we have learnt about the very best way to teach (something), the common mistakes that students make, then we use our experience and insights to develop completely different content, because in a mobile world content needs to be shorter, it needs to be tighter, and we use analogies which are instantly recognisable to people form their day-to-day life.

Different kinds of companies see themselves as tech companies now, or they want to be tech companies, do you see Pearson doing the same?

Our goal is to be a learning company that deploys technology and platforms to empower far more people to progress in their life through learning. We see a world of talent and a world of opportunity and we want to make sure that talent makes the most of opportunity. We see technology as the means by which we achieve that rather than the end in itself. And I think that is important that the very best companies in the world are those that are purpose-driven.

India is a very different market compared to the U.S. or the U.K., especially when it comes to digital classrooms, and students with digital access. How does that have an effect on your strategy in India?

All digital products and platforms we are developing worldwide, we want to put in the hands of Indian learners and consumers. But I think the three big digital initiatives in India that we are very excited about are: MyPedia, a learning platform which connects teachers and students and parents, that has started to get real traction and growth, it has also been adapted for other markets like Latin America, Brazil, and the Middle East, and South Africa and the like. Second we are developing product called MePro, which is about helping professionals prepare for the next stage in their career, and that’s again an online, cloud-based platform. And the third one is the Pearson Test of English, which is digital enabled and fully online.

You are also looking at short courses, and professional courses.

You will find a growing number of people in India or around the world, who have a university degree, but they realise they need some more career relevant qualification or training to get a promotion, to help them change careers. We have invested with a lot of big brand universities form both the U.K. and Australia to take short courses in, often technology, like data, analytics, system security, AI, machine learning, and take a three or six month course and get a certificate from that university.

It is said that AI is what will distinguish how people engage with content, how are you using AI?

Although a lot of companies are talking about AI, a large number of them are only using it for fairly routine, back office, and less likely using it in customer facing. As an example, we have an essay marker in development, this is embedded into our integrated digital products. So you set an assessment, and students write their answers. So if it is an essay, you would mark the first twenty or so yourself, and the machine learns your marking style, and it can mark the others. At any point, the teacher can say that they would have marked something differently, the machine will (learn that). We are also working with Microsoft in China on how we could use AI to support English for much younger students.

Do you worry about edtech companies like Byju’s in India, Khan Academy, or Coursera, are they competition for you?

They are part of the wider ecosystem that is digital learning, and sometimes they will be direct competitors to us, other times they may be complementary. The important thing is, there is a lot of learning to go around. There is such a big market and lot of opportunity and we can learn and share.

How important is the Indian market for you?

India is a land of huge potential and opportunity, but relatively small in revenue terms and so the temptation is to not worry about it too much. But it will be a huge mistake. This is going to be one of the biggest economies in the world, it has a young population that is desperate for education and learning, and frankly India can’t build enough physical universities to match the population growth rate plus as participation goes from 25% to 50%, that’s a huge expansion in the university sector. None of those are ones I can have in my three-year plan, because those are on a longer time scale than that, that is why you have to invest, you have to believe in India, and you have to keep at it.

Do you have any revenue targets for India, and what is the kind of growth you are looking at in the country?

We are looking to grow double digits each year.