Financial Education

With a vibrant demographic, India is poised to set the scene for rapid economic growth in the coming years. In light of these facts, financial education and entrepreneurship skills across all primary and secondary school levels is a step in the right direction for India and partnering with organizations like VentureVillage, who put their best foot forward in implementing educational best practices is definitely the way forward

We have come across the adage of ‘change being the only constant’ all too often. But, what does this mean and how is it relevant to us is an important question to address. In the last 20 years or so, in fact, the concept of change has taken on a different meaning altogether due to the rapid technological advancements that have taken place. This has brought on a generation of people that are tech-savvy and who would like to, constantly be on their toes with regard to the latest trends. The onset of technology has had trickle down effects on various other aspects of life too. A case in point is a vast majority of people embracing the idea of financial independence and starting up their own businesses, commonly called as ‘start-ups’ quite early in their lives due to the sheer availability of technological channels and financial resources at their disposal.

This demands a learning ecosystem which identifies with this pace of change and adapts accordingly. This is the reason we see that, nowadays, even at the school level, various engagements such as workshops are conducted to introduce to students the concepts of entrepreneurship and financial literacy. Though, the journey of primary and secondary education is transforming across geographies, there are still a lot of challenges to overcome in this space. Therefore, we can safely conclude that these skills are in demand in the outside world and introducing them at the primary education level is a step in the right direction.

The cornerstone of primary education in many developed regions such as the US and UK is the public schooling system. Other European nations such as the Netherlands, Sweden, and Finland among others are also not far behind. The percentage of Gross Domestic Product (GDP), a country spends on education can be taken as a proxy for how successful the education model is, in that respective country. According to data from World Bank, as of 2016, the top spending countries are the Scandinavian countries (Norway, Sweden & Finland), the United Kingdom, Australia and New Zealand. These countries have spent greater than 5% of their GDP towards education. Unsurprisingly, these countries’ quality and infrastructure of the public schooling system, is quite superior and robust.

Going forward, we would explore the approaches to integrate financial education and entrepreneurship skills into the school curriculum, the Finnish education model, a couple of brief case studies from New Zealand and Singapore and how a Finnish education start-up – VentureVillage is changing the way education is provided and paving the way forward for schools in Finland and India.

Financial Education in Schools

The International Network on Financial Education (INFE), a network set up by the Organisation for Economic Co-operation and Development (OECD), provides a platform for various governments and education sector players to come together and exchange views and discuss education policies at length. They work effectively towards crafting guidelines and frameworks for the respective national governments to implement.

A widely held research shows that when children learn about financial literacy at an early age itself, they learn to manage money better when they become adults. Furthermore, the ever rising student debt is a testimony to the fact that students need guidance on how to handle personal finances better. The seeds of learning have to be sown early for the skills to be fully developed when these children rush off to college.

According to established research, they can be incorporated into various other subjects enabling what is essentially termed as a cross-curricular approach. An example in this regard is introducing financial education concepts in the subject of Mathematics and integrating entrepreneurial aspects in business studies. The other way is to teach these skills as stand-alone subjects. While doing all this, the teachers also have to be taken care of. They are to be provided with constant pedagogical tools consistent with the current technological trends.

If we look at the likes of top management schools such as Harvard and Wharton, the teaching methodology, more often than not always involves case studies as an instrument of learning. Taking a leaf out of their books, this approach can be adopted here, albeit, on a smaller scale.

Experiential learning is another proven method of learning which is being followed increasingly in schools with the help of private educational organizations. An example in this regard is a module offered to schools, called ‘FutureCity’ by a Finnish organization – VentureVillage. This module focusses on promoting knowledge on work life, money, circular economy, digital economy and entrepreneurship. This involves a live workshop where students can learn about setting up businesses and at the end of the workshop, they run a simulated city where different students are responsible for different departments. For example, some act as shopkeepers, some as government officials and others as entrepreneurs. This exercise helps in inculcating the skills of sales, marketing and teaches children how to effectively handle their finances.

Entrepreneurship Skills in School

As initially stated, these skills are very important in today’s world and students worldwide have to be taught these skills right when they step into formal education. We are living in such a fast paced world that new industries are born with the click of a button on a smartphone such as the digital payments industry. Learning such skills at an early age allows students to unleash their creativity and imagination which otherwise dies a mundane death if not applied anywhere. The power of innovative thinking has to be fostered early on in these young minds.

FutureCity is open for Business
FutureCity focusses on promoting knowledge on work life, money, circular economy, digital economy and entrepreneurship

There are a number of innovative ways to foster innovation in children during class time. A dedicated hour could be provided to children wherein, they would work in groups and come up with ideas on how to build something or start something of their own. After this exercise, these ideas can be bounced off against each other to help children understand the different ways of thinking and, therefore, different perspectives. Workshops and various events could be conducted in collaboration with third party education solutions provider which would help in broadening the horizon of these children.   

The Finnish Education Model

Taking the case of Finland, the Finnish education model is quite well known for its quality and efficiency. The tenet of free and accessible education, at least up till the secondary level is widely established here. The pro-active role of the government in shaping and executing the education policy in this country is commendable. It is important to note here that Finland started to ramp up their education efforts from the early 2000s itself and around the turn of the decade cultivated an education system that was unparalleled. Let us delve a bit deeper into what is responsible for this sustained success. Primarily, the onus is put on the students, that is, a culture of learning rather than testing is developed. This is in sheer contrast to some education models such as those followed in India where students end up giving tests for the better part of a whole school year. An often overlooked factor is accessibility of this quality education to all Finnish children. According to a survey conducted by the OECD, the differences between weakest and strongest students are not much and in fact, this gap is the least in Finnish children, since all children are cared for and are provided the same standard of education. The notion of ‘homework’ that we all dread or used to dread as children is non-existent in Finnish schools. Other countries which, too are successful, follow a similar approach.

The comprehensive focus towards education is what makes this education model robust and thereby, fuelling innovative practices to further the goal of providing top class education. This is where the role of integrating financial literacy and entrepreneurship education comes into the picture. Enabling a cross-curricular approach is the commonly adopted practice and it is easier for countries like Finland and New Zealand to adopt this approach as the learning and development framework is quite flexible and open to changes. With the entry of many third party players working for, and promoting the standard of education across the globe, the process of imparting new skills to the students has become easier for schools.

Based on the Finnish education model, an education startup – VentureVillage, based in Espoo, Finland offers modules to schools for them to involve it in the curriculum and instill useful life skills in students. The additional value of these programmes lie in the fact that these are customisable programmes. With these skills being amiss in the Indian school curriculum, this customisation has enabled them to venture out to India and implement these programmes in schools in Kochi in India.

Case Study – New Zealand

New Zealand includes financial education through a cross-curricular approach. In 2018, a passionate individual named Edmond, partnered with a software developer, an entrepreneur and an ex-principal to introduce MoneyTime, a platform to propagate financial literacy among school children. They designed the sessions in accordance to a structure that enabled it to easily fit into the subjects of English, Mathematics and Social Science. The interesting thing to note is that they have incorporated quizzes on their platform which allow students to get a chance to earn real money, on giving correct answers. This acts as an incentive to students to learn and engagement levels go up. The feedback has been overwhelmingly positive from teachers and other staff faculty. Another programme called the ‘Sorted in Schools’ programme aims to bring equitable access to financial education to all children in the age group of 9-13 years, by 2021.

There are a wide variety of entrepreneurial secondary school programmes in New Zealand which focus on imparting skills like enterprise planning, the future of work and a host of other 21C skills (skills for the 21st century). For the primary level, a young enterprise programme named ‘Enterprise 4 Kids’ integrates enterprise, social sciences and technology education.

Case Study – Singapore

Singapore’s education model is contrasting to education practices followed in other countries such as New Zealand and Finland. It is somewhat similar to the Indian educational system as it focusses on giving out lectures/classes based on a set curriculum and then measuring performance through rigorous assessments and examinations. Moreover, teachers are heavily dependent on textbooks as a medium of instruction. But, the reason why this type of model has fructified into being one of the best in the world is because this strategy is centralized and heavily funded, thus, a consistent standard of education is maintained throughout the network of schools.

They recognize financial education and entrepreneurship to be essential skills for the 21st century. They have a national financial education programme, ‘MoneySENSE’. This programme involves educating children during their morning assembly sessions and then quizzes are also conducted to gauge the level of understanding the students have gained. The Ministry Of Education (MOE) provides the teachers with a vast amount of resources to promote the concepts of financial literacy in their classrooms. Online stock investing games, board games and workshops form the backbone of financial education provided to students.

In what can be termed as a revolutionary move, some chains of Singaporean preschools are teaching kids on how to become entrepreneurs. Daily 30 minute sessions on how to sell goods and practical experiments by setting up lemonade stalls for the kids to sell lemonade help a long way in instilling these type of skills in kids.

From the above two brief case studies, we can see how two educational models at opposite ends of the spectrum, not in terms of quality but the mode of operations, excel equally.

Challenges Facing India and Solutions

India is the second largest populated country and it is expected by the end of this year that the average age of our population would be around the figure of 29 years. With such a large population ready to go to work, they need to be armed with the requisite skills and education. Unfortunately, a considerable percentage of the educated youth also find themselves unemployed. Addressing this problem requires going to the root of the problem which is the lack of proper education or no education at all.

This is where organisations like VentureVillage can intervene and along with the schools, chart a path for students which involves them learning financial literacy and entrepreneurship skills as well. Another suggestion would be for companies like VentureVillage to partner with Non Governmental Organisations (NGOs) in this space to provide consistent quality of education to everyone, be it a private school student or a government school student.

It is no secret that this is an uphill task but slowly and steadily the face of education can be changed in this country. The success VentureVillage has gained in Kochi is a testimony to this fact. With a vibrant demographic, India is poised to set the scene for rapid economic growth in the coming years. In light of these facts, financial education and entrepreneurship skills across all primary and secondary school levels is a step in the right direction for India and partnering with organizations like VentureVillage, who put their best foot forward in implementing educational best practices is definitely the way forward.   

Author: Arjun Vasant Kumar (MBA Finance from NMIMS Mumbai)