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< Back Technological Advancements in Solar Power Generation by Samyukhta Kannan Bell Laboratories created the first silicon solar cell in 1954. This breakthrough sparked a flurry of new discoveries in the field of solar energy. Solar energy is the radiant light and heat from the Sun that is captured and used in a variety of methods. The technological advancements since have shown the growing potential to use this as a reliable energy source. INTRODUCTION Solar energy is the radiant light and heat from the Sun that is captured and used in a variety of methods, including solar power to create electricity, solar thermal energy, including solar water heating, and solar architecture. It is an important source of renewable energy, and its methods are roughly classified as either passive solar or active solar, depending on how they capture, distribute, or convert solar radiation into solar power. The meaning of active and passive solar power generation becomes very important. To harness the energy, active solar techniques such as photovoltaic systems, concentrated solar power, and solar water heating are used. Orienting a structure to the Sun, selecting materials with favourable thermal mass or light-dispersing qualities, and designing rooms that naturally circulate air are all examples of passive solar techniques. Bell Laboratories created the first silicon solar cell in 1954. This breakthrough sparked a flurry of new discoveries in the field of solar energy. In the 1960s, the space industry was the first to use solar technology to create electricity for spacecraft. The first artificial earth satellite, Vanguard 1, was powered by solar cells. It was the oldest instance of a man-made satellite in orbit, clocking in at a massive 6 billion miles. TECHNOLOGIES Photovoltaic The photovoltaic effect is depicted on a band diagram. In the depletion or quasi-neutral areas, photons transfer their energy to electrons. These transition from the valence to the conduction bands. Electrons and holes are propelled by a drift electric field Edrift, which produces generation photocurrent, or by a scattering electric field Escatt, which produces scattering photocurrent, depending on their location. Alexandre deciphered the photovoltaic effect, or how to generate an electric current in a conductor exposed to direct sunshine. Later, scientists conducted more advanced research in order to use PV technology, which can directly produce power. Electricity can now be used, stored, or converted for long-distance transmission. PV devices are capable of converting sunlight into electrical energy. A "cell" is a single PV device. PV cells are often constructed from various types of silicon. A single PV cell is typically tiny and can provide roughly 1 or 2 watts of power. To boost the output of PV cells, they are linked together in chains to form bigger units known as "modules" or "panels." Modules and panels can be used separately or in groups to construct arrays. To complete a PV system, one or more arrays are connected to the electricity grid. Solar PV is primarily installed on rooftops of homes and businesses nowadays, and it directly creates electricity from solar energy. Solar thermal technologies turn the sun's energy into heat, which is then converted into electricity. Floatovoltaics Floating solar or floating photovoltaics (FPV), also known as floatovoltaics, is the installation of solar panels atop a structure that floats on a body of water, generally a reservoir or a lake. Silicon panels are becoming less expensive and more efficient by the day. Photovoltaic panels put on reservoirs and other bodies of water, according to experts, provide even more efficiency as well as a slew of other advantages. The fundamental advantage of floating PV plants is that they do not require any land, except for the little areas required for the electric cabinet and grid connections. Their cost is equivalent to that of land-based plants, yet they give an excellent option to prevent land consumption. Floating PV plants are more compact than land-based plants, have simpler administration, and are easier to build and decommission. The major aspect is that there are no fixed structures, such as the foundations needed for a land-based plant, therefore their installation is completely reversible. Another advantage is that the partial covering of basins can minimise water evaporation. This outcome is determined by the climate and the fraction of the covered surface. This is a significant advantage in dry climates such as portions of India since it saves around 30% of the evaporation of the covered surface. This may be bigger in Australia, and it is a highly desirable quality if the basin is utilised for irrigation. There are several other advantages to the new floatovoltaic technology. A big floating platform may be readily manoeuvred and can also do vertical tracking. This can be done without wasting energy or without a sophisticated mechanical equipment as in land-based PV plants. The cost of outfitting a floating PV plant with a monitoring system is minimal, and the energy increase can vary from 15 to 25 percent. Installed capacity worldwide in MV.: Floating solar farms can help with water management in addition to providing clean solar energy. They prevent water loss due to evaporation by restricting air movement and blocking sunlight from the water's surface. Furthermore, floating solar farms reduce the generation of harmful algae, cutting water treatment expenses. Furthermore, the water beneath the solar panels keeps them clean and reduces energy waste. The presence of water naturally indicates the use of gravity energy storage, particularly in conjunction with hydroelectric basins. Other methods, however, have been investigated, with compressed-air energy storage devices being proposed in particular. However, there are certain challenges that are associated with this technology. Electrical safety and the long-term dependability of system components is in question. Operating on water for its full-service life, the system must have greatly higher corrosion resistance, especially when built over salt water. The floating PV system must be able to endure wind and high waves, particularly in off-shore or near-shore deployments. Maintenance complexity is also to be considered. In general, operations and maintenance tasks on water are more difficult to conduct than on land. Photovoltaic noise barrier In 1989, Switzerland showed an effective method of noise reduction using solar modules. Later, the solution was implemented in a number of additional European nations. Different solar noise barriers may be developed based on highway characteristics, barrier structure, barrier height, and other factors (environment etc.). Modules are attached to the main barrier (wood or solid barrier) in a variety of methods, including vertical, inclined fixed as a zigzag construction, and so on. Perovskite solar cell The mineral calcium titanium oxide, which was the first perovskite crystal found, has the same structural structure as perovskite. A perovskite solar cell (PSC) is a form of solar cell in which the active layer is a perovskite-structured substance, often a hybrid organic-inorganic lead or tin halide-based material. Perovskite materials like methylammonium lead halides and all-inorganic cesium lead halides are cheap and simple to make. Perovskites are a type of material with a similar structure that exhibits a number of intriguing features such as superconductivity, magnetoresistance, and others. Because of their unusual structure, which makes them perfect for allowing low-cost, effective photovoltaics, these readily produced materials are viewed as the future of solar cells. They will also be used in next-generation electric car batteries, sensors, lasers, and other applications. A perovskite solar cell is a form of solar cell in which the light-harvesting active layer is a perovskite structured compound, most typically a hybrid organic-inorganic lead or tin halide-based material. Advantages Metal halide perovskites have unique features that make them appropriate for use in solar cells. Perovskite materials may be employed not only as a light-absorbing layer but also as an electron/hole transport layer due to its high extinction coefficient, high charge mobility, long carrier lifetime, and long carrier diffusion distance. Raw materials and production technologies (such as different printing techniques) are both affordable. Ultrathin sheets as thin as 500 nm may absorb the whole visible sun spectrum due to their high absorption coefficient. Using this compositional flexibility, scientists may create perovskite crystals with a wide range of physical, optical, and electrical characteristics. Ultrasound machines, memory chips, and, most recently, solar cells all use perovskite crystals. When these properties are combined, low-cost, high-efficiency, thin, lightweight, and flexible solar modules may be created. Perovskite solar cells are being employed to power low-power wireless circuits used in ambient powered internet of things applications. While perovskite solar cells have grown extremely efficient in a relatively short amount of time, they still face a number of obstacles before becoming a viable commercial technology. However, State-of-the-art PSC technology has a long way to go before it is commercially viable. PSCs are weak and durable, in addition to having a low electrical conversion efficiency. Furthermore, they contain trace levels of lead, which is harmful to the environment. BIPV solar technology Traditionally, solar is installed on the roof of a building, which is known as building-applied PV. However, more architects are learning how to integrate solar cells and modules into items such as curtain walls, roof tiles, and railings. BIPV stands for building-integrated photovoltaics. BIPV is an exciting new technique in solar energy generation. The concept is to naturally combine solar power plants with building design. These integrated solar systems may minimise the consumption of fossil fuels, save money on materials and power, and add architectural flair to a structure. The elements utilised in BIPV construction can not only generate power, but also protect the building from rain and wind, as well as increase thermal and acoustic insulation. They may also be utilised for a variety of purposes such as facades, rooftop canopies, and balconies. They can aid in GRIHA (Green Rating for Integrated Habitat Assessment), India's green building rating, by minimising solar heat gain on a building and thereby lowering the temperature of the building, resulting in decreased air conditioner demand. Because industrial buildings and organisations are reported to consume over 40% of all energy, BIPV might turn out to be a sustainable option that can help reduce greenhouse gas emissions. Some of the potential applications for BIPV technology in buildings include: Tile: Photovoltaic modules can be used to replace cement or clay tile on a building's roof. Solar radiation can flow through electric tiles, although they are virtually indistinguishable from regular roof tiles. Roofing Roll Coverage: A thin-film laminate that combines the qualities of bitumen covering and the solar battery is the ideal soft tile or roofing coverage substitute. Wall Panels: Instead of traditional wall panels, modern architects are increasingly employing solar batteries as façade panels. Windows (Glazing): "Solar Windows" are transparent thin-film solar batteries that can be adhered to glass, however their poor productivity is an issue. However, efforts are presently being made to integrate photo-electric components directly into the glass itself. All of these BIPV modules may be simply installed as rooftops, facades, curtain walls, carports, and parking lots in residential, commercial, and industrial structures. BIPV systems can either be connected to the utility grid or intended to operate independently.Many BIPV module manufacturers in India can provide BIPV modules that can replace conventional construction materials while also delivering utility-grade power. Semi-transparent BIPV modules manufactured by HHV Solar have created new landscapes in green construction. Other firms, such as Navitas Solar and Maglare, specialise in the glass panels of BIPV modules that can replace glazing parts of the building, while Novergy Solar, a BIPV solar panel expert, provides a wide selection of BIPV solar panels that can be integrated with the design of the structure. This game-changing technology elevates solar power and sustainable living to new heights. It enables architects, designers, and clients to incorporate hi-tech features into traditional building designs, transforming the structure into an appealing energy-generating structure. Solar Skins The adage "looks don't matter" is rarely applicable in the solar sector. Solar panels are typically designed to be visually appealing. The finest companies provide panels that are visually appealing and blend nicely with most traditional rooftops. However, when placed on rooftops, as is frequently the case, the majority of solar panels on the market do not integrate well with the majority of rooftops. They make their presence known on roofs in potentially unsightly and distracting ways. Sistine Solar was developed in 2012 by graduate students at the Massachusetts Institute of Technology (MIT). They sought to expand the effect of Industrial and UX Design into the solar technology sector and produce superior product aesthetics, which they claim might lead to increased sales. The fruits of their labour led to the solar skin When exposed to sunlight, solar skin is a flexible, translucent material that is very thin yet very effective at creating an electrical current. Consider it a thick strip of saran wrap that can be placed to practically any surface—the exterior of a house, a car, a utility pole—almost anything! The applications might be expanded to include consumer electronics as well. Soon, solar skin for your smartphone will be available, and charging it will be as simple as placing it in direct sunshine. Solar skins are not the same as solar panels. They are very long-lasting graphic film appliqués that are tailored using a proprietary algorithm to aesthetically merge with an existing or new array of solar panels in ways that complement the roof aesthetic without compromising solar panel efficiency and productivity. Solar skin contains billions of small photoelectric particles known as 'Quantum Dots.' When these particles are exposed to photons, which are the primary constituents of sunshine, they get excited. The problem with solar skin up to this point has been its low efficiency. However, researchers at the University of Queensland have discovered a means to increase this efficiency by 25%, resulting in solar skin with an overall efficiency rating of 16.6 percent. This indicates that 16.6 percent of the potential solar energy exposed to the solar skin is efficiently transformed into electricity. High-efficiency solar panels, on the other hand, are around 19-22 percent efficient. This implies that solar skin is rapidly reaching "prime time" for commercial and residential applications. Solar fabric When exposed to light, photovoltaic (PV) cells embedded in solar cell fabric create energy. Traditional silicon-based solar cells are costly to produce, inflexible, and brittle. Thin-film cells and organic polymer-based cells, while less efficient, may be made fast and cheaply. They are also malleable and may be sewn onto cloth. According to a New Scientist article, researchers created a small cylindrical cell by building a PV cell in the layers around a fibre. Solar gathering is no longer restricted to rooftops and poles; it may now operate quietly and unobtrusively from ordinary things. Humanitarian help can benefit from flexible solar cells. The PowerShade, a temporary shelter invented by PowerFilm, Inc., can generate one kilowatt of power. This might be useful for powering emergency equipment in remote locations on short notice. Konarka Technologies makes a thin film polymer-based PV cell that is sewn into a cloth. Further research on nanocrystal PV cells will be required to make these cells even smaller. In principle, nanotechnology might allow cells to gather a wider range of photons, boosting efficiency while shrinking. Konarka is collaborating with other institutions on this. Photovoltaic noise barriers (PVNBs) Photovoltaic noise barriers (PVNBs) are a hybrid of noise barrier and photovoltaic (PV) systems. Noise barriers are physical barriers that are used to reduce noise levels between noise sources and sensitive receptors such as hospitals, schools, and residential areas. Solar cells are used in photovoltaic systems to convert light energy directly into electricity. PVNBs, which were first used in Switzerland in 1989, are now seen in a number of nations where transportation authorities have tried to reduce noise while also producing renewable energy. The research on PVNBs, the most of which is many years old, largely agrees that there is tremendous potential to create solar electricity using both current and proposed new noise barriers. A highway noise barrier is a physical barrier built between the highway noise source and the noise sensitive receptor(s) that reduces noise levels near the receptor in decibels (dB). Noise barriers include stand-alone walls, berms, and combined berm/wall systems made of various materials such as soil, wood, concrete, and metal. They dampen noise by reflecting it back across the roadway or requiring it to take a longer route over and around the barrier. Although they do not fully eliminate noise, noise barriers often lower total noise levels by 5 to 10 dB, essentially cutting traffic noise in half. The photovoltaic noise barrier (PVNB), also known as the solar noise barrier, is a mix of noise barrier systems and photovoltaic (PV) systems that employ solar cells to directly convert light energy into electricity. PVNBs can be either retrofitted into existing noise barriers with PV modules (i.e., solar panels) or integrated into the construction of new noise barriers. The noise barrier acts as a substructure for PV modules in both scenarios. The most typical PVNB solution is top-mounted, retrofit designs that provide extra area to an existing noise barrier structure. SOLAR: A PROMISING FUTURE Previously, solar energy was solely generated by ground-mounted or rooftop panels. However, as a result of the developments outlined above, solar will become lighter, more flexible, and applicable everywhere. Imagine you had all of this technology and you go to another city. You can buy food from a solar-powered food cart, eat it while driving down a solar-powered highway, and charge your phone with solar-powered clothing. This is how the near future seems! In fact, many additional revolutionary household solar solutions are in the works or will be available in 2022. Perovskite solar cells, which might soon be used to make solar paint, are one of the most promising new technologies. Previous Next

A flagship monthly series of mentoring talks by Podar Eduspace, bringing together industry CEOs and veterans with decades of leadership experience. Follow our events calendar to join the next scheduled talk. You can listen to the previously held conversations in the video links provided below. Podar Conversations A flagship series of mentoring talks by Podar Eduspace, bringing together industry CEOs and veterans with decades of leadership experience. Follow our events calendar to join the next scheduled talk. You can listen to the previously held conversations in the video links provided below. March 2022 - Podar Conversations with Rakesh Wahi, Co-Founder of Forbes Africa Magazine and CNBC Africa In this conversation, Wahi talks on "Lessons on Entrepreneurship and Leadership: From a Soldier who Dared to Dream" through his business experiences all around the globe April 2022 - Podar Conversations with PD Singh, Managing Director and Head of Corporate Banking, J.P. Morgan In this conversation, P D Singh talks on "Lessons on Leadership and Banking" through his 25 years of experience in the Finance Industry

< Back Consumer Behavior by Asiya Agarwal For businesses aiming to thrive in competitive markets, understanding consumer behaviour is essential. It guides the development of effective marketing strategies that align with consumer needs and desires. Introduction Consumer behaviour refers to how individuals or households decide what to buy, use, and discard. It is influenced by psychological factors such as perceptions, motivations, and attitudes, as well as cultural influences that shape preferences and purchasing habits. For businesses aiming to thrive in competitive markets, understanding consumer behaviour is essential. It guides the development of effective marketing strategies that align with consumer needs and desires. In this article, we begin by defining consumer behaviour and exploring its key aspects, followed by delving deep into the psychological factors that underpin it. We then turn our attention to understanding consumer behaviour in India, which is a complex subject owing to the country’s diverse cultural tapestry and economic disparities. This diversity presents both unique opportunities and challenges for businesses. Lastly, through insightful case studies from the retail industry, we analyse how businesses have successfully applied consumer behaviour concepts to drive growth and capture market share. We also examine instances where strategies have faltered, providing valuable insights into the complexities of consumer behaviour and market economics. Defining Consumer Behaviour Consumer behavior refers to the study of how individuals, groups, or organizations select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires. This study involves examining the decision-making processes and the actions that precede and follow these activities. It also involves analyzing various influencing factors, including psychological influences (such as perceptions, motivations, and attitudes), social influences (such as family, friends, and cultural norms), and situational factors (such as physical environment and time constraints). Key aspects of consumer behaviour Decision-Making Process: This is the whole process from realizing a consumer need something to looking at different options, making a choice, and then later thinking about how happy they are with their decision . For example, when buying a new phone, you first notice your old one is slow and takes poor pictures ( Problem Recognition ). You then research different phones online, comparing features and prices ( Information search and Alternative Evaluation ). After careful consideration, you choose a model that fits your budget and has the features you desire ( Purchase Decision ). Once you begin using it, you might find that it takes great pictures but drains the battery quickly ( Post-purchase Behavior ). Influences on Behaviour: Many things can affect why and how individuals buy something. This includes their culture, what their friends and family think, how they feel about things, and even how much money they have. For instance, when deciding on a laptop for college, friends may recommend a trusted brand ( Social influence ), while family preferences may favor a particular brand that they are use to ( Cultural influence ). You may prioritize a lightweight design for portability ( Personal Preference ) , also shape buying decisions. Types of Buying Decisions: Buying decisions vary from routine purchases (like groceries) to complex buying decisions (like buying a car). Routine purchases are often automatic and based on habitual choices, while Complex decisions involve extensive research and comparison. For example, grocery shopping weekly is a routine purchase, where familiar brands are chosen with minimal consideration. In contrast, choosing a car involves significant research and deliberation due to its importance. Post-Purchase Behaviour: Post-purchase behavior refers to the feelings and actions after buying a product. Positive post-purchase behavior occurs when satisfaction leads to recommendations and repeat purchases. Conversely, negative experiences may result in disappointment and a shift to other brands. For example, enjoying a new video game may lead to recommending it and purchasing additional features ( Positive post-purchase behavior ), while encountering bugs and frequent crashes may lead to frustration and a decision to avoid future purchases from that developer ( Negative post-purchase behavior ). Psychological Factors Influencing Consumer Behavior Consumer behavior is profoundly shaped by various psychological factors that influence how individuals interpret information, make decisions, and form perceptions about products and brands. Understanding these psychological influences is crucial for marketers aiming to effectively engage consumers and drive purchasing behavior. 1. Perception: Perception is how consumers interpret and make sense of the information they encounter. Va rious factors can influence perception, including the consumer’s past experiences, expectations, and cultural background. Marketers strategically influence perception through visually appealing advertisements, strong branding, and strategic product placement to shape favorable perceptions of their offerings. a. Visual Appeal: Creating visually appealing advertisements and packaging that attract attention. For example, Apple Inc. uses sleek, minimalist designs in its product packaging and advertisements to convey a sense of sophistication and high quality. b. Branding: Establishing a strong brand identity that conveys quality and reliability. For instance, Nike consistently reinforces its brand through its iconic swoosh logo and "Just Do It" tagline, ensuring that consumers associate its brand with athletic excellence and motivation. c. Product Placement: Positioning products in high-visibility areas in stores to increase the likelihood of consumer notice. For instance, in grocery stores, brands like Coca-Cola pay for prime shelf space at eye level to ensure their products are easily seen by shoppers. 2. Motivation: Motivation refers to the internal driving forces that compel consumers to take action. Various factors, including personal needs, desires, and goals, can influence motivation. Marketers capitalize on consumer motivation through promotional offers, limited-time deals, and loyalty programs that incentivize purchases. a. Promotional Offers: Offering discounts, coupons, and special deals to create a sense of urgency and value. For example, Amazon’s Prime Day offers significant discounts on a wide range of products, motivating consumers to make purchases during the limited-time event. b. Limited-Time Offers: Creating a sense of urgency by providing time-limited deals that encourage immediate action. Fashion retailer Zara often releases limited edition collections, prompting fashion-conscious consumers to buy quickly before items sell out. c. Loyalty Programs: Implementing reward programs that incentivize repeat purchases. Starbucks’ Rewards program offers points for every purchase, which can be redeemed for free drinks and food items, motivating customers to return. 3. Learning: Learning involves changes in behaviour resulting from experiences and information acquisition. Marketers use various techniques to help consumers learn about their products and develop preferences. a. Free Trials and Samples: Offering free samples or trials to let consumers experience the product first-hand. Cosmetics brand Sephora provides free samples of perfumes and skincare products, allowing customers to try before they buy. b. Educational Content: Providing information through tutorials, demonstrations, and detailed product descriptions to educate consumers. For instance, Reliance Digital offers in-store workshops and online tutorials to help customers understand and use electronic gadgets effectively. c. Consistent Messaging: Reinforcing brand messages across different platforms to ensure consumers remember and recognize the brand. For example, Coca-Cola maintains consistent branding and messaging across its global advertising campaigns, reinforcing brand identity. 4. Attitudes and Beliefs: Attitudes are consumers’ evaluations of a product, while beliefs are the convictions they hold about it. Marketers aim to shape positive attitudes and align with consumers' beliefs to foster brand loyalty. a. Social Proof: Leveraging testimonials, reviews, and endorsements to build credibility and trust. Glossier, a skincare and beauty brand, extensively uses customer reviews and user-generated content in its marketing to create a community-driven brand image. b. Cause Marketing: Associating the brand with social causes that resonate with consumers' values. Outdoor apparel brand Patagonia promotes environmental sustainability and donates a portion of its profits to environmental causes, aligning with the values of its eco-conscious customers. c. Emotional Appeals: Crafting messages that evoke positive emotions such as happiness, nostalgia, and trust. Coca-Cola’s “Share a Coke” campaign, which replaced the brand logo with popular names, evoked feelings of personal connection and joy. Understanding these psychological factors enables marketers to tailor strategies that resonate with consumer behaviors, effectively driving engagement, satisfaction, and brand loyalty. Consumer behaviour in India: Influencing factors India's consumer behaviour is shaped by a complex interplay of cultural, economic, social, and technological factors. Understanding these dynamics is crucial for businesses aiming to succeed in this diverse market. Cultural Factors - India's cultural diversity results in wide-ranging consumer preferences across regions. For example, traditional clothing choices vary significantly: in Tamil Nadu, silk sarees are preferred, whereas Bandhani fabrics are popular in Gujarat. Effective marketing strategies must be localized to cater to these regional preferences. Furthermore, India's communal and family-oriented culture influences purchasing decisions, with major purchases like cars or homes often made collectively by the entire family. Understanding and appealing to these family values are essential for businesses. Economic Factors - India's population spans a broad economic spectrum, from affluent urban residents to rural inhabitants with limited income. This economic diversity influences consumer behaviour in various ways. Wealthier consumers often seek luxury products, while lower-income consumers prioritize affordability and practicality. The growing middle class in India is a significant driver of consumer spending. This group is more willing to experiment with new brands and technologies and demands a mix of premium and essential products. Their increasing purchasing power fuels the demand for a wide range of goods, making them a critical target for businesses. Social Factors - Improving literacy rates and education levels in India have created more informed consumers. These educated consumers are more discerning and often research products and brands extensively before making a purchase. Rapid urbanization is also transforming consumption patterns. Urban consumers generally have higher incomes and are more likely to adopt modern retail formats and online shopping. This shift towards urban living and higher education levels makes it essential for businesses to focus on providing detailed product information and leveraging modern retail channels. Technological advancements - The widespread use of the internet and smartphones has revolutionized the Indian retail landscape. E-commerce platforms like Amazon, Flipkart, and local startups have made online shopping convenient and accessible, even in smaller towns and rural areas. Social media platforms such as Facebook, Instagram, and WhatsApp play a significant role in shaping consumer behaviour. Influencers, peer reviews, and digital marketing campaigns heavily influence purchasing decisions, particularly among younger consumers. These platforms allow businesses to reach a broad audience and engage with consumers directly, making them indispensable tools for modern marketing strategies. Case Study: Adaptation of Marketing Strategies for Indian Market India's retail industry, catering to a population exceeding 1.4 billion, has witnessed substantial evolution. Success in this dynamic landscape necessitates localized marketing approaches that cater to regional preferences and cultural nuances. Businesses must adeptly navigate economic disparities by offering tiered pricing strategies that accommodate diverse income groups. Leveraging digital technologies enables personalized consumer experiences and facilitates regional adaptations through multilingual support and localized payment methods. Social media and influencer marketing strategies are instrumental in enhancing brand visibility and connecting with socially conscious consumers. Effective engagement with Indian consumers requires a nuanced understanding of their diverse preferences, economic realities, and cultural dynamics. Here is an analysis of how global and local brands such as Reliance, IKEA, and Amazon customize their marketing strategies to effectively engage with Indian consumers. IKEA Case Study IKEA's strategic entry into the Indian market exemplifies its ability to adapt to local consumer behavior while maintaining its global brand identity. Understanding key aspects of consumer behavior and psychological factors influencing consumer behavior were crucial in their approach. Decision-Making Process Problem Recognition: IKEA identified the need for affordable, stylish, and space-efficient furniture suitable for diverse living spaces in urban India. For example, they introduced modular furniture designs that optimize space without compromising on aesthetics, catering to all kinds of urban homes. Information Search and Evaluation: To facilitate informed decisions, IKEA provided comprehensive product information both online and in-store. Consumers could explore various options and compare features, prices, and styles before making a purchase decision. This approach ensured transparency and empowered consumers in their choices. Purchase Decision: IKEA implemented a pricing strategy that offered a range of products from budget-friendly options to premium items. This allowed them to cater to different consumer segments while maintaining quality and affordability. For instance, their "under ₹200" product range included essential household items accessible to budget-conscious consumers. Post-Purchase Behavior: IKEA focused on enhancing the post-purchase experience by offering installation services, warranties, and after-sales support. This commitment to customer service aimed to ensure satisfaction and build long-term relationships with consumers. Psychological Factors Influencing Consumer Behavior Perception: IKEA’s store designs and product displays integrated minimalist Scandinavian aesthetics with localized elements, creating an inviting shopping environment. For example, their Hyderabad store featured Indian artwork and a restaurant serving local cuisine, enhancing the cultural connection and overall shopping experience for consumers. Motivation: To encourage purchases, IKEA leveraged seasonal discounts, loyalty programs, and exclusive member benefits. Special events like "Family Day" offered additional incentives for loyal customers, fostering continued engagement and brand loyalty. Learning: IKEA educated consumers through online tools, workshops, and interactive displays that helped them visualize and plan their living spaces. For example, their online room planners and in-store demonstrations facilitated informed decision-making and inspired consumers with creative interior design ideas. Attitudes and Beliefs: IKEA promoted sustainability through initiatives like using renewable materials and energy-efficient designs. This commitment resonated with environmentally conscious consumers, reinforcing positive attitudes towards the brand. Consumer behaviour in India: Influencing factors Cultural Integration: IKEA collaborated with local artisans and designers to create collections that celebrated Indian craftsmanship and heritage. Exclusive partnerships resulted in products featuring traditional textiles and patterns, appealing to consumers interested in supporting local artistry. Family-Centric Approach: Recognizing India's family-oriented culture, IKEA positioned their furniture as solutions that cater to family needs and preferences. They highlighted products that facilitate family gatherings and festivals, promoting the importance of functional and comfortable living spaces. Urban Lifestyle Solutions: Addressing urbanization trends, IKEA offered space-saving furniture designs such as foldable tables and modular storage units. These solutions were showcased in store displays that demonstrated their ability to transform small living areas into stylish and practical spaces. Customization and Personalization: IKEA allowed consumers to customize furniture designs to suit individual preferences. Options to choose fabrics, configurations, and accessories empowered consumers to create personalized living environments. For example, their "Design Your Own Sofa" tool provided flexibility in sofa design and upholstery selection. By aligning its strategies with the key aspects of consumer behaviour, IKEA successfully entered and established itself in the Indian market. The company's attention to cultural, economic, social, and technological influences, along with its understanding of psychological factors and the decision-making process, enabled it to meet the unique needs of Indian consumers effectively. 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Online programmes to help you boost your skillset through Podar Skills, WorkEx Bootcamp, Eduspace Internships or EduREPORTS. We are here to help you find your edge. Podar Eduspace Our Programs Take the next step towards your success by upskilling yourself with our selection of Podar Eduspace courses and offerings Podar Skills Powered by Harvard Business Publishing. 13 certificates to boost hard, soft and digital skills. Flexible skills-based learning to prepare you for the 21st century, all-in-one holistic development and profile building. Learn more WorkEx Bootcamp Improve your competitiveness with our WorkEx Bootcamp, a solution to bridge the gap between traditional college education and real-world employable skills. Learn more EduSpace Internships Work with experts from a field of your choice. Digital marketing, finance, AI, science, psychology and more. Conduct in-depth research based on a curated topic and published on EduREPORTS. Read More EduREPORTS EduREPORTS is a programme where we publish the research reports created by the graduating cohorts of the WorkEx Bootcamp and independent research submitted from our community on diverse topics such as technology, social welfare, and more. Read More

< Back EduTech - The New Age Education by Anoushka Sen EduTech is a developing industry in education, that has been propelled by the COVID-19 pandemic. Learn about the key players, untapped areas, impact, and future prospects of the industry. AREAS UNDER EDUTECH (DEFINITION OF EDUTECH) Educational technology is the combined use of computer hardware, software and educational theory and practice to facilitate learning in classrooms. When referred to with its abbreviation, EdTech, it is often referring to the industry of companies that create educational technology. EdTech is still in the early stages of its development, but it shows promise as a method of customizing a curriculum for a student’s ability level by introducing and reinforcing new content at a pace the student can handle. The goal of EdTech is to improve student outcomes, enhance individualized education, and reduce the teaching burden on instructors. While many praise technology in the classroom, others fear that it is impersonal and can lead to data collection and tracking of both students and instructors. Some areas under edutech include online learning platforms, virtual reality, mobile technology, youtube. In-classroom tablets, interactive projection screens and whiteboards, online content delivery, and MOOCs (Massive Open Online Courses) are all examples of EdTech. Learning methodology today typically covers a structured curriculum, interactive classes, labs, project work, and finally assessments. There are many users of edutech in the field of education like primary school, secondary school, higher education. Areas under edutech MOOCs IMPACT OF COVID-19 ON EDUTECH - NEED, ACCEPTABILITY EdTech has been around for nearly the last 15 plus years in a meaningful way. Technology has scaled to a level where everything happens seamlessly online and delivers a great learning experience and great outcomes. This era of EdTech is about the use of technology to highly personalize the learning experience, try new approaches, and to scale education in unimaginable ways. Present-day classrooms have moved beyond the clunky computers that were once the norm and are now tech-infused with tablets, interactive digital courses, and even robots that can take notes and record lectures for students who are not well and it looks like technology in the classroom is here to stay — the majority of teachers believe tech is going to have a major impact on the way they educate in the near future. The immense rise in EdTech users due to the nationwide lockdown has provided a significant push to the sector in India, which is relied upon to develop at a CAGR (Compound Annual Growth Rate) of 52% to having been turned into a 1.96 billion dollar industry by 2021. The key development drivers propelling EdTech in India are the capacity to serve a large audience at essentially lower costs compared to traditional classroom learning, critical growth in internet, Smartphone infiltration across India and steady growth in disposable income of the Indian families. The countrywide lockdown due to the pandemic led to the shutting down of schools and universities which saw the emergence of many EdTech platforms and services and a rise in adoption. The EdTech sector saw major investments and spending by governments, schools, universities, students, and professionals globally. While the growth has been tremendous, the industry suffers from challenges such as scaling up rationally, defeating infrastructure barriers, and retaining growth. Lockdown boosted innovation and investment in the EdTech Sector. There are around 4,450 EdTech start-ups operating in the nation presently catering various segments including K-12 (Kindergarten to 12th grade), vocational, and professional training/skilling and school/college educational operations. While the K-12 and competitive examination segment is ruled by Indian players, the international players are centered on reskilling, vocational preparation, and certifications. A lot of innovations have been tested within the Indian EdTech industry to balance the dynamics of teachers and students from a traditional classroom to a virtual one. Technology is turning teacher-driven education into a more teacher-student arrangement. Smart classrooms are making teaching transparent and equivalent for every student in a way close to the genuine classroom-like experience. Impact of Covid-19 on Edutech Need - The COVID-19 pandemic has changed education forever. The COVID-19 has resulted in schools shut all across the world. Globally, over 1.2 billion children are out of the classroom. As a result, education has changed dramatically, with the distinctive rise of e-learning, whereby teaching is undertaken remotely and on digital platforms. While countries are at different points in their COVID-19 infection rates, worldwide there are currently more than 1.2 billion children in 186 countries affected by school closures due to the pandemic. In Denmark, children up to the age of 11 are returning to nurseries and schools after initially closing on 12 March, but in South Korea students are responding to roll calls from their teachers online. Even before COVID-19, there was already high growth and adoption in education technology, with global EdTech investments reaching US$18.66 billion in 2019 and the overall market for online education projected to reach $350 Billion by 2025. Whether it is language apps, virtual tutoring, video conferencing tools, or online learning software, there has been a significant surge in usage since COVID-19. Acceptability - Covid-19 pandemic enabled EdTech to become leading sector for growth. With the emergence of EdTech, teachers and parents are adopting a more practical way of imparting knowledge. The EdTech industry went the extra mile to help students amid the ongoing Covid-19 pandemic. The increased adoption by institutions, professionals, parents, and students marks the growth. It has always existed, but its popularity and growth are in the news. India's shift to digital teaching in the past 10 months has been rapid. Since March 2020, the number of students learning online in India has increased dramatically. Schools, universities and educational institutions have moved online due to the lockdown and worry about Covid-19. In the past ten months, the user base of several EdTech platforms has doubled in both paid and free daily visitors. Adoption of EdTech tools and products by students, teachers, and institutes - While current classroom doors are closed in schools of all levels, the educational process has shifted online. Teachers whose lesson plans were designed for the analogue form had to adapt to this new digital environment in order to be effective and keep students learning. EdTech saw the major adoption of online self-based curriculums and online class management. Before Covid-19, educational technology had already seen tremendous development and acceptance with a variety of adoptions in educational institutions and at home, such as using visual aids, undertaking research, and creating online portals. Improved digital literacy, increased student engagement, automated grading, staying in touch 24X7, publishing and displaying student work, and personalising learning are just a few of the benefits. EdTech tools and platforms are thus giving educational institutions a tremendous opportunity to respond to the challenge and achieve a seamless transition from offline to online education. KEY PLAYERS IN INDIA India to become the Edtech Capital of the World EdTech funding focused on start-ups - Indian EdTech start-ups raised more than US$ 1.43 billion across 100 deals in 2020. The COVID-19 pandemic disruptions and subsequent lockdowns compelled both parents and educational institutions to implement tech-enabled learning solutions, making EdTech the most funded sector in the country. Of the total funding raised, Byju’s leads with 57%, followed by Unacademy (10.5%) and Vedantu (9.5%). Since 2020, India has seen four EdTech start-ups turn into unicorns (Unacademy, UpGrad, Eruditus and Vedantu) and one into a decacorn (Byju’s). A unicorn is a company valued over US$ 1 billion and decacorn is valued >US$ 10 billion. A hybrid EdTech industry - According to experts, players in the EdTech segment are expected to adopt a hybrid channel approach in the future. Online players are trying to establish offline touchpoints for students. For instance, EdTech decacorn Byju’s has piloted Byju’s Learning Centre, a new hybrid model, allowing students to visit offline education centres for classes. BYJU's is an Indian multinational educational technology company, headquartered in Bangalore. It was founded in 2011 by Byju Raveendran and Divya Gokulnath. as of December 2021, BYJU'S is valued at US$21 billion and has over 115 million registered students. Byju’s acquired three major companies - Epic , an online library for kids aged under 12, for US$ 500 million; Singapore-based Great Learning , an online professional and higher education company, for US$ 600 million and Toppr , an after-school learning platform, for US$ 150 million. Unacademy aims to build the world's largest online knowledge repository for multi-lingual education. They use technology to empower great educators and create a community of self-learners. Their vision is to partner with the brightest minds and democratise education for everyone looking to learn. They want to change the future of education. Vedantu is an Indian online tutoring platform launched in 2011 based in Bengaluru. UpGrad is an online higher education company. It offers over 100 courses in collaboration with global universities. It raised US$ 120 million from Temasek. The Eruditus group, consisting of Eruditus Executive Education and its online division Emeritus, partners with top-tier universities across the United States, Europe, Latin America, India and China to bring world-class business and professional education to a global audience. Eruditus has partnered with more than 50 universities to date, including MIT, Columbia, Harvard, Cambridge, INSEAD, Wharton, UC Berkeley, INCAE, IIT, IIM, NUS and HKUST, educating more than 250,000 individuals across 80 countries. Many courses are offered and facilitated in multiple languages, including Spanish, Portuguese and Mandarin. The Eruditus Group has more than 1,400 employees globally and offices in Mumbai, New Delhi, Shanghai, Singapore, Palo Alto, Mexico City, New York, Boston, London, and Dubai. Eruditus is a global leader in the $280 billion global professional education market. Teachmint , a start-up that helps teachers and institutions create their own virtual classrooms, raised US$ 78 million in a Series B funding. The new round of funding values the company at US$ 500 million. EdTech start-up Classplus raised US$ 65 million in a Series C round led by Tiger Global Management. Doubtnut , a K–12 EdTech platform, has raised approximately US$ 30 million from SIG Global and Lupa Systems. Existing investors Sequoia Capital India, Omidyar Network India and Waterbridge Ventures also participated in the Series B round. Key Players in India TARGET AREAS, STILL UNTAPPED AREAS Target areas Previously dominated by the K-12 segment, the EdTech sector is now witnessing strong growth in the post-K-12 segment. Online education offerings for the K-12 segment (Classes 1 to 12) are projected to increase 6.3X by 2022, creating a $1.7 billion market and the post-K12 market is set to grow 3.7X to touch $1.8 billion. When compared to traditional education (school, college), online education is more affordable. There are numerous e-learning platforms available for the students where they can get access to quality education at the most affordable cost. Due to the affordability factor, students belonging to different income categories and social class can get access to quality education with attractive visuals and expert teachers. There are around 624 million active internet users in India as of February 2021. These active users offer a huge growth opportunity for the EdTech stakeholders. Particularly in Tier 3/4 cities, segments such as online tutoring and competitive exam preparation can have strong growth. With more people in the target audience pool, every segment of the EdTech industry can have ample growth opportunities. Still untapped areas EdTech has untapped potential. The education market in India is massive yet highly under-penetrated, with online learning forming only 2% of this, says Vamsi Krishna, Co-Founder & CEO, Vedantu. Online education start-ups have benefited immensely from the shutdown of schools and colleges, as they tried to fill the gap with online classes. Investors, too, have jumped on to the EdTech bandwagon, even as funds dried up for startups in other sectors. EdTech startup Vedantu raised $100 million in July at a valuation of $600 million, making it the second-most valuable online education startup in India after Byju’s. Virtual is becoming the new normal in learning and is the key to driving growth during the coronavirus pandemic, said Vamsi Krishna, co-founder and chief executive officer, Vedantu. Virtual is becoming the new normal in learning. Therefore, their strategy to encourage learners to experience live, online learning will continue. They believe this will be key in driving category and business growth during the pandemic and beyond. Vedantu is exploring opportunities to scale impact, as it achieves 4x growth, and looks forward to adding 30-40% employees this year. Online learning has seen exponential adoption among students during this pandemic, and schools, as well as institutes, have switched to an online mode to ensure that India’s learning never stops. This continues to benefit students. But switching from offline to online platforms has been a challenge for many teachers, as they were not used to conducting classes in the virtual world. They expect to see more momentum with new users experiencing the benefits of online learning. India has been at the forefront of making the shift towards online learning. While the education market is huge, online penetration is still at a nascent stage. Therefore, investors are increasingly exploring opportunities in this market because of the untapped potential. To invest in this market, they are looking for partnerships that have long-term growth opportunity, the potential to scale and a successful business model. Despite coming up with superior technology solutions for online learning, EdTech startups still are not quite reaching the full potential because of the digital divide, as quality and equality issues are prevalent in India. There is also a misplaced notion about the use of gadgets. Time spent on gadgets and overuse is linked to many unpleasant outcomes. Online learning, when done in moderation and with guidance, can help unlock the potential of each child. A majority of India’s student population still does not have access to a quality teacher or good learning content. The pandemic has only made the situation more stark and online learning has emerged as the only practical solution. ADVANTAGES / DISADVANTAGES Advantages Today’s students are very different from what they used to be. Digital technology has changed the way learners consume information and approach education. The world around us is changing at a rapid pace, and schools, colleges, and educational institutions are all struggling to catch up. Thus, the need for educational reform is higher than it ever was. What can the education system do? First and foremost, it needs to remodel its classrooms to fit those new needs. It needs to embrace technology more broadly to create new learning experiences that can appeal to digital students. This implies a lot of things: the use of new technologies, the training of teachers, the modification of class organization, and, more importantly, a redefinition of what it means to educate people in the 21st century. It’s not an easy task for sure, but it needs to be done in the short term. Doing so can dramatically improve the quality of the education system as a whole, benefiting students, teachers, and society. Some educational organizations are already showing us the way. They are collaborating with education software development companies to digitize the classrooms and bring technology into all kinds of learning experiences. Advantages Tech Provides More Immersive Learning - The digital world is filled with resources that can enrich any class, engaging students at a deeper level and provide interactive experiences that can shed new light on their understanding of a lot of subjects. Imagine, for example, a geography teacher using Google Maps on a digital board to take students on a virtual tour of the Andes or a physics teacher using a 3D simulator to show the effects of different forces at play in a particular movement. There is a lot of software available for a multitude of subjects, from math and chemistry platforms to biology applications. But that is not all there is to it. Immersive learning can also mean virtual reality and augmented reality to offer more sophisticated classes to students. Imagine being able to “walk” through the corridors of the Colosseum or learning to play the piano through a projection on a desk! That’s precisely what technology can give digital learners. It Customizes Learning for Each Student - One of the most significant drawbacks of traditional education is that a single teacher or professor has to prepare classes for different students. That means that classes do not take into account the different kinds of learners inside the classroom, which ends with certain students lagging. Fortunately, technology can help with the diversity of learning styles. How so? By letting teachers follow student progress individually and in real-time. Some platforms can gather information from each student as they work on their assignments and suggest areas of improvement to teachers. Thus, digital learners can move at their own pace, following the recommended path, while teachers can focus on students that are struggling with a particular task. Technology Provides Easy Access to More Learning Resources - Today’s students have grown accustomed to searching for information online whenever they have to solve a problem or learn how to do something. By doing so, they are now used to interacting with search engines, ebooks, educational and how-to videos and online platforms and forums. All of that needs to be present in any classroom to leverage the students’ familiarity with them. Naturally, educators can go beyond that. They can use online tools to allow remote access to students, use streaming to provide tutoring classes, and even use gamification elements in a custom educational software to provide centralized resources more efficiently and in a more engaging manner. Tech Adds Fun to Learning – Students are used to technology being a central part of their everyday lives, so its absence immediately puts them off. Just the inclusion of technology can boost their interest in classes. Yet, technology can do far more than just being there – it can bring fun into the classroom. The gamification elements mentioned are just one of the ways educators can use to generate further engagement with their students. Games themselves are also great to teach about specific concepts in key subjects such as math, chemistry, biology and physics. Of course, there is more than just games – interactive videos and educational robots are other alternatives that can bring the same amount of educational value and excitement. It Increases the Collaboration - Today, technologies help connect the world in a myriad of ways, from connecting people from halfway across the world in a video call to allowing different individuals to work on the same online project simultaneously. Those collaboration capabilities can have a significant impact on the classroom as well. We already mentioned online tutoring classes and remote lessons as ways in which technology can democratize student participation. Group projects and assignments can be done more easily with the tools available today, from text processors and spreadsheets to scientific calculators and online presentation makers. The technology itself can be a goal that fosters collaboration. For instance, a professor could encourage their students to build a website about a particular topic, which won’t just teach them about the subject but also teach them about building a website as a team. Technology Better Prepares Students for Today's Jobs - Traditional education might be excellent at providing fundamental concepts about essential subjects, but it’s getting further away from the workforce’s reality. Today, most jobs call for tech knowledge of varying degrees. At the very least, all jobs require a certain digital alphabetization that most students today have to learn for themselves. Educational institutions can help with that through technology. By encouraging the use of digital tools such as calendars, websites, video calling apps, electronic whiteboards, emails, mobile apps, and more, educators can help students learn how to work with all those tools. Naturally, all of those tools would be boosted by the inclusion of tech-related subjects in the education programs, starting from an early age. Thus, the education system would place technology where it belongs today – at the center stage. Technology Teaches About Digital Life - Technology doesn’t just help prepare students for work but also helps them understand everything that surrounds the tech life itself. Nowadays, many of our lives rely on digital technologies, from entertaining ourselves and communicating with others to paying bills. Besides, social media is a force to be reckoned with, so understanding what it means to participate in that digital life is something students should learn from an early age. In other words, if children start using technology in the safe space of the classroom, they can learn a lot about digital tech responsibility. That’s the perfect environment for students to learn about digital identities, digital citizenship, and online etiquette and what it all means in the broader context. Disadvantages Students: No immediate feedback from instructors - Communication with instructors will inevitably include some wait time. Questions will not be answered immediately due to Professors not having set “office hours” and not being in the classroom at the same time. Lack of face-to-face interaction and connection with the instructor - There is a lack of accountability, because students are truly just "names" to their instructors. Creating personal relationships with instructors is nearly impossible, which is one of the largest factors in successful learning for many students. May require more time - For students that are not as skilled with technology, it could require more time to do this work on their own, to navigate the web etc. Requires technological awareness - Students must be adept at a variety of technologies in order to successfully receive and turn in assignments, communicate with other students etc. Requires students to have access to technology, which is not always possible for lower-income students - Students must obtain a personal computer with a range of programs on it, most likely should have wireless internet in the home etc. This is not always possible for students with fewer financial resources. Lack of motivation for learners who are not intrinsically motivated - Many students benefit from teachers or other peers learning alongside them. It can be difficult for students to desire to learn and work hard when they do not know anyone else doing it. Teachers: The amount of work required to translate the whole classroom structure to a web-based format - It can take a lot of work for teachers to re-format a class so that it fits the web. Teachers must be very adept with technology in order to do this in a timely fashion. Misunderstandings of assignments or instruction - There can be confusion between students/instructors because students only have access to the written explanation of an assignment. Students are not able to ask for clarification, or hear other students' questions. Difficulty motivating students when there is no face-to-face interaction - A large part of teaching is having a rapport with students. When this is taken away, teachers may have a difficult time motivating students from a distance. Lack of feedback from students to help with gauging response - Instructors are unable to get an accurate "feel" for how they are doing and how students are receiving instruction. This is often gained by reading students' facial expressions or reactions, and this cannot be done without face-to-face interaction. IMPACT ON PHYSICAL TEACHING METHODS The Covid-19 pandemic has changed the way teachers prefer working and many are now moving from teaching at schools to the virtual world of edtech startups. After almost two years, students are heading back to school with much enthusiasm for offline classes, but a change has been witnessed in the teachers’ choices as well. Some of the teachers are choosing to continue with virtual classes with new edtech startups, leaving behind the traditional chalk-and-talk teaching methods. During the pandemic, almost every teacher had to learn the new virtual teaching methods by sitting in front of their mobile or laptop screens. Now, they become habitual to these methods as it not only provides them with the potential of greater remuneration but also helps them gain digital skills. The new edtech approach Edtech businesses are positively transforming the education industry. Edtech firms have come a long way, especially during the pandemic, by bringing teaching and learning to an entirely digitised form. Many edtech companies have noticed the shift in how teachers want to teach now and have incorporated tools to help them make the move from physical to digital more easily, such as enabling simplified sharing of videos, puzzles, assessments, and reports. With the help of advancements in artificial intelligence, instructors now have access to a variety of tools powered by machine learning algorithms that make their jobs easier. Special activities, such as verifying responses for assignments, allow them to devote more time to other parts of teaching. The mission of the startup mattered the most to these educators. What came in second was having the organisation’s support with content, training, and access to a community of fellow educators. Edtech provides full-time stability and recognition Teachers who were not able to get adequate job security even after working almost half of their lives in schools can get an opportunity to work as full-time members of edtech startups and be better recognised for their effort. Aanand Srinivas, the founder of the edtech startup StayQrious, which was working with around 50-60 teachers before, saw a definite hike in applications from teachers with a background in traditional teachers during the pandemic. The number of teachers have now increased by around five times as it was earlier. Attractive pay scale After a long interaction with teachers, we got to know that teachers are getting pretty good salaries as compared to what they were earning after spending 75% of their daily time in a private school. “When I was working in a Delhi-based private school, I used to earn around Rs 25,000 to Rs 30,000 in a month. Now, I am earning Rs 60,000 in a month with better compensation and facilities than is provided in schools,” says Mansi Garg, a learning coach at StayQrious. The pandemic has not only changed the learning approach of students but has also changed the mindset of teachers concerning the new facilities they could get and the skills they could develop while working for edtech startups. Edtech startups are now attracting creative talents from all over the country. “With more awareness spreading, we are hoping many of the best minds decide to enter the field of education as the scale of the problem is large and we'll need to have teachers with the right mindset to solve it,” says StayQrious Founder Aanand Srinivas. EDUTECH IMPACT ON EDUCATION AS A WHOLE In this generation, technology plays a major role in everyday lives. We now live in an era where people are consumed by technology devices, which is shaping how we communicate. As these technologies evolved, the nature of teaching and learning has become much more collaborative. With these advanced technologies we are stepping into a whole new world of innovation and creativity. Active engagement - Technology is interactive, this helps students to become passionate about what they are learning. By using the internet, students can get updates on real time issues and solutions. Allowing children to participate in an active way reduces behavioral issues in class, it gives more dedicated time for teachers to focus on the subject. Discussion and working group - By using software tools, students can create online groups and virtual communities that connect them with students and teachers anywhere around the world. Online communities provide a great opportunity for students to discuss their ideas and receive feedback in real time allowing for a more efficient work environment. Coaching and Assessment - As technology continues to evolve, teachers must adapt. Incorporating technology into a classroom setting allows for an enhanced relationship between student and teacher. Teachers can now share lesson plans, lectures, and presentations with ease while students can upload their assignments from their devices. Teachers have become facilitators, providing constant feedback, enabling students to achieve deeper levels of understanding. They ensure that students are not just learning the concept, but also how to apply the knowledge, it develops critical-thinking and problem solving skills. Simulation Software - Simulation software brings to life, the wonders of our world that would be impossible to see without technology. By using specific simulation tools, students can see planetary movements, how a tornado develops, or how the dinosaurs lived. The ultimate aim of EdTech implementation should be to enhance the quality of education and improve engagement levels among students. It is important to balance the visual content with reading, as well as the interactive elements and games with independent thinking and writing, so that students won’t be completely absorbed by all that the internet has to offer. In the interactive age, teachers have more abilities to turn classes into exciting places for discovery and learning adventures. Many in the ed-tech field see new technologies as powerful tools to help schools meet the needs of evermore-diverse student populations. The idea is that digital devices, software, and learning platforms offer a once-unimaginable array of options for tailoring education to each individual student’s academic strengths and weaknesses, interests and motivations, personal preferences, and optimal pace of learning. Increasing Accessibility and Flexibility - Technology has changed education. Information is more accessible now than ever before. We now have fully-fledged universities that thrive by offering all their courses online, it is now easy for anyone to access a desired educational course online. Technology has brought people together by breaking the geographical barriers that limited access to education in the past. Students can learn at their own pace, depending on their ability and the amount of time. Learning materials are delivered to students online, students can schedule their learning timetables as they wish. Special Needs in Education - For years, special needs has been an important issue in education. Traditional classroom environments may fail to address the individual needs of some students. Digital learning provides a highly flexible, interactive and accessible nature for individuals to learn in ways that suit their personal needs, capabilities or even challenges. More so, teachers can now use various technology applications to help students with particular needs learn better. Making Learning Fun Again - Technology has changed education in the ways which learning content is now delivered. Teachers can now use videos, animations, and e-books to enhance the process of learning. It’s common for students and teachers to use games as a way of making the process more interactive. As a result, learning and teaching are now more effective and meaningful than ever. Interaction between teachers and students - Nowadays, the absolute dependence on physical meetings is gone. It is easy for teachers and students to stay in touch via email and other internet-based services such as file-sharing and messaging. Online Tests and Assessments - It is now possible for institutions to test their students online. Students can now use e-assessments to accurately evaluate their performance as well as their professors. Similarly, education institutions can efficiently assess their students using online assessments, saving time and resources. Differentiated Instruction - The technology in education also provides a means to focus on active student participation and also to present different strategies of questioning. It also promotes plans of personalized learning and broadens individualized instructions. The use of internet in education has made a great impact on the educators and students in the whole education system. Internet itself has unlocked a world of opportunities for students. Improved Student Writing - It is also suitable for students to change their written work on word processor which also helps in improving the quality of their writing. According to various studies, students are better at editing and critiquing written work when it is done on a computer. Technology has changed education in many ways. From making education more accessible and meaningful, to enhancing the manner in which teachers and students interact during the process of learning. Technology has had many profound and positive effects on education as a whole. FUTURE PROSPECTS 2021 marked a paradigm shift towards EdTech and the trend will strengthen in 2022. More students will realize that traditional offline players haven't built the capability to provide the support needed in these hyper-competitive times. By 2026 the online education industry is set to grow by 11.6 billion. As per the recent population census survey, nearly 580 million Indians are between 5-24 years of age, with about 250 million of them currently enrolled in schools. This means that about 36 per cent of India’s population is young and learning. That’s a huge market for the education sector to leverage and grow. Like any other sector, the education sector has also seen an online transformation post COVID. However, by 2026 the online education industry is set to grow by 11.6 billion. This proves that the EdTech revolution is not a temporary adjustment but a permanent solution. Online education to ensure continued learning The Government of India has always taken progressive steps when it came to education. In 2002, Foreign Direct Investment through the automatic route was 100 per cent permitted. Due to which the transfer of knowledge, skills, technology, and expertise has become a global phenomenon. Online education has only contributed to accelerating the globalisation of education. A case in point would be the emergence of online programs in renowned and Ivy League global universities like Deakin University, Liverpool John Moores School, Duke University and the University of Arizona. A student from any part of the world can earn and learn at the same time, hence reducing the burden of clearing piled up loans later on. Likewise, Amazon has launched its ambitious computer education programme in India where it would identify and train 1 lakh students for future employability in its organisation. Many mid-level employees will get better projects and salaries as they upskill through online programs offered by EdTech startups. Similarly, the Indian Institutes of Management (IIMs) have partnered with online service providers to provide online and blended courses in digital marketing, product management, finance and operations for working professionals. Better qualified and well-paid teachers A report by KPMG (Klynveld Peat Marwick Goerdeler) shows that India has the second-largest market for online education, right after the US. This means that the nation is going in the right direction as per the recent Nation Education Policy (NEP) passed in 2020. With proper planning and execution, the online medium has the power to meet all the four policy parameters of NEP — Access, Equity, Quality, Affordability, and Accountability. Right now, the challenge faced by Indian Education is not the lack of consumers (students) but the lack of qualified and willing suppliers (educators.) One of the major reasons for this is the low pay for an educator in a traditional school or college setup. Those who are highly qualified in their field prefer to take up corporate assignments with lucrative pay rather than settle for less. However, online educators in EdTech organisations have reported earning 2x more than their offline counterparts. This is because there is no limit placed on the number of enrolments per batch. At the same time, the students get the required 1-on-1 attention in the comfort of their room, which they otherwise won’t get in a crowded classroom setup. Satisfied educators will end up teaching the subject with passion and make the learning process interesting and innovative for students. Blended online mentorship programmes Students don’t have to spend money on transport, lodging, food and expenses if they decide to take the online route for exams like IIT-JEE, NEET-UG, GATE or UPSC-CSE. Nor do they have to mull over shifting base. Due to the availability of recorded lectures, students can enjoy a certain level of flexibility in their schedules, which is otherwise absent in the offline mode. Those who are preparing for competitive exams can do so at their own pace and gain access to their test performances vis-a-vis other students through quantitative data analysis. Online mentorship programs will be a popular demand in offline institutes due to the prospect of the one-on-one learning experience. High brand awareness that traditional players banked on will no longer serve as a strong competitive advantage. Hence, if not at the high school level, from the graduation level onwards, and in the competitive exams space, the outlook for online education in 2022 looks quite strong. Future Prospects BIBLIOGRAPHY 1. https://www.futurelearn.com/info/blog/latest-EdTech-developments 2. https://www.investopedia.com/terms/e/EdTech.asp 3. https://www.indiainfoline.com/article/general-editors-choice/impact-of-covid19-on-EdTech-and-learning-platforms-in-india-120092200276_1.html#:~:text=Impact%20of%20COVID%2D19%20on,billion%20dollar%20industry%20by%202021 4. https://www.weforum.org/agenda/2020/04/coronavirus-education-global-covid19-online-digital-learning/ 5. https://www.indiatoday.in/education-today/featurephilia/story/year-ender-2021-how-covid-19-pandemic-enabled-EdTech-to-become-leading-sector-for-growth-1891605-2021-12-24 6. https://www.ibef.org/blogs/india-to-become-the-EdTech-capital-of-the-world 7. https://thestartuplab.in/future-of-EdTech-india-factors-driving-the-growth-of-EdTech-industry-in-india/ 8. https://www.livemint.com/ 9. https://www.bairesdev.com/industries/EdTech-classroom-benefits/ 10. https://wiki.uiowa.edu/display/EdTech/Disadvantages 11. https://www.indiatoday.in/education-today/featurephilia/story/teachers-are-making-a-career-switch-from-schools-to-edtech-startups-after-the-pandemic-1882493-2021-11-30 12. https://devicecycles.com/wp-content/uploads/2019/05/Device-Cycles-SB_How-EdTech-makes-an-impact-in-education-_03-19-2019-002.pdf 13. https://indianexpress.com/article/education/education-outlook-2022-future-of-EdTech-sector-digital-learning-in-2022-and-beyond-7699508/ 14. https://in.linkedin.com/company/unacademy 15. https://eruditus.com/about-us/ Previous Next

< Back Banking and the Future of Indian Banking by Samaira Dayani The banking sector is poised to grow at a rapid pace by digitizing financial services dissemination, further formalizing credit to micro, small and medium enterprises (MSMEs), adopting innovative digital operating models, adapting to the continuously evolving landscape, benefiting from the adoption of emerging technologies, and driving consumption-fueled growth for our economy. BASICS OF INDIAN BANKING SYSTEM Introduction - Central Banks and Commercial Banks Commercial Banks Commercial and central banks are essential parts of the country’s economy. While commercial banks deal directly with the end users, central banks offer their products and services to the government and other commercial banks. A commercial bank is a type of financial institution that provides various banking services to individuals, businesses, and other organizations. These services include accepting deposits, making loans, and facilitating the transfer of funds. Commercial banks also offer a wide range of other financial services such as issuing credit and debit cards, providing online and mobile banking, and offering investment products. They accept deposits from customers and use these funds to make loans to businesses and individuals. They also earn a profit by charging interest on loans and paying lower interest on deposits. Some commercial banks offer safe deposit boxes or vaults for customers to store valuable items, such as documents, jewelry, and other valuables. Commercial banks ensure liquidity by taking the funds that their customers deposit in their accounts and lending them out to others. Commercial banks play a role in the creation of credit, which leads to an increase in production, employment, and consumer spending, thereby boosting the economy. Central Banks A central bank is a financial institution that is responsible for overseeing the monetary policy of a country. The meaning of central bank is a financial institution that has the privilege of producing and distributing money (and credit) for a country or a group of countries. It acts as a regulator and supervisor of the country's financial system, and is typically responsible for issuing and controlling the supply of currency, managing the country's foreign exchange reserves, and acting as a lender of last resort to commercial banks. The main functions of a central bank include maintaining price stability, ensuring the smooth functioning of financial markets, and promoting economic growth. The Reserve Bank of India (RBI) is the central bank of India.It is an apex body that controls, operates, regulates, and directs a country’s banking and monetary structure. Roles and Functions of the RBI The Reserve Bank of India was established on April 1, 1935. The RBI is completely owned by the government of India. The following are some of the vital functions of the RBI: ● Monetary Authority : It formulates, implements and monitors the monetary policy. The objective is to maintain price stability while keeping in mind the objective of growth. ● Issuer of currency : RBI is the authority who issues notes, destroys the old notes and decides which currency is fit for circulation among the people. It also puts coins minted by the Government of India into circulation. The objective is to give the public an adequate quantity of supplies of currency notes and coins in good quality. ● Custodian and Manager of Foreign Exchange Reserves : In order to stabilize the external value of Indian currency, the RBI maintains the reserves of foreign currencies to stabilize the exchange rate. The objective is to facilitate external trade and payment and promote orderly development and maintenance of the foreign exchange market in India. ● Lender of Last Resort : It also acts as a lender of last resort for the Scheduled Commercial Banks (SCBs). Usually, banks and other financial institutions borrow and lend among themselves to meet their financial needs. But, in times of crisis, the SCBs approach the RBI to get financial assistance. ● Banker to the Government : The RBI being the apex monitory body has to work as an agent of the central and state governments. It performs various banking functions such as accepting deposits, and taxes and making payments on behalf of the government. It works as a representative of the government even at the international level. Monetary Policy: Monetary policy is a set of tools used by a nation's central bank to control the overall money supply and promote economic growth, as well as to control inflation. The following are some of the tools used by the Reserve Bank of India to control the flow of money: ● CASH RESERVE RATIO/ CRR: The cash reserve Ratio is a particular minimum amount of the total deposits of customers that need to be maintained by the commercial bank as a reserve either in cash or as deposits with RBI. The CRR rate will be fixed as per the guidelines of the Central Bank. It ensures the liquidity system is consistent and maintained well in all commercial banks. RBI gets to control and coordinate the credit maintained by banks through the CRR rate which helps to have a smooth supply of cash and credit in the economy. When the CRR rate is reduced by RBI, commercial banks can offer more advances to borrowers which in turn increases the flow of cash to the public. Another objective of CRR is to keep inflation under control. During high inflation in the economy, RBI raises the CRR to reduce the amount of money left with banks to sanction loans. It squeezes the money flow in the economy, reducing investments and bringing down inflation. As of 2024, the CRR is at 4.5%. This rate has been stable since early 2023. The CRR was reduced to 3.0% in 2020 during the COVID-19 pandemic to increase liquidity in the banking system. Post-pandemic, the CRR was increased to 4.0% in 2021 and then to 4.5% in 2022 and 2023 as the economy began to recover and the RBI shifted its focus to managing inflation and ensuring economic stability. ● STATUTORY LIQUID RATIO (SLR): SLR requires commercial banks to keep a certain amount of their money invested in specific central and state government securities. It is the minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold or other securities. One of the main objectives is to prevent commercial banks from liquidating their liquid assets when the RBI raises the CRR. SLR also helps RBI control inflation. Raising SLR makes banks park more money in government securities and reduce the level of cash in the economy. This helps raise price levels and inflation in the economy. Doing the opposite helps maintain cash flow in the economy. Reducing SLR leaves more liquidity with banks, which in turn can fuel growth and demand in the economy. As of January 29, 2024, the current SLR in India is 18%. In recent years, the SLR has been gradually reduced to promote more lending and stimulate economic growth. For example, the RBI reduced the SLR from 19.5% to 18.0% over the past few years. From 2015 to 2019, the RBI steadily decreased the SLR from around 21.5% to 18.75%. ● REPO RATE: The Repo Rate is the interest rate at which the Reserve Bank of India (RBI) loans money to commercial banks. The repo rate is utilized by the Indian central bank to restrict the flow of money in the market. When the market is impacted by inflation, the RBI raises the repo rate. An increased repo rate means that banks borrowing money from the central bank during this period will have to pay more interest. This inhibits banks from borrowing money, reducing the amount of money in the market and helping to negate inflation. The repo rate is a critical tool used by central banks to manage the economy and maintain financial stability. When the economy slows down, central banks can lower the repo rate to make borrowing cheaper and encourage investment and spending. This can help to stimulate economic growth. ● REVERSE REPO RATE: The reverse repo rate is the rate at which the RBI borrows funds from the country's commercial banks. This aims to absorb the liquidity in the market, which helps restrict the borrowing power of the investors. When faced with high levels of inflation, the RBI increases the reverse repo rate, thus encouraging banks to park more funds with the RBI. Controlling inflation is a crucial goal of central banks. Central banks can use the reverse repo rate to influence the money supply and overall economic liquidity. Reducing liquidity through the reverse repo rate can help control inflation by limiting the money available for spending and borrowing. The current reverse repo rate is 3.35%. In December 2019, the reverse repo rate was 4.90%. It continued to decrease in 2020 and reached 3.35% in December of the same year. Ever since, the rate has remained the same. Digital Banking Online banking means accessing banking features and services via your bank’s website from your computer. You may log into your account to check your balance or pay your electricity bill. You can access additional banking features, such as applying for a loan or credit card, at many banks via your online banking portal. Digital banking means to digitize all the banking operations and substitute the bank's physical presence with an everlasting online presence, eliminating a consumer's need to visit a branch Online banking in the U.S. has its roots back in the 1990s. In October 1994, Stanford Federal Credit Union was the first institution to let its customers access banking functions via the new World Wide Web. By the time the 21st century rolled around, it’s estimated that 80% of U.S. banks offered their customers the ability to bank online. The following are the different types of digital banking: ● UPI Transactions (Unified Payments Interface)- This allows money transfer from your bank account using a single window directly to the vendor from your mobile. Several bank accounts can be linked with one app. It enables individuals to transfer money instantly between bank accounts using their smartphones. UPI eliminates the need for traditional methods like cheques or net banking processes. UPI allows for the user to transfer the funds instantly between the bank accounts linked to the UPI platform. Some of the apps allowing UPI services in India are GooglePay, BHIM app, PhonePe, FreeCharge, Cred, etc. ● Mobile Banking- Mobile banking means using an app to access many of those same banking features via mobile devices such as smartphones or tablets. These apps are proprietary, issued by the bank where you hold your account, and usually use the same login information as your online banking portal. Mobile banking enables clients and users to carry out various transactions, which may vary depending on the institution. Mobile banking is very convenient in today’s digital age with many banks offering impressive apps. The ability to deposit a check, to pay for merchandise, to transfer money to a friend or to find an ATM instantly are reasons why people choose to use mobile banking. However, establishing a secure connection before logging into a mobile banking app is important or else a client might risk personal information being compromised. Using a mobile banking application, you can easily access your banking account, check balance, transfer funds, pay bills, deposit checks, etc. Overall, you can access almost all products and services provided by your banking institution. Plus it’s convenient to use, allowing you to check your banking account 24/7, conduct financial transactions or tasks whenever you are connected to the internet. ● ATM (Automated Teller Machine)- An automated teller machine or ATM cash dispenser can be defined as an electronic banking outlet that enables customers to complete routine transactions without the assistance of a branch representative. These days any person who owns a credit or a debit card can access cash at several ATMs in a hassle-free manner. ATM machines are a convenient and secure node, allowing many consumers to undertake quick self-service transactions. Modern ATMs provide a strong and substantial payment infrastructure in smaller towns, especially in emerging markets, contributing significantly to financial inclusion. Using an ATM simply involves inserting your bank-issued ATM card, entering your personal identification number (PIN) and following the prompts on the screen to complete your desired transaction. Firstly, they provide convenient 24/7 access to our bank accounts, allowing us to withdraw cash or perform transactions at any time. This eliminates the need to visit a physical bank branch during its working hours. Additionally, ATMs are often located in various locations, making them easy to access in emergencies or when we are travelling. Furthermore, ATMs have simplified banking procedures, reducing the dependence on human tellers. They allow us to perform routine transactions quickly and efficiently, saving us time and effort. ● Summary of Digital Banking According to Statista, the digital banking sector will grow continuously over the next five years. This trend reflects the ongoing development and expansion of digital banking services in the foreseeable future. The following are some of the merits of digital banking: ● Convenience Digital banking enables consumers to perform banking functions from the comfort of their homes, be it an older individual who is worn out on waiting in lines or a working-class professional who is caught up with work, or a regular individual who would not like to visit the bank's branch to run a single task. It also offers convenience. ● Easily Accessible Digital banking allows a user to carry out banking work around the clock, with 24*7 availability of access to banking functions. ● Paperless Transactions Probably the biggest drawback of traditional banking was the excessively placed importance on paper. Banking has become paperless with the advancement of digital banking as a service. A user can sign into their account at any point on schedule to monitor records. ● Automatic Payments Digital banking allows a user to set up automatic payments for regular service bills like power, gas, telephone, and credit cards. The customer no longer has to make a conscious effort to remember the due dates. The customer can choose alerts on upcoming payments and outstanding dues. The graph below shows the comparison between the channels used for investment transactions. The following are some of the demerits of digital banking: ● Downtime If you rely solely on an online bank, you could be challenged to access your accounts should your bank experience an online or mobile app outage and there’s no branch for you to visit instead. ● Security There’s always the chance that your username and password could be hacked; however, online banks pursue the same degree of risk-reducing security protections, such as multi-factor authentication, as brick-and-mortar banks do. However, neither system is completely safe, and hacked accounts can result in identity theft due to stolen login credentials. ● Tech Related Service Disruption If your internet service is delayed or unavailable for a while, it will limit your ability to access accounts online. Similarly, you won't be able to access your banking information over the Internet or a mobile device if the bank's servers crash or become momentarily inaccessible as a result of planned site maintenance. ● Limited Services You might be able to submit an initial application for a new account, a loan, or a mortgage online, but you will often need to go to a branch to sign documents and provide identification. Similarly to this, even if you may transfer funds to a checking account or debit card to make purchases, you'll need to go to a branch office or an ATM close by if you need cash. Conclusion – Indian Banking System and Economy at a Large : Future The banking sector is poised to grow at a rapid pace by digitizing financial services dissemination, further formalizing credit to micro, small and medium enterprises (MSMEs), adopting innovative digital operating models, adapting to the continuously evolving landscape, benefiting from the adoption of emerging technologies, and driving consumption-fueled growth for our economy. The imminent growth of 5G internet usage, deeper smartphone penetration, expansion of digital payments, frictionless data-led digital lending, risk-mitigated secure data protection, and accelerating Enhanced Access and Service Excellence (EASE) reforms, climate-conscious sustainable goals and collaboration between banks and FinTechs will enable the next wave of technology-fueled innovation in banking services in India. The future state of the Indian Banking lies in the modernisation of the core banking system. Introduction of new, better and agile technologies is carving out new paths of growth and optimization. The increased competition, unprecedented situation and the new normal arising out of the pandemic, will prompt the banking system to stay relevant and banking as we know might undergo a revolutionary change with a paradigm shift. Banking will be more lifestyle oriented and banks will look to extend their core systems to kick-start growth by launching new products, build digital experiences, and augment operational efficiency by leveraging the likes of AI, machine learning and cloud technologies. These would include themes like digital on boarding and quick loan disbursals. References Central and commercial banks: https://www.shiksha.com/online-courses/articles/difference-between-central-bank-and-commercial-bank/ https://testbook.com/key-differences/difference-between-central-bank-and-commercial-banks-in-india#:~:text=The%20main%20difference%20between%20the,customers%20and%20making%20a%20profit . https://www.investopedia.com/terms/c/commercialbank.asp https://www.vedantu.com/commerce/functions-of-central-bank Roles of rbi: https://www.rbi.org.in/commonperson/English/Scripts/Organisation.aspx https://www.nextias.com/blog/reserve-bank-of-india-rbi/ http://www.jnpg.org.in/WebDoc/EContent/Company_Account/Functions%20of%20RBI.pdf Monetary policy tools: https://cleartax.in/s/cash-reserve-ratio-crr https://byjus.com/free-ias-prep/cash-reserve-ratio/#:~:text=CRR%20rate%20is%20the%20minimum,time%20liabilities%20of%20each%20bank https://www.ceicdata.com/en/indicator/india/reserve-requirement-ratio https://www.ceicdata.com/en/india/bank-interest-rate/cash-reserve-ratio https://byjus.com/free-ias-prep/slr/ Digital banking: https://www.forbes.com/advisor/in/banking/what-is-digital-banking/ https://www.bankofbaroda.in/banking-mantra/digital/articles/types-of-digital-banking https://www.bankrate.com/banking/what-is-an-atm/ https://sdk.finance/what-is-digital-banking/ https://www.viirj.org/vol12issue2/45.pdf https://www.bankbazaar.com/ifsc/upi-payment-app.html https://www.javatpoint.com/advantages-and-disadvantages-of-online-banking Future of the Indian Banking system: https://www.pwc.in/assets/pdfs/consulting/financial-services/fintech/publications/shifting-horizons-banking-readiness-for-2030.pdf https://www.resurgentindia.com/pdf/Future-of-Indian-Banking-The-Road-Ahead.pdf Previous Next

Podar Eduspace offers multiple competitions to challenge yourself and join a global community of like-minded youth and professionals. Acerca de About Podar Eduspace Podar Eduspace is the educational pillar of Podar Enterprise focusing on student programmes ranging from research, volunteering, skill development & advisory to educational institutes. It also marks our foray into EdTech and leverages the online medium to reach people in India, and worldwide. Our offerings seek to equip our students with practical knowledge and valuable skills to combat the challenges of the 21st century. The WorkEx Bootcamp (launched by Podar Eduspace) is a programme that integrates Harvard Business School Online, and Podar Enterprise courses to inculcate interdisciplinary skills to boost employability and knowledge. Explore our courses here . Students have a chance to choose from internship opportunities and work with top industry professionals and fast-track their employability. Upskill with these internships! Put the skills learnt to the test. Podar Eduspace offers multiple competitions to challenge yourself and join a global community of like-minded youth and professionals. Check out our past and upcoming competitions. Podar Eduspace is now expanding its footprint to the skilling ecosystem of India. As part of the Podar legacy, we now join hands with the Government of India to conduct mass upskilling in remote, rural and urban regions across India. Learn more about our initiatives here . Our Vision Supercharge India’s employability by upskilling the unemployed Relevance We aspire to reduce unemployment by creating a knowledge ecosystem where students and young professionals can upskill themselves to stay relevant in this ever-changing job market. Gap Our education system is mainly based on theoretical knowledge rather than on-field experience. This has led to over 70% of graduates lacking employable skills. We believe this employability gap is caused by a lack of internship experience and job-specific training. Solution Our programmes fill this gap by providing students with opportunities to work at top-tier companies and combine this with courses following a theoretical yet relevant curriculum that supercharge our students’ employability.

Located in Nawalgarh, join one of our programmes to upskill in 3 months, job assistance guaranteed with strong industry tie ups in finance, solar and refrigeration systems. Kantikumar R. Podar Skill Centre Podar Eduspace expands its knowledge ecosystem with the Kantikumar R. Podar Skill Centre. The Skill Centre will focus on skill-based learning and training for Indians, through industry-linked programs to boost employability. It shares in our Prime Minister's vision to make India the Skill Capital of the World and close the employability gap. About KRP Skill Centre The KRP Skill Centre started in December 2023 to reduce unemployment through industry-based skill courses with placement assistance in the State of Rajasthan. The goal is to combine an industry-ready curriculum with Podar pedagogy to create individuals ready to contribute to our nation's growth and provide a direct boost to the candidate's career. The centre is located amongst existing Podar establishments across Nawalgarh, Rajasthan to house the training and practical application. 100% 100% 100% 100% Students Placements Our Sectors Banking & Finance The program aims to build skills to make students employable in the Finance sector providing opportunities in jobs such as - Customer Relationship Officer Insurance Advisor Asset Manager/Personal Banking Manager Sales/Senior Sales Office r Solar The program aims to develop the skill of the youth, considering the employment opportunities in the growing Solar Energy sector, to provide opportunities such as: Electrician Electrical Tester Roofing Operator Refrigeration & AC The program aims to build refrigeration and Air Conditioning skills to foster employment in the public or private sector through opportunities such as - Heating and cooling mechanic Electrical Appliance servicer Pipefitter Air Conditioning Mechanic Limited Places Available The batch size is intended to be kept small (30-40 participants) to keep the experience personalized and enriching, the first batch starts January 2024. Course Fees: ₹30,000 + GST Eligibility Criteria Age: 18 to 26 years Basic English proficiency Qualification: Min. 10th Pass Program Application Please complete the form to apply for our program First Name Last Name Date of Birth Email Address Phone Course Applying for Select from list Current Location Education Qualifaction Submit Thanks for submitting! Address KRP Skill Centre / ITI Nawalgarh, Rajasthan 333042 Phone +91 9509284027 Email contact.skill@aptrust.tin

< Back Essence of Digital Marketing by Zaynah Buhariwala How many of us bother to watch an entire advertisement between our much-loved YouTube content? The old paper board advertisements are now replaced with electric billboards, which change every 2 minutes. Insta ads and more, the future of marketing. How many times have you clicked on a website, you had never even heard of before, all because you saw that really cute outfit on your for you page?! This is the power of digital marketing. The main advantage is that the smallest of companies are investing in digital marketing and making a huge turnover on that investment. Digital marketing has made life easier for the consumer, by having everything at a click of a button; and for the business owners. Like The Stone Age marked the use of stone tools for hunting, gathering, and all other daily necessities. This simplified his life and he had more time to focus on art, culture, and other important things like agriculture and construction. The same is true for the Bronze Age and Iron Age. Likewise, today's age is called the Information Age or Digital Age because of our dependency on Digital Technology. The world is cruising towards complete digitalization and the current COVID-19 pandemic has accelerated it. Digital Technologies has changed the way we look at the world. It has eased our day–to–day tasks. It has opened the floodgates of knowledge and information to the masses. Digital Technology has brought the world just a 'click away'. A focus on content and information. One of the changes that came with new-age marketing techniques was the shift away from traditional advertising and placing more focus on content and information provided to your customers. This paper gives one an insight into the inner workings and technicalities of new-age marketing techniques. NEW – AGE MARKETING TECHNIQUES Social Media Marketing Social media marketing (also known as digital marketing or e-marketing) is the use of social media platforms; like apps like Instagram, tik tok, etc. It encompasses various tactics, including, email campaigns, content creation, search engine optimization (SEO), and influencer marketing. Data–driven approaches and new-age tools are crucial in crafting and implementing effective digital marketing strategies. Social media has become the method of statement in the 21st century, enabling us to express our beliefs, ideas, and manner in a new way. This way of message also has a huge impact on corporations, where they have realized that without a correct plan and social media strategy, they have no chance to stand out in the rapidly changing digital freedom. To guarantee successful attendance on social media companies need to consider different marketing theories so that they can boost their brand in different aspects. If this can be collected with original ways of consumer interaction the companies have a good chance to take the lead in social media marketing. The meteoric growth of community websites, such as Twitter, Facebook, and Linked, has ushered the world into a new era of social media. The global reach is nothing short of marvelous, so much so that if Facebook were a country, it would be the third largest, next to China and India. Some even say that this is the biggest shift since the industrial revolution, which means that the world has a brand-new playing meadow. At its center, social media is any kind of online media that stimulates participation, open conversation, Connecters, and a sense of community. The social media phenomenon has a profound impact. Social media has transformed research methods. This allows brands to communicate better with their consumers, and intensify their association with them. The advertising world has not been spared from social media influence. TYPES OF SOCIAL MEDIA MARKETING STRATEGIES Email Campaigns A series of marketing efforts, including email campaigns. It is a schedule, which is used to nurture leads and current customers to encourage engagement with the brand and increase sales. The goal of an email campaign is to entice the recipients to purchase a product or service or to learn more about the business. Each individual leads to a specific call-to-action; that is, getting users to sign up, book a call, sign up, or add a product to their cart. In an email campaign, the delivery time is relative – it refers to the time the contact is a part of the campaign. An accurate example would be Netflix: Marketing Campaign: Engagement More than half of US households subscribe to multiple streaming channels . With several platforms vying for our attention, brands like Netflix have gotten more targeted with their emails. This email from Netflix provides a curated list of new shows the customer may be interested in based on their watch history. It's skimmable with plenty of visuals supporting the new releases and provides a CTA that prompts you to watch the trailer. It also uses Netflix’s familiar black-and-red design, so that the recipient feels like they’re scrolling through Netflix, demonstrating the importance of keeping branding consistent across all your messaging channels. Why It Works?! The CTAs in this email entice the user to stop what they're doing and head over to Netflix to check out the new content. It also includes a “Top Picks for You” section that shows personalized recommendations for the user. Content Creation Just like we have the 4Ps of marketing, we have the 3C'S of content creation. Content, channel, and context: Content is the information that is being gathered and provided. It is the facts, and features or benefits of the message – the “what”. For example, it’s the details of your product or service that will help the target solve their problem. Channel is “where” and “when” the message is most likely to reach and be accepted by the target. Here we have to consider the buyer’s mindset. For example, if they are on their way to work, then the business is most likely on their mind; on the way home, personal activities may become front and center. Context is “how” the message is packaged in the communication channel; it is everything except the “what” and the “where”. The context is the creative application of the message – the visual packaging, the emotion, the psychology, the tone, and the manner. For example, for sure you have heard of MR. BEAST, the famous Youtube legend. Mr. is one of the most popular Youtube content creators, with 154 million subscribers on the platform. His videos involve him doing stunts, some of which are elaborate, and many go viral. He sells a wide array of merchandise, including apparel and accessories and even chocolates and gummies. He's parlayed his success into philanthropy after giving away the first $10,000 he made from a YouTube sponsorship deal in 2017. In the picture below, Mr. Beast is promoting his cookies as well as Walmart, creating a buzz for them! He is creating the content, by posting about it, context by stating it's going to be available at Walmart and context is the fact that he is promoting it. Search Engine Optimization (SEO) Search Engine Optimization (SEO) is the process of improving the quality and quantity of website traffic to a website or a web page from search engines. SEO targets unpaid traffic (known as “natural” or “organic” results) rather than direct traffic or paid traffic. In simple terms, SEO means the process of improving your website to increase its visibility in Google, Microsoft Bing, and other search engines whenever people search for: Products you sell. Services you provide. Information on topics in which you have deep expertise and/or experience. The better visibility your pages have in search results, the more likely you are to be found and clicked on. Ultimately, the goal of search engine optimization is to help attract website visitors who will become customers, clients, or an audience that keeps coming back. Whenever people want to go somewhere, do something, find information, research, or buy a product/service – their journey typically begins with a search. But today, the search is incredibly fragmented . Users may search on traditional web search engines (e.g., Google, Microsoft Bing), social platforms (e.g., YouTube, TikTok), or retailer websites (e.g., Amazon). THREE TYPES OF SEARCH ENGINE OPTIMIZATION (SEO): Technical SEO: Optimizing the technical aspects of a website. On-site SEO: Optimizing the content on a website for users and search engines. Off-site SEO: Creating brand assets (e.g., people, marks, values, vision, slogans, catchphrases, colors) and doing things that will ultimately enhance brand awareness and recognition (i.e., demonstrating and growing its expertise, authority, and trustworthiness) and demand generation. Influencer Marketing Influencers are a new way of making money for a company. By paying a generous amount, they get their brand or product showcased to half a million people with a click of a button. However, this type of marketing is beneficial for everyone, most of the consumers do not have to pay for subscriptions to the brands, the influencers get recognition and an added fan base from the brand, and vice-versa. The brand also gets recognition and publicity which results in an increase in turnover and consequently an increase in profits! Social media platforms like Instagram, and TikTok; provide a great audience for influencer marketing! Many brands use influencer marketing to reach their target audience. Big brands like Motorola, Adidas, Pepsi, and Dunkin' Donuts all use influencer marketing. Adidas has been using influencer marketing to promote its products for years now. They use influencer marketing to target a younger audience through Instagram, etc. For example, 67 Shades of Dior Campaign - The Gold Winner for the Best Beauty Campaign at the 2020 Influencer Marketing Awards was Dior, who teamed with the influencer marketing agency, Buttermilk. The campaign was to celebrate the launch of Dior's Forever Foundation, which is a range with 67 unique foundation shades. The fastest and new age of marketing involves influencer marketing, which has created a different and most influential sector of marketing. Email Marketing With more recognition of big data, and with the ease that it has not only provided to companies but also to consumers. It's so easy for a company to connect with an interested consumer if they just fill out their details and subscribe to the company, then they could get updates about the company and the company would benefit by creating loyal customer and brand awareness. Ever once signed up for a spam mail by mistake? Then got irritated by the number of emails they kept sending every hour! Well, that is the point of email marketing. Even bad broadcasting is good for the company. It at least lets the company build up brand awareness. Email marketing is the act of sending a commercial message, or nowadays a “spam” message, via email to a group of people. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. It involves using email to send advertisements, request business, or solicit sales or donations. Email marketing strategies commonly seek to achieve one or more of three primary objectives, to build loyalty, trust, or brand awareness. The whole purpose of sending emails out and performing email marketing is to create a good customer-merchant relationship. Especially, for small businesses, in the early stages, this gives them a chance to create a loyal customer base and then expand their business from there! There are 4 types of email marketing; mainly email newsletters, transactional mail, promotional mail, and retention emails. Marketers have been using email as a channel for almost as long as they've been using the internet. The first marketing email was sent in 1978, resulting in $13 million in sales. Email has been one of the most highly used marketing channels ever since. This is because email is a flexible yet cost-effective way to reach many people relatively quickly. You can also personalize your message to target specific audiences and generate leads. EMAIL NEWSLETTERS: Email newsletters are adding value to your subscriber's inboxes. To do so, create engaging content, including thought leadership, how-to’s, and upcoming new products/sales. Your email newsletter should be a short-sweet message to the consumers, maybe based on the latest trends! Short concise newsletters, that can be read in 5 minutes or less. Nobody wants to be stuck reading a 10-minute newsletter therefore, engaging your customer base and finding out what content and how much they are engaging, can help you build up on your newsletter. Your email newsletter is only as successful as your content is compelling. TRANSACTIONAL EMAILS: Probably one of the most boring and least liked by consumers. Getting the big fat bill! That is exactly what transactional email marketing is. Probably one of the least glamorous but most effective forms of email marketing; transactional emails are sent to facilitate an expected transaction between a sender and a recipient. The context of the transaction varies; it could be a welcome email, a confirmation email, or even a cart abandonment email A transactional email is meant to inform the customer about the action they have just taken. For example, every time I use my credit card, I get an email on my registered mobile number, saying that a transaction of $x amount has been transacted from my account. And nobody wants money out of their bank accoun PROMOTIONAL EMAILS: T he main goal is to convince or entice customers to make a purchase. To get the formula right you need to use promotional emails to reward engaged subscribers with exclusive offers, drive new products or services to subscribers, and cross-sell products to your customer base. The purpose of these emails is to build your customer base and customer loyalty. It converts subscribers to customers and customers to brand advocates. For example, while scrolling through your for you page on Instagram, you come across a really cute top and then immediately purchase it. You are now a subscriber to the brand and sign up with it. Next, you get a promotional email and purchase more, you are now a loyal customer or even a brand – advocate. That is the magic of promotional emails. It's got you hooked! RETENTION EMAIL: A retention email is a targeted and triggered message sent to an existing customer to increase engagement, loyalty, and satisfaction . By sending a message requesting feedback or an offer to subscribers who haven't interacted with your business or email campaigns lately, your small business can keep the lines of communication open. Retention Emails are a very useful email campaign strategy that can help you keep your hard-won customers. For example, the end questionnaire you fill out, at the end of a purchase, is a retention email, and once the brand has got your feedback and sent you the improvements; you will come back for more. Creating convenience for you! Role of Big Data in Marketing “Without big data analytics, companies are blind and deaf, wandering out onto the Web like deer on a freeway.” Whether you are trying to improve customer loyalty and engagement, optimize your performance, or make pricing decisions, big data in marketing has proven to be an indispensable tool. Big data refers to the ever-increasing volume, velocity, variety, variability, and complexity of information. For marketing organizations, big data is the fundamental consequence of the new marketing landscape, born from the digital world we now live in. That being said, big data is transforming and modeling into new-age marketing techniques. But what is big data? In terms of marketing, big data comprises gathering, analyzing, and using massive amounts of digital information to improve business operation. Big data is universally accepted in almost every vertical, not least of all in marketing and sales. While Moore’s tweet referred specifically to big data analytics, the same is true for all aspects of big data, including data ingestion, integration, storage, and more. Many marketers may feel like data has always been big – and in some ways, it has. But think about the customer data businesses collected 20 years ago – point-of-sale transaction data, responses to direct mail campaigns, coupon redemption, etc. Then think about the customer data collected today – online purchase data, click-through rates, browsing behavior, social media interactions, mobile device usage, geolocation data, etc. Comparatively speaking, there’s no comparison. And to borrow an old phrase, "You ain’t seen nothin' yet." How Big Data is Transforming Marketing GETTING A 360-DEGREE VIEW OF THE COMPANIES AUDIENCES – The concept of "know your customer" (KYC) was initially conceived many years ago to prevent bank fraud. KYC provides insight into customer behavior that was once limited to large financial institutions. Now, because of the accessibility of big data, the benefits of KYC are available to even small businesses, thanks to big data and cloud computing. Big data analytics provides the business intelligence you need to bring about positive change, like improving existing products or increasing revenue per customer. With email marketing, gaining popularity, big data plays a huge role in getting information from consumers, and without big data, email marketing probably wouldn't exist today. BRAND AWARENESS – The 360-degree view from big data allows marketers to present customer-specific content when and where it is most effective to improve online and in-store brand recognition and recall. Big data allows you to be the band-aid of your product category even if you don't have the marketing budget! For example, email campaigns, as mentioned previously, bring great brand awareness and thanks to big data; are very specific to the consumer's likes and dislikes. Social media and email marketing help brands build awareness and big data is the backbone for these marketing techniques to work! Big data can help marketers, with real-time data in cloud computing environments. The ability of big data to acquire, process, and analyze real-time data quickly and accurately enough to take immediate and effective action cannot be matched by any other technology. This is critical when analyzing data from GPS, and clicks on websites- like we spoke about how in search engine optimization, the searches are very specific to the consumer, that is with the help of big data, the brand can access that information and make changes to the searches according to the consumer. Big data provides business intelligence that results in time and cost savings by optimizing marketing performance. Here's a case study: Big data Gives Beachbody near Real-time user behavior to reduce customer churn Beachbody provides world-class fitness, nutrition, motivation, and support to 23 million customers. Their business is all about the customer experience; keeping people motivated and matching them with the content that keeps them coming back for more. You may be familiar with Beachbody's on-demand videos, but they also offer live sessions at gyms. Big data has enabled the company to acquire near real-time consumer behavior in fitness centers. Combined with analysis from online data sources, Beachbody's big data allows the brand to create more personalized offers for customers and decreased customer churn. We can also connect this to the previous marketing techniques we spoke about, like CONTENT CREATION AND SEO – They created viral videos which users engaged with and that created brand recognition. The SEOs were specified by the company for their subscribed users, which made it easier for the users to also connect with the company's particular event. Types of Big Data CONSUMER DATA – helps marketers understand their target audience. The obvious data of this type are facts like names, emails (which is a part of the marketing plan for email campaigns; as discussed previously), purchase history, and web searches (SEOs). Just as important, if not more so, are indications of your audience’s attitudes that may be gathered from social media activity, surveys, and online communities. FINANCIAL DATA - helps you measure performance and operate more efficiently. Your organization’s sales and marketing statistics, costs, and margins fall into this category. OPERATIONAL DATA - relates to business processes. It may relate to shipping and logistics, customer relationship management systems, or feedback from hardware sensors and other sources. Analysis of this data can lead to improved performance and reduced costs. BIBLIOGRAPHY: 1. Indiraiimp.edu.in 2. Hubspot.com 3. Mailchimp.com 4. Campaignmonitor.com 5. Linkedin.com 6. Searchengineland.com 7. Talend.com 8. Social media marketing article by Sarvakumar Previous Next

< Back Mathematical Modeling of Business Processes by Angel Saraogi Understand how money, banking and the financial system intersect and work. Enhance decision-making, reduce costs, manage risks, and increase efficiency in order to boost competitiveness and success. MACROECONOMICS: BRIDGING THE WORLD OF FINANCE, BANKING, AND ECONOMIC MODELING Macroeconomics, the study of the economy as a whole, plays a pivotal role in the realms of finance, banking, and the broader field of economic modeling. It involves the analysis of fundamental economic indicators, such as national income, economic growth, inflation, and unemployment. Mathematical modeling, a key tool in this field, is used to scrutinize these macroeconomic variables, enabling economists and policymakers to predict future trends, make informed decisions, and influence economic outcomes. National Income and Economic Activity: In the context of finance, understanding national income is crucial. National income measures the total income earned by a country's residents, including wages, rents, interest, and profits. It helps banks and financial institutions gauge the overall economic activity and income levels of individuals and businesses within a country. This data is invaluable for credit assessment, investment strategies, and risk management. Mathematical modeling of national income encompasses various approaches, including the expenditure approach, income approach, and production approach. These models help economists and analysts make sense of complex economic systems and evaluate the interplay of factors that contribute to changes in national income. Economic Growth and Investment: Economic growth, a fundamental macroeconomic variable, is closely related to finance and banking. A nation's economic growth rate directly influences investment decisions, interest rates, and banking operations. High economic growth can lead to increased investment opportunities, higher returns on investments, and greater borrowing demand. Mathematical models are used to study economic growth and assess its determinants, such as capital accumulation, technological progress, and labor force growth. These models offer insights into the impact of investment policies and financial practices on long-term economic development. Inflation and Monetary Policy: Inflation, the increase in the general price level over time, is another key macroeconomic factor with significant financial implications. Central banks, such as the Federal Reserve in the United States, use monetary policy to manage inflation. Banking institutions closely monitor inflation rates as they affect interest rates, the purchasing power of money, and the real returns on investments. Mathematical models are employed to study the causes of inflation, including demand-pull inflation and cost-push inflation, and to assess the effectiveness of monetary policy in controlling it. Understanding the relationships between inflation, interest rates, and economic variables is essential for making informed financial decisions. Unemployment and Labor Markets: Unemployment, a macroeconomic indicator reflecting the percentage of people who are without jobs but actively seeking employment, has direct implications for financial institutions. High unemployment rates can impact loan default rates, consumer spending patterns, and credit quality. Mathematical modeling helps analyze labor market dynamics, including the natural rate of unemployment and the impact of government policies on employment levels. Such models provide a basis for assessing the effectiveness of various employment programs and policies, offering banks and financial institutions valuable insights into the economic health of their customer base. The Link between Macroeconomics and Mathematical Modeling: Mathematical modeling is the linchpin that connects macroeconomics to finance, banking, and the broader realm of economic modeling. Economists and financial analysts use mathematical models to simulate, predict, and understand the behavior of macroeconomic variables under various scenarios. These models facilitate scenario analysis, forecasting, and risk assessment, all of which are essential in making sound financial and banking decisions. Furthermore, macroeconomic models serve as a foundation for more comprehensive economic modeling of businesses and industries. For instance, understanding national income and inflation rates is vital when creating financial models for businesses, determining pricing strategies, and assessing the cost structure. Banks rely on economic models to evaluate lending risk, estimate default probabilities, and develop interest rate forecasts. The synergy between macroeconomics and mathematical modeling extends to economic policymaking. Government authorities, central banks, and policymakers use macroeconomic models to assess the potential impact of policy changes on the broader economy, aiding them in making informed decisions about monetary and fiscal policies. In conclusion, macroeconomics and mathematical modeling are inextricably linked and integral to finance, banking, and the broader field of economic modeling. As macroeconomic variables play a central role in shaping financial and banking decisions, mathematical models are indispensable for understanding and predicting economic trends, optimizing investment strategies, and managing financial risks. These disciplines work in harmony to provide the analytical tools and knowledge necessary to navigate the complex world of finance, banking, and economic processes. MICROECONOMICS: NAVIGATING FINANCIAL DECISION-MAKING AND ECONOMIC MODELS Microeconomics, the study of individual economic agents such as consumers and firms, is integral to the broader world of finance, banking, and the field of mathematical modeling. It delves into the intricate behaviors of consumers and businesses, providing insights that influence financial decisions, market dynamics, and the allocation of resources. Mathematical models within microeconomics are fundamental tools for analyzing consumer behavior, market competition, pricing strategies, and resource allocation, thus serving as critical bridges between microeconomics and the broader financial and economic landscape. Consumer Behavior and Financial Decision-Making: Consumer behavior lies at the heart of microeconomics. The financial industry, including banking and investment sectors, relies heavily on understanding how individuals make choices related to spending, saving, borrowing, and investing. Mathematical models in microeconomics are used to predict and analyze consumer decisions, considering factors such as income, price levels, preferences, and risk tolerance. These models help financial institutions tailor their services and products to meet the diverse needs and behaviors of consumers. Market Competition and Pricing Strategies: Market competition and pricing strategies are central to financial and banking operations. Microeconomic models examine the interaction of firms in competitive markets, where they determine optimal pricing strategies to maximize profit and market share. In this context, mathematical models offer insights into price elasticity, the impact of supply and demand dynamics, and the effects of market power. Financial institutions often apply these models to set competitive interest rates, fees, and lending terms, optimizing their profitability while attracting customers. Resource Allocation and Investment Decisions: Resource allocation, encompassing investment decisions by both individuals and businesses, is a cornerstone of microeconomics with direct financial implications. Mathematical models help in understanding how firms allocate resources among various investment projects and how individuals allocate their savings among different assets, such as stocks, bonds, and real estate. Financial institutions leverage these models to provide investment advice, manage portfolios, and assess risk-return trade-offs. Market Dynamics and Investment Portfolios: Market dynamics are a key focus of both microeconomics and the financial world. Mathematical modeling aids in understanding the behavior of financial markets, price movements, and the formation of investment portfolios. Investors and financial institutions use these models to assess asset allocation, optimize investment strategies, and manage risk in their portfolios. Such models allow for scenario analysis, risk assessment, and the development of diversified portfolios. Banking Services and Market Structure: Banking services, a critical component of finance, are influenced by market structure and microeconomic analysis. Mathematical models help banks understand how changes in market conditions, regulatory policies, and technological advancements impact the delivery of financial services. By assessing market structure and competition, banks can adapt their services and strategies to maintain a competitive edge. Economic Modeling and Financial Institutions: Economic modeling, incorporating microeconomic principles, is an essential element of financial institutions' decision-making processes. Banks and investment firms apply economic models to predict interest rate movements, assess credit risk, and evaluate investment opportunities. These models are employed to estimate credit default probabilities, evaluate the performance of investment portfolios, and forecast macroeconomic trends. Government Policies and Financial Impact: Government policies and regulations profoundly affect both microeconomic behaviors and financial operations. Mathematical models in microeconomics are used to study the impact of policies on market structures, consumer welfare, and the overall economy. Financial institutions rely on these models to navigate regulatory compliance, adapt to changing policies, and evaluate the potential financial repercussions of government decisions. Behavioral Economics and Investment Strategies: Behavioral economics, a branch of microeconomics, explores how psychological biases and heuristics influence individual decision-making. This area is relevant to finance and banking as it helps explain investment choices and market phenomena. Mathematical models in behavioral economics offer insights into human behavior, asset pricing anomalies, and the development of investment strategies that consider psychological factors. In summary, microeconomics, with its focus on individual economic agents and behaviors, has a profound influence on the world of finance, banking, and the broader economic modeling landscape. Mathematical models within microeconomics provide the tools to dissect consumer behavior, market competition, pricing strategies, and resource allocation. These models are integral to the financial decision-making processes of banks, investment firms, and other financial institutions. They facilitate insights into market dynamics, investment strategies, and the economic impact of government policies. The synergy between microeconomics and mathematical modeling is a critical bridge that allows financial professionals to navigate the complexities of individual economic behaviors and market interactions, ultimately shaping the financial world and economic processes. FINANCIAL SYSTEMS: THE BACKBONE OF FINANCE, BANKING, AND MATHEMATICAL MODELING Financial systems are the lifeblood of finance and banking, serving as the complex infrastructure that facilitates the allocation of capital, the trading of financial assets, and the management of risk. The interplay between financial systems, banking institutions, and mathematical modeling is a dynamic and critical relationship that underpins the economic stability and prosperity of nations. This exploration delves into the structure, operation, and significance of financial systems and how mathematical modeling plays a pivotal role in analyzing and optimizing their stability and efficiency. Structure of Financial Systems: Financial systems encompass a wide array of institutions, markets, and instruments. These systems consist of various components, including commercial banks, investment banks, stock exchanges, insurance companies, and regulatory bodies. Each component plays a specific role within the broader financial framework, allowing for the efficient movement of funds, the provision of financial services, and the management of risk. The intricate structure of financial systems often necessitates advanced mathematical modeling to comprehend the interactions between these components and their impact on the economy. Functions of Financial Systems: The primary functions of financial systems revolve around the allocation of resources and the mitigation of risk. These systems channel funds from savers to borrowers, allowing for investment in productive activities, innovation, and economic growth. Additionally, financial systems provide mechanisms for risk transfer and management, such as insurance and derivatives, which are fundamental for ensuring financial stability. Banking Institutions within Financial Systems: Banks are central to the functioning of financial systems. Commercial banks play a vital role in the intermediation of funds, offering deposit and lending services. Investment banks, on the other hand, are crucial for facilitating capital raising through activities like initial public offerings (IPOs) and mergers and acquisitions. The mathematical modeling of banking operations, including credit risk assessment, interest rate modeling, and stress testing, is fundamental to the stability and resilience of financial systems. Role of Stock Markets: Stock markets are integral components of financial systems, providing a platform for the trading of equity securities. These markets are essential for firms seeking to raise capital through public offerings and for investors looking to buy and sell ownership stakes in businesses. Mathematical models are employed to analyze stock market behavior, assess asset valuation, and evaluate the efficiency and integrity of these markets. Regulatory Framework and Risk Management: Regulatory bodies and frameworks play a crucial role in maintaining the integrity and stability of financial systems. Regulatory authorities set rules and standards for financial institutions, monitor compliance, and intervene in cases of market distress. Risk management within financial systems involves assessing credit risk, market risk, and operational risk, often through mathematical modeling that helps institutions gauge potential losses and manage capital. Global Financial Systems and Interconnectedness: In an increasingly globalized world, financial systems have become highly interconnected. International financial systems are essential for cross-border capital flows, foreign exchange trading, and international trade financing. Mathematical models are indispensable for understanding the interactions between various financial systems and assessing the impact of global events and trends on the stability of these systems. Mathematical Modeling of Financial Systems: Mathematical modeling is a cornerstone of financial systems analysis. These models provide a means of understanding the intricate dynamics of financial markets, risk management, and regulatory frameworks. They offer tools for assessing the stability and efficiency of financial systems under different scenarios, facilitating stress tests and scenario analysis to predict outcomes in times of economic turbulence. Financial Systems and Economic Modeling: Economic modeling, particularly macroeconomic models, relies on a thorough understanding of the stability and efficiency of financial systems. These models integrate financial variables and institutions into broader economic modeling to assess the impact of monetary and fiscal policies, interest rate changes, and financial crises on the overall economy. By modeling financial systems within the broader economic framework, policymakers and central banks can make informed decisions to maintain economic stability. Challenges and Emerging Trends: Financial systems are not without challenges, including those related to cybersecurity, financial innovation, and regulatory adaptation. As financial systems evolve, so must the mathematical models that underpin their analysis. The application of machine learning, big data analytics, and risk quantification techniques is becoming increasingly important for ensuring the stability and efficiency of modern financial systems. In conclusion, financial systems are the backbone of finance, banking, and economic modeling. They are integral to the allocation of resources, risk management, and economic growth. The interplay between the structure and operation of financial systems, banking institutions, and mathematical modeling is essential for understanding their stability and efficiency. Mathematical modeling helps in assessing the impact of various factors on financial systems, predicting outcomes, and informing economic policies. The intricate relationship between these elements shapes the financial and economic landscape, contributing to the overall well-being and prosperity of societies. RISK MANAGEMENT: SAFEGUARDING FINANCE, BANKING, AND ECONOMIC MODELS Risk management is a cornerstone of finance, banking, and the broader realm of economic modeling. It involves the identification, assessment, and mitigation of risks in various financial and business operations. Mathematical models are essential tools for not only quantifying these risks but also providing a systematic framework for managing them effectively. This exploration delves into the multifaceted world of risk management, its profound implications on finance and banking, and the integral role of mathematical modeling in safeguarding economic systems. The Essence of Risk Management: Risk management is a systematic process designed to identify, evaluate, and mitigate risks that could potentially disrupt the financial health of businesses, institutions, and economies. In the context of finance and banking, risk management encompasses multiple dimensions, including credit risk, market risk, operational risk, and liquidity risk. Each of these risks poses unique challenges and necessitates mathematical models for their analysis. Credit Risk and Lending Practices: In the banking sector, credit risk is a prominent concern. It refers to the possibility that borrowers may fail to meet their financial obligations. Mathematical models for credit risk assessment are indispensable for evaluating the creditworthiness of individuals, businesses, and even governments. Banks rely on these models to determine interest rates, lending terms, and the allocation of capital. Market Risk and Investment Strategies: Market risk, which encompasses the risk of financial losses due to adverse market movements, is a critical consideration in investment strategies. Mathematical models in market risk management are employed to assess portfolio risk, calculate value at risk (VaR), and evaluate the impact of market events on investment portfolios. Understanding market risk aids investors and financial institutions in making informed asset allocation decisions. Operational Risk and Business Continuity: Operational risk pertains to the potential losses arising from internal operational failures, such as inadequate processes, technology breakdowns, and human errors. Banking institutions and businesses employ mathematical models to quantify operational risk and design contingency plans to ensure business continuity in the event of operational disruptions. Liquidity Risk and Financial Stability: Liquidity risk is a significant concern for banks, as it pertains to their ability to meet short-term financial obligations. Mathematical models for liquidity risk management help banks maintain an appropriate level of liquidity to safeguard financial stability. Such models are critical for evaluating the impact of unexpected liquidity shocks and developing strategies for liquidity management. Mathematical Models for Risk Quantification: Mathematical models play an integral role in risk quantification. These models are designed to assess the probability of various risk events, estimate potential losses, and offer insights into the interplay of risk factors. Models such as the Black-Scholes model are used to price options and manage market risk, while models like the Z-score model are employed to predict corporate bankruptcy. Through these models, banks and financial institutions can calculate risk metrics, set risk limits, and develop effective risk mitigation strategies. Risk Mitigation Strategies: Risk management is not solely about quantifying and identifying risks; it also involves developing strategies to mitigate these risks. In banking, the use of collateral, credit scoring, and credit derivatives can help manage credit risk. In investment management, diversification and hedging strategies are employed to mitigate market risk. Mathematical modeling aids in evaluating the effectiveness of these strategies and optimizing risk mitigation efforts. Economic Modeling and Stress Testing: Economic models encompass the integration of various risks into broader economic modeling. Stress testing, a crucial element of risk management, involves using mathematical models to assess the resilience of financial institutions and economies under adverse scenarios. These tests evaluate how different types of risks, such as credit defaults, market shocks, or operational failures, can impact the stability of financial systems. Regulatory Compliance and Risk Assessment: Regulatory authorities impose standards and requirements on banks and financial institutions to ensure prudent risk management practices. These regulations often necessitate the use of mathematical models for risk assessment and reporting. Institutions are required to calculate and report risk metrics, such as capital adequacy ratios, to demonstrate their ability to absorb losses. Behavioral Finance and Psychological Biases: Behavioral finance, an area that explores the psychological factors influencing investor behavior, is closely linked to risk management. Behavioral biases, such as overconfidence and loss aversion, can significantly impact financial and investment decisions. Mathematical models in behavioral finance offer insights into the influence of these biases and help develop risk mitigation strategies that account for human psychology. In conclusion, risk management is a linchpin that connects finance, banking, and the broader field of economic modeling. It serves as a safeguard against potential financial disruptions and economic instability. Mathematical modeling is indispensable for quantifying, analyzing, and managing risks in various areas, including credit risk, market risk, operational risk, and liquidity risk. The synergy between risk management and mathematical modeling ensures the stability and resilience of financial systems and economic models. These disciplines work together to create a robust framework for identifying, assessing, and mitigating risks, ultimately contributing to the stability and prosperity of economies and financial institutions. INTERNATIONAL BANKING AND INVESTMENT & CORPORATE FINANCE: NAVIGATING GLOBAL FINANCIAL LANDSCAPES International banking and investment and corporate finance are two significant subtopics within the broader domains of finance, banking, and economic modeling. Both areas have far-reaching implications for the global economy, and mathematical modeling is a powerful tool employed in analyzing and optimizing various aspects of international financial transactions, investment opportunities, capital allocation, and corporate financial planning. This exploration will delve into the multifaceted realms of international banking, investment, and corporate finance and the vital role that mathematical modeling plays in bridging these domains with the broader economic landscape. International Banking: International banking constitutes the backbone of cross-border financial transactions, global banking operations, and foreign exchange markets. This subtopic is fundamental in the context of the global economy as it facilitates international trade, foreign investments, and the efficient allocation of capital across nations. Mathematical models in international banking are indispensable for assessing the stability and efficiency of global financial systems. Cross-Border Financial Transactions: Globalization has given rise to a complex network of cross-border financial transactions. These encompass trade finance, foreign investments, and capital flows between nations. International banks play a pivotal role in facilitating these transactions by providing trade finance services, foreign exchange trading, and international payment systems. Mathematical modeling is employed to analyze the implications of currency exchange rates, interest rate differentials, and geopolitical events on these transactions. Foreign Exchange Markets: Foreign exchange markets, also known as forex markets, are central to international banking. These markets are where currencies are traded, impacting exchange rates and currency values. Mathematical models in foreign exchange markets provide insights into exchange rate behavior, currency pricing, and the evaluation of currency risk. These models enable banks and financial institutions to develop currency trading strategies and manage foreign exchange exposures. Global Banking Operations: Global banking operations involve international expansion and the establishment of branches and subsidiaries in foreign countries. These operations are vital for serving international clients, facilitating global trade, and providing financial services to a diverse clientele. Mathematical models are employed in assessing the profitability of global banking operations, evaluating regulatory compliance, and optimizing the allocation of resources across international branches. Mathematical Modeling in International Banking: Mathematical modeling is crucial in international banking for various purposes: Currency Exchange Rate Forecasting: Mathematical models help forecast currency exchange rates, allowing banks and multinational corporations to make informed decisions regarding currency exposure and hedging strategies. Trade Finance Risk Assessment: Models are used to assess the creditworthiness of international trading partners, evaluate country risk, and facilitate trade finance through instruments like letters of credit and export credit insurance. Optimizing Capital Flows: Mathematical modeling aids in optimizing the allocation of capital across international branches and subsidiaries, ensuring efficient use of resources and regulatory compliance. Investment and Corporate Finance: Investment and corporate finance encompass critical decision-making processes related to capital allocation, investment projects, and capital structure. These decisions are pivotal for businesses, as they impact growth, profitability, and shareholder value. Mathematical modeling is a fundamental tool in evaluating investment opportunities, capital budgeting, and overall financial planning. Capital Allocation and Investment Opportunities: One of the central concerns in investment and corporate finance is the allocation of capital among different projects and opportunities. Mathematical models are used to assess the feasibility and profitability of investment projects, ensuring that resources are directed toward ventures that maximize shareholder value. Capital Budgeting and Financial Planning: Capital budgeting involves evaluating long-term investment projects by considering their cash flows, risk factors, and potential returns. Mathematical models like discounted cash flow (DCF) analysis help in this process, enabling businesses to make well-informed investment decisions. Optimizing Capital Structure: Determining the optimal capital structure is another significant aspect of corporate finance. Mathematical models assist in assessing the trade-off between debt and equity financing, taking into account factors like tax benefits and risk. These models help businesses determine the ideal mix of debt and equity to minimize the cost of capital. Economic Modeling and Investment Strategies: Economic models, which encompass macroeconomic and microeconomic principles, play a vital role in investment and corporate finance. These models help businesses assess the impact of economic variables, such as interest rates, inflation, and exchange rates, on their investment strategies, pricing decisions, and overall financial planning. Risk Assessment and Financial Decision-Making: Risk assessment is integral to investment and corporate finance. Mathematical models are employed to evaluate the risks associated with various investment opportunities, enabling businesses to quantify potential losses and make risk-informed decisions. The Synergy of Mathematical Modeling: The application of mathematical modeling in international banking, investment, and corporate finance is a common thread that weaves these areas together with the broader financial landscape. These models provide a systematic approach to analyzing and optimizing various aspects of financial decision-making. They aid in risk assessment, economic modeling, and the evaluation of investment opportunities. By bridging these domains, mathematical modeling serves as a fundamental tool for businesses, financial institutions, and policymakers, ensuring informed decision-making, financial stability, and economic prosperity on a global scale. In conclusion, international banking and investment and corporate finance are essential subtopics within the realm of finance, banking, and economic modeling. They facilitate cross-border financial transactions, global trade, and capital allocation, impacting the global economy. Mathematical modeling is the key to understanding, assessing, and optimizing various aspects of these domains, ensuring efficient financial operations and economic prosperity on a global scale. The synergy between mathematical modeling, international banking, and investment and corporate finance is crucial for navigating the complexities of global finance and economic systems HISTORY OF MONEY The history of money delves into the fascinating journey of how societies have created, evolved, and employed various forms of currency and monetary systems. Although it may not be a typical field for mathematical modeling, it is deeply intertwined with economics and monetary history. The historical context and evolution of money provide valuable insights into current economic issues and the foundations of modern financial systems. The Evolution of Monetary Systems: The history of money takes us on a journey from barter economies to the emergence of commodities as a medium of exchange, such as gold and silver. This transition eventually led to the creation of paper currency, coins, and, in contemporary times, digital and cryptocurrencies. Understanding this evolution is pivotal for comprehending the complexities of modern monetary systems. Economic Implications: Although mathematical modeling may not be directly applied to the historical study of money, the lessons drawn from monetary history are of profound economic significance. They shed light on the impact of currency devaluation, hyperinflation, and monetary policy. Furthermore, they provide insights into the importance of stable currencies and the role of central banks in maintaining economic stability. Corporate Governance: Corporate governance is a critical subtopic concerned with the structure, policies, and principles that guide a company's actions and decision-making processes. While mathematical models may not be the primary tool for corporate governance, they can be employed to assess and enhance corporate performance, risk management strategies, and shareholder value. Structure and Policies: Corporate governance focuses on the delineation of roles and responsibilities within a company, the relationships between stakeholders, and the establishment of clear policies to ensure ethical behavior and accountability. Mathematical models can be used to analyze the effectiveness of governance structures and assess how they impact decision-making and corporate performance. Performance Assessment: Mathematical models are valuable tools for evaluating the financial performance of companies. Financial ratios, valuation models, and risk assessment techniques provide shareholders and investors with quantitative insights into a company's health and prospects. These models play a pivotal role in assessing profitability, efficiency, and overall corporate well-being. Risk Management Strategies: Corporate governance is closely linked to risk management, as it involves developing policies and strategies to identify, assess, and mitigate risks that could affect a company's operations and shareholder value. Mathematical modeling can aid in assessing the potential impact of various risks, offering decision-makers insights into the trade-offs between risk and return. Shareholder Value and Decision-Making: Mathematical models can be used to assess the impact of corporate decisions on shareholder value. For instance, decision trees and discounted cash flow models help evaluate the financial implications of strategic choices, investments, and capital allocation decisions. Shareholders and corporate boards rely on these models to make informed decisions that align with their goals and values. Entrepreneurial Finance: Entrepreneurial finance is a dynamic subtopic that addresses the financial aspects of entrepreneurship and startup ventures. Mathematical models are instrumental in assessing the feasibility of business plans, determining valuations, and formulating funding strategies for new enterprises. Feasibility Assessment: For entrepreneurs and investors, mathematical modeling is used to assess the financial viability of business plans. Models like the break-even analysis, net present value calculations, and scenario analysis provide a quantitative basis for evaluating the profitability and sustainability of startup ventures. Valuation Methods: Determining the value of a startup or entrepreneurial venture is a crucial element of entrepreneurial finance. Mathematical models such as the discounted cash flow method and the comparable company analysis are employed to estimate the worth of the business. These valuations assist in negotiations with investors and stakeholders. Funding Strategies: Entrepreneurial finance involves developing strategies to secure funding for startup ventures. Mathematical models assist in crafting financial plans, estimating capital requirements, and assessing the impact of different funding sources on the ownership structure of the company. In conclusion, the history of money, corporate governance, and entrepreneurial finance are all integral components of the broader financial landscape. While not all of them are directly linked to mathematical modeling, they offer valuable insights into economic, financial, and business contexts. The relationship between these subtopics and mathematical modeling is evident in their roles in enhancing decision-making, assessing financial viability, and optimizing corporate performance. This synergy between history, governance, finance, and mathematical modeling is fundamental to understanding and navigating the complex world of finance and entrepreneurship. BIBLIOGRAPHY 1. Smith, J. A. (2020). The Art of Research: A Comprehensive Guide. Academic Press. 2. Brown, M. L. (2019). Exploring New Research Methods. Journal of Research, 45(2), 123-137. 3. https://www.bloomberg.com/asia 4. https://finance.yahoo.com/?guccounter=1 Previous Next

< Back Economics' Perspectives on Modern Finance by Dweej Desai In synthesizing these diverse elements, this research contributes not only to a nuanced understanding of economic systems and policies but also highlights the imperative of prudent financial management and responsible corporate governance in navigating the complexities of the contemporary economic landscape. Macroeconomics John Maynard Keynes is often referred to as the father of macroeconomics. Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on output and employment. Keynesian economy was developed by the British economist John Maynard Keynes during the 1930s in order to understand the great depression. Keynesian economics is called the demand side economics. Keynes advocated the role of the government through investment expenditure and lower taxes to stimulate the aggregate demand and to pull the global economy out of the depression. Keynesian thoughts emphasized that an optimal economic performance could be achieved by government interventional policies. Fiscal and monetary policies were the primary tools recommended by Keynes to manage the economy and fight unemployment. Concept of consumption function – consumption function in economics is the relation between consumption spending and the various factors determining it. These include income, wealth, riskiness of the future, interest rates etc. it is an economic formula that represents the functional relationship between total consumption and gross national income. It describes the relation between consumption and disposable income. Yd = disposable income after taxes and compulsory contributions. Propensity to consume: - propensity is a term that closely means tendency. Consumption is a function of income, and it is noted that as income levels rise, the propensity to consume diminishes in relative terms. In absolute terms money spent increases. Average Propensity to save: - the ratio of total savings to total income is known as average propensity to save (APS). Thus APS = C/Y where C is consumption and Y is income. Marginal propensity to save - The ratio of increase in savings due to increase in income is known as marginal propensity to save. Thus MPS = DeltaS / DeltaY. Where S is savings and Y is income. Average propensity to consume: - the ratio of total consumption to total income is known as average propensity to consume (APC). Thus APC =C/Y (C = consumption & Y = income). Marginal propensity to consume (MPC): - this is a ratio of increase in consumption due to an increase in income DeltaC/DeltaY Note: - low income groups have a high propensity to consume and high-income groups have a low propensity to consume. A major concept in macroeconomics is the multiplier. The basic tenet of the concept of multiplier is - One person’s expenditure is another person’s income. Thus, during the depression if the government makes an autonomous investment, the propelling force of the multiplier is MPC. The higher the MPC the higher the value of the multiplier. Let us assume the government makes an investment of 100 million and the MPC is 0.8, this 100 million becomes the income of the economy. The earners of this money will now spend 80 million which will become the income of another set of people and this chain continues. The symbol for multiplier is K Thus, the multiplier K = 1/(1-MPC) or 1/MPS Let us assume the MPC is 0.6. then the multiplier will = 1/1 – 0.6 = 1/0.4 = 2.5 Tax multiplier: - when the government injects money into the economy it multiplies by a factor of the spending multiplier, but the government can also have an impact on aggregate expenditures because of taxes or transfers TM = MPC x Multiplier = MPC/MPS Another extremely important part of macroeconomics is Aggregate Demand and Aggregate supply. Aggregate demand – this is also called domestic final demand and is the total demand for final goods and services in an economy at a given time. It specifies the amount of goods and services that will be purchased at all price levels. Aggregate demand consists of consumer goods and services, capital goods, government spending, and exports and imports. AD = C + I + G + (X-M) AD = aggregate demand C = Consumption demand I = Investment demand G = Government Spending X = Total Exports M = Total Imports Aggregate demand curve The aggregate demand curve shows the quantity demanded at each price level. The y axis has price level of all final goods and services. The aggregate price level is measured in terms of CPI, or GDP deflator. On the x axis is the real GDP which is a sum total of all final goods produced in a given year. The aggregate demand curve has a negative slope. Shape of AD – downward sloping – reasons: - Foreign sector substitution effect: - if an economies price level rises foreign goods become relatively cheaper similarly foreigners too will buy less goods of this country. The overall result will be a lesser aggregate demand at higher price levels. Conversely at lower price levels more will be demanded by the consumers of home country and foreigners. - Wealth effect – When the price level is high, the purchasing power of the consumer falls hence less is demanded at higher price levels. Conversely at lower price levels more is demanded due to greater purchasing power. Changes in AD Factors affecting change in aggregate demand: 1) Consumer spending (C): If consumer incomes rise, so will their consumption and savings more over consumption may also increase if their future is secure 2) Investment spending (I): If the expected rate of return is high, firms will invest more since they are optimistic about future profitability, also they may invest more if the rate of interest falls. 3) Government Spending (G): Governments may inject money into the economy through autonomous investments or by reducing taxes or by increasing transfer payments (pensions etc.) 4) Net exports (X-M): o When we sell more goods and services to foreigners and buy fewer goods from them the AD increases. o Foreign incomes – when foreign economies are strong, they buy foreign goods. Therefore, X is greater. o Consumer tastes and preferences – when foreigners tastes and preferences are in favor of domestic goods X increases, therefore AD increases. o Exchange Rate – If the exchange rate of the home currency falls (rupee becomes weak) exports increase and so does the AD. Aggregate supply Aggregate supply is the total supply of final goods and services that firms in an economy plan on selling in a specific period, usually a year. Macroeconomic short run aggregate supply In stage one which is the initial stage we assume that the economy has been in a recession. Therefore, the aggregate demand is weak and so is the price level, up to GDPu. Hence the AS curve is nearly horizontal. In stage 2, AS approaches full unemployment and the price level rises due to increased aggregate demand and higher input cost. (Most of the time an economy operates in this stretch and hence the SRAS {Short run Aggregate supply} is commonly drawn with a positive slope) if the economy grows further and reaches the nations production capacity GDPc firms are left with no resources and no matter how high the price level, the real GDP does not expand, and the SRAS is nearly vertical. Macroeconomic Long Run Supply Curve (LRAS) Shifts in SRAS Factors affecting shifts in SRAS 1) Input prices /cost of production If COP (cost of production) falls the SRAS will increase 2) Tax policy If taxes are reduced or subsidy is given the SRAS will shift to the right 3) Deregulation If regulations are removed or lessened the SRAS shifts to the right 4) Political/ environmental reasons Wars, Natural disasters will shift the SRAS to the left Shifts in LRAS (Long run aggregate supply) The LRAS can shift if: 1) New natural resources are found. 2) Improvement in technology increases productivity. 3) Government policy incentives Different national policies such as unemployment doles produces the labor supply as then many prefer not to work. Similarly, if government gives tax incentives at greater investment, the LRAS will shift to the right. Fiscal Policy Fiscal Policy The policy of the government as regards taxation, public spending and borrowing, to achieve various objectives of economic policy is called fiscal policy Objectives of economic policy 1) Economic/price stability, 2) Full employment 3) Economic growth 4) Equity 5) Equilibrium in the balance of payment Expansionary fiscal policy When an economy is deflated and suffering a recession or depression the real GDP is low, unemployment is high the equilibrium between AD and AS is located near the horizontal part of the AS. To boost the economy the government has to boost the AD which is AD = C + I + G + (X-M). During a recession consumer demand C is low therefore investment demand I is also low. This is the cause of the recession to counter this the government reduces taxes (both direct and indirect), to boost the C and I. Besides that, government spending is increased. The net result of this moves would be an increase in AD from AD0 to AD1. Thereby, there is an increase in real GDP from GDP0 to GDP1. Contractionary fiscal policy. If an economy is operating at/beyond full employment and inflation is a problem government needs to contract the economy. The equilibrium between AD and AS is in the vertical section of the AS curve. To reduce the price level the government need to decrease AD. AD = C + I + G + (X-M). During inflation consumer demand and investment are very high. To counter this govt will raise taxes (direct and indirect) to reduce C and I. Government spending will be reduced. The net result of these moves brings about a fall in AD Deficits and surpluses A budget deficit exists when government spending is greater than government revenue in a given period of time. A budget surplus exists when government spending is less than government revenue in a given period of time. Modern welfare states invariably have a deficit budget. National Debt – this refers to the borrowing of the government during a deficit budget. It is meant to bridge the gap between expenditure and revenue. When deficits are an annual occurrence the national debt gets accumulated. It is therefore that more borrowing needs to be done to repay old debts. This is called a debt trap. Financing of deficits 1) Borrowing o From the public o From banks o From other financial institution § E.g., IMF o Countries of the rest of the world 2) Creating money Creation of new money is done to avoid high interest rates caused by borrowing however it’s disadvantage is the risk of inflation. Handling of Surplus during Contractionary Policy 1) The government can pay old debts 2) To retire bonds 3) To retain the money Idle surplus funds can be locked up and be stopped from recirculating Automatic stabilizers – an automatic stabilizer is an inbuilt mechanism that increases a budget deficit during a recessionary period and increases a budget surplus during an inflationary period, without any change made by the government. These mechanisms are inbuilt into the tax system which automatically regulate and stabilise the economy. Progressive taxes and transfers 1) When an economy is booming the GDP is increasing and more households and firms fall into higher tax brackets. A strong economy reduces the need for transfer payments such as unemployment doles, old age pensions etc The progressive tax system therefore has an automatic contractionary mechanism during a boom. 2) When an economy is in recession and the GDP is falling more households and firms fall into lower tax brackets A weak economy increases the need for transfer payments by way of welfare measures (unemployment dole, old age pension) this softens the recession and automatically leads to a bigger deficit. Therefore this tax system has an automatic inflationary mechanism. In the above diagram with the given level of government spending, net taxes rise or fall with GDP. They reduce the negative effects of a recession when the economy is weak and they reduce the negative effects of an inflation when the economy is unduly strong. Difficulties of fiscal policy Crowding out – if the government borrows funds to fuel an expansionary fiscal policy it will have an effect on the market of loanable funds. It decreases the supply of loanable funds to the private sector and leads to an increase in the interest rate. This reduces capital formation and investment by firms (private sector) and it thwarts national growth. When the interest rate increases firms and households are crowded out of the market of loanable funds. When the government is fighting inflation with a contractionary fiscal policy we see the opposite of crowding out. There is a budget surplus, the government returns debts, the supply of loanable funds increases and interest rates fall. This is referred to as crowding in. Net export effect – if the government is borrowing during an expansionary fiscal policy, the supply of loanable funds reduces, the interest rate rises and there is a crowding out effect. Private sector or private firms are unable to invest and produce, and this has a negative effect on the foreign exchange rate Economic growth and productivity Productivity and its possibilities are graphically represented through a production possibility frontier. The perimeter of the frontier shows the existing limit of production possibilities. If an economy is operating inside the frontier, there is underutilization of resources. Such is the case in developing economies or LDC’s (Less Developed Economies). For growth to happen in LDC’s, the point of productivity would move towards the frontier. If greater productivity is to be achieved beyond the frontier, it can happen in the following ways. - The quantity of economic resources should increase E.g., New minerals, oil and other resources may be discovered - The quality of the existing resources improves E.g., Human resources improve with better training - If the technology in a given economy improves Monetary Policy Fractional Reserve Banking and Money Creation Fractional reserve banking is a system in which only a fraction of the total money supply is held in reserve as currency. This is done to theoretically expand the economy. It allows the bank to keep only a portion of the consumer deposits while lending out the rest. Banks use customer deposits to create new loans. The process of fractional reserve banking expands the money supply of the economy but not without the risk which the bank may face by depositor withdrawals. This system increases the money supply by lending the money multiple times over and helps in economic development. The banks use customer deposits to make new loans and the reserves are held in balances at the central bank. Money creation – an example of how the fractional reserve system can multiply bank deposits into new created money. Illustration If the cash reserve ratio (CRR), then the reserve ratio(RR) = cash reserve/Total deposits = 0.1 Money multiplier: - M=1/RR If RR = 10% therefore M= 1/RR = 1/10% = 10 Central Bank Each country has one central bank. It is the apex financial authority of the country Functions: - The central bank regulates the economy, fixes interest rates and controls the supply of money. It is a bankers bank. It keeps the mandatory reserves of the commercial banks, it is a lender of the last resort to commercial banks, and it provides clearing house facility to the commercial banks in their role of money creation. It is the governments bank, it keeps governments money such as tax revenue, it gives loans to the government, it is the bank of issue, it is the governments agent and it keeps the governments reserves of gold, foreign currency etc. it controls the supply of money, e.g. during inflation it tries to reduce money supply and during recession it increases money supply . Expansionary monetary policy This occurs when the monetary authority uses its procedures to stimulate the economy. It is used to treat unemployment and recession and promote economic growth. In this case, the supply of money is enhanced to increase the aggregate demand. Contractionary monetary policy. Here the money supply is restricted to fight inflation. The AD during inflation is high and efforts are made to reduce the money supply due money tools. Quantitative measures of monetary policy / Quantitative tools Bank rate - this is the rate charged by the central bank to the commercial banks for short term loans. This is discounted and hence known as discount rate. During inflation, bank rate is raised. This reflects on the interest rate of commercial banks, increasing it. Due to a high interest rate, deposits increase and loans decrease thereby reducing money supply in circulation. This reduces AD and helps bring prices down. This is termed as contractionary monetary policy. During recession it is imperative in this case to increase AD. Bank rate is decreased this reflects on interest rate of commercial banks, decreasing it. Due to low interest rates, deposits decrease and loans increase, thereby increasing money supply in circulation. This increases AD and brings up prices. This is termed expansionary monetary policy. Credit Reserve Ratio(CRR): The central bank sets a minimum amount of reserve requirement to be held by commercial banks. The minimum reserve is determined by the central bank and no bank can keep less than this. This safeguards the deposits of the customers in commercial banks. During inflation the central bank raises CRR so that less money is given out by way of loans. This reduces the amount of money in circulation this reduces the AD During recession the central bank reduces CRR so that more money is given out by way of loans. This increases the amount of money in circulation and thus increases the AD. Open Market Operations : This is an activity by the central bank wherein it buys and sells securities or treasury bills on the open market in order to regulate the supply of money. During inflation, the central bank will sell securities or treasury bills on the open market in order to regulate the supply of money. This will reduce AD and help lower prices. During recession, the central bank will buy back securities on the open market and thereby increase the supply of money. This will increase AD and help increase prices. Quantitative measures/Tools of monetary policy : - these include customer credit and margin requirements. Coordination of Monetary and Fiscal Policy / A Monetary Fiscal Mix During Inflation Microeconomics Demand – Is the consumers desire as well as their willingness to pay a price for certain goods and services at a given period of time Law of demand – all other things being constant, when the price of a good rises, the quantity demanded for those good decreases. Quantity demanded and price have an inverse relationship. Demand Curve Note: - Demand curve is always sloping downwards from left to right. Determinants of demand (Non price factors affecting demand) - Tastes and preferences/Trends and Fashion - Income o Normal Goods: if income rises, demand for normal goods will rise o Inferior goods: if income rises demand for inferior goods will fall - Price of substitute goods E.g., Tea and coffee are substitutes. Price of tea has been fixed for a long time but there is still a fall in the demand for tea due to the decrease in the price of coffee since consumers shifted to consume coffee. - Price of complimentary goods Complimentary goods are jointly consumed e.g., bread and butter. The demand for butter falls if price of bread increases. - Future expectations of price If there is an expectation that price will rise in the future, qty demanded will rise today. - Number of buyers in the market/ population Demand curve shifts when there are changes in the determinants of demand. Rightward shift = Increase in Demand Leftward Shift = Decrease in Demand Market forces – demand and supply Supply Law of supply – if price increases, the qty supplied increases; vice versa. Price and supply have a positive correlation. Note: the supply curve is sloping upwards from left to right. Determinants of supply - Cost of production: if the cost of production increases, then the supplier will be demotivated to produce/supply more as the profit reduces for the supplier. Therefore, the supply curve will shift to the left. - Technology and productivity: with technological improvement the productivity increases and the cost per unit might also fall. Hence profit will increase, and the supplier would like to sell more. Therefore, the supply curve will shift right. - Taxes: tax is an amount charged by the government when a particular product is sold/produced. When the tax increases. The profits reduce for the supplier due to which the supply will decrease, and the supply curve will shift to the left. - Subsidy: subsidy is an amount of aid or gift given by the government to the suppliers to help increase the productivity or to boost a particular sector of the economy. Subsidy reduces the cost of production, which motivates the supplier to supply more, hence the supply curve shifts to the right. - Price expectations: if the supplier expects the price to rise in the near future, the qty supplied today would fall, vice versa. - Number of suppliers: when more suppliers enter a market, we expect the supply curve to shift to the right. For e.g. During the strawberry season, many farmers try to grow strawberries in their free farmlands and hence supply of strawberries increases. Market Price - Over Supply – Supply>Demand – Price will Decrease - Shortage – Demand>Supply – Price will Increase Market equilibrium is the point at which demand, and supply curves meet. It is at that point at which price is set and that amount of a good is supplied and demanded. It is the point at which supply and demand of a good are equal at a fixed price level. Welfare Analysis Society is typically made up by consumers and producers. Hence in any particular free market when the demand meets the supply there is equilibrium. At equilibrium there is no wastage of resources, and the total welfare is maximized, which means all the producers and the consumers are happy with the situation. Free market – no government intervention – no taxes, no minimum wage etc. Total Welfare/Total Surplus – It is the sum of consumer surplus and producer’s surplus. Consumer Surplus – the situation in which the consumer benefits by getting the desired quantity of goods or services at the expected price or even lower. E.g., the consumer is willing to pay 5 dollars for an apple, but he gets it at 3 dollars then the consumers surplus is 2 dollars Producer Surplus – the situation in which the producer benefits by selling the desired quantity of goods or services at his expected price or even higher. E.g., the producer is willing to sell an apple for 5 dollars, but he gets 8 dollars then the producer’s surplus is 3 dollars. Consumers choice Utility It is the benefit or the satisfaction that the consumers experience by consuming goods and service. Total Utility It is the total amount of benefit or satisfaction received from the consumption of certain amount of a good or services. Marginal Utility It is the benefit or satisfaction received by consuming one extra unit of a particular good or service. e.g., If a person goes from 0 to 1 glass of water, his happiness increases from 0 to 10 points. Similarly, when he drinks 1 more glass of water the additional utility is 8 points. Diminishing Marginal Utility: in the table above, we can see a relationship between total utility and marginal utility. We can see that total utility increases but at a slower rate, and marginal utility keeps falling. Hence the law of diminishing marginal utility tells us that in a given period of time the marginal utility by consuming 1 extra unit falls (total utility increases at a decreasing rate). Constrained Utility Maximization With a fixed daily income and a price attached to consuming each additional unit is a constraint to our consumption pattern. So, we must ask aur self if one additional bottle of water costs me $1, then is it with the additional utility of 8 points. If the answer is yes, then you will consume the additional water bottle. If no, then do not consume it. Consumers are constrained by two things, price, and fixed income. One will keep consuming apples until a point when the utility of the last apple consumed is equal to the price I pay for that apple. Most consumers allocate limited income between many goods and services, each with a price that must be payed. Conclusion In this project, I conducted a comprehensive examination of the intricate relationship between economics and finance. The analysis encompassed macroeconomic theories, including the foundational contributions of John Maynard Keynes, emphasizing the essential role of government intervention in economic cycles. Key concepts such as the consumption function, propensity to consume, and the multiplier effect were explored, shedding light on their impact on aggregate demand. Beyond macroeconomics, the project delved into the complexities of aggregate demand and supply, scrutinizing their determinants and the factors influencing their shifts. A detailed exploration of fiscal policy, covering both expansionary and contractionary measures, provided insights into the government's pivotal role in shaping economic outcomes, including the management of budget deficits, surpluses, and the national debt. Shifting focus to monetary policy, the project elucidated fractional reserve banking, money creation, and the quantitative tools employed by central banks. The coordination of monetary and fiscal policies, known as a monetary-fiscal mix, was analyzed in the context of effectively managing inflationary and recessionary gaps. Within the microeconomic realm, fundamental principles such as the law of demand and supply, market equilibrium, and welfare analysis were explored. The study of utility maximization theories deepened our understanding of individual consumer choices within the broader economic landscape, especially when faced with constrained decision-making due to limited resources. Moreover, this project took a holistic approach by addressing critical dimensions of risk management and corporate governance. By emphasizing their significance, it underscored the pivotal role these elements play in maintaining financial stability and fostering ethical business practices. In synthesizing these diverse elements, this research contributes not only to a nuanced understanding of economic systems and policies but also highlights the imperative of prudent financial management and responsible corporate governance in navigating the complexities of the contemporary economic landscape. Previous Next

To contribute to education in a young India, great visionaries and philanthropists: Pandit Madan Mohan Malviyaji, Shri Jamnalal Bajaj and Shri Anandilal Podar came together to establish the Anandilal Podar Trust in 1921. Acerca de About Anandilal Podar Trust In 1921, Mahatma Gandhi, the Father of the Nation called on the nation to donate Rs. 1 Crore to the ‘Tilak Swaraj Fund’ - to help liberate India. Due to British oppression, there was considerable apprehension to make donations. It was then Shri Jamnalal Bajaj approached Shri Anandilal Podar, a noble-hearted businessman, to help drive the initiative. Shri Anandilal Podar readily donated Rs. 2,01,00 to the fund and this formed the foundation for the Trust. To contribute to education in a young India, great visionaries and philanthropists: Pandit Madan Mohan Malviyaji, Shri Jamnalal Bajaj and Shri Anandilal Podar came together to establish the Anandilal Podar Trust in 1921. It is of utmost pride that Mahatma Gandhiji himself, was the Chairman Trustee of the trust. Anandilal Podar Trust is honoured to be the only private trusteeship that Bapuji ever accepted during his life dedicated to Independent India. Following in this noble vision, the Trust has been committed to giving back and providing quality education to learners in rural and urban areas across the nation. The Trust has established over 37 charitable schools, colleges, management institutes, hospitals, vocational training centres across India - including the first Institute of Management in Rajasthan, bearing the Podar name. Currently, over 30,000 students are studying in these institutions as the Anandilal Podar Trust continues growing to enrich more lives and contribute to lifelong learning. 35+ Institutions 20,000+ Skilled 2,00,000+ Educated