Budget for Healthcare 2021 in India

How do you think COVID has changed the diagnostics space and healthcare segment?

COVID-19 pandemic placed unparalleled challenges on modern healthcare systems and became a catalyst for change – a defining moment for all of us in healthcare to re-imagine the future of healthcare. 

In the past few months, the healthcare industry has vividly demonstrated its resilience, agility and ability to bring innovations to market quickly. It won’t be wrong to say that we’ve made a decade of progress in just a few months. 

Healthcare industry which is usually the last to adopt digital interventions was the first to make use of tele-health services in preventing, diagnosing, treating, and controlling diseases during COVID-19 outbreak. As we have seen the crisis unfold; healthcare has been delivered at locations previously reserved for other uses. Schools, hotels and dormitories have become hospitals. There are mobile vans for sample collection and make-shift centres in parking lots for testing. 

Many countries including India built thousands of intensive care unit (ICU) beds in just a few weeks, vaccine trials started months sooner than they normally would, millions of healthcare workers risked their lives to care for critically ill patients. 

It’s been truly inspiring to witness this transformation. And although we’re far from out of the crisis, our industry has made tremendous progress in these months that is now reshaping healthcare delivery across the spectrum.

During the crisis, even medical diagnostics emerged as the first line of disease containment and the most critical public health measure implemented at an unprecedented scale in human history. WHO’s T3: Test. Treat. Track initiative to prevent the spread of COVID has put diagnostics in the spotlight and highlighted an increasing requirement for better testing capabilities and importance of quality. People have started to understand molecular/ genetic testing and hence this has resulted in the increase of investments, by large private labs like SRL, to set up more RT PCR labs across the length and breadth of the country.

The ongoing crisis has also reinstated the fact that the healthcare and diagnostics sector can reap out great benefits for a country like India. Our country can very well be turned into the ‘Laboratory of the World’ with the government joining hands with the private sector, by redirecting its focus on life science, healthcare and diagnostics. The future of healthcare will be shaped by innovative and modifying care delivery models for integrated and value-based care.

How has the role of the diagnostics sector evolved over the years? Moving ahead, which are the segments that have promise?

70% of decisions that medical experts take on patient treatment depends on diagnostics tests, but at the same time, the diagnostics industry in India accounts for only 5% of the total health system costs. 

However, with the Covid pandemic, the segment is coming out in front and has probably opened up both awareness of tests using RT-PCR technology and also expanded the availability and capacity across the country. The consumer is going through an attitudinal shift towards understanding their immunity better and a preventive approach. At a larger level, with growing awareness amongst consumer, large chains are working towards improving their accessibility across geographies, ensuring the highest level of tests being available through the hub and spoke model.

There has been a drastic shift in consumer preference for the digital and growing demand for online booking, thereby bringing diagnostics to home. We have witnessed a 60-70% growth in this segment as Home collection has become the preferred mode for tier 1 cities, post the pandemic, and we foresee this to continue even post-COVID. The recent pandemic has increased both the awareness of RT-PCR technology and the capacity across the country. While routine blood tests will remain the mainstay of the overall industry, there is a definitive trend towards genetic testing.

In the tissue diagnostics space, digital pathology is the next biggest revolution in the making and we are continually evolving and investing in AI and technology. With an AI system, subjectivity to screening digital pathology slides can be reduced and linked to the Big Data system to explore references to similar cases reported in any part of the world. Hence, in continuation with our transformative efforts in the field of Artificial Intelligence in Pathology, we launched the second phase of our AI solution development engagement. 

While the phase 1 focused on AI models in Cytology and yielded an algorithm for screening of liquid-based cytology slides for Cervical Cancer, the second phase will delve into AI models in Histopathology, majorly focusing on Breast, Colorectal, and Prostate Cancers. As a part of this engagement, our senior Histopathologists will not only lead and set processes for the AI algorithm development but will also provide research insights required for the digitalization of pathology in India. This is truly one the ‘Firsts’ in our industry and SRL is the pioneer in the category.

What are the digital trends being witnessed by the sector and how is SRL driving the change in it?

Diagnostics is the first step to disease management and is like the motor that drives healthcare to understand diseases. While it does the job via the same methods as it did for the last 100 years, the times are changing. 

Slowly but surely, diagnostics is going digital. Digital technologies are pushing the field into becoming more efficient and more scalable. 

Digitalization in diagnostics is also transforming the job of pathologists into a more creative and data-driven one while it is allowing patients to receive diagnoses faster and with higher accuracy. 

The pandemic had also made this sector realize the need for employee safety. While patient safety is of utmost importance to us, employee safety is equally important. Hence, going forward we would like our pathologists, oncologists, and technicians to have an option to work from home and hence we have established Digital Pathology labs within our reference laboratories in Gurgaon, Mumbai and Bangalore. These Digital Pathology labs will allow technicians and lab doctors to read images remotely and enabling real-time virtual collaboration between their multi-disciplinary care teams. Remote reviewing of pathological cases is also essential to prevent delay in critical patient diagnosis and care, particularly during a crisis and our work with Microsoft will also pave the way to this transformation.

The other shift that we have witnessed is the shift in customer preferences. More and more people are now opting to book online tests, home collection and telehealth is the new mode of diagnosis. There has been a 70% growth in this segment as Home collection has become the preferred mode for tier 1 cities, post the pandemic, and will foresee this to continue even post-COVID.

With the growing relevance of connected devices, IoT and wearable, a new era of self-monitoring has been ushered in. Through equipment, now available at home, and AI technologies, the role of diagnosis can be enhanced and changed drastically. The sum of this shift amount to a highly-informed customer base that is aware of their healthcare needs. 

As the nation underwent a lockdown in mid-march, the diagnostic industry has faced multiple changes and developments. 

The industry faced a massive decline in the B2C business as the footfall of walk-ins fell drastically and combined with restrictions on elective and OPD services at hospitals and clinic, B2B business were majorly affected in Q1 as well. 

However, we gained momentum in Q2 and were able to reach our pre-Covid numbers for our non-Covid business in October. 90% of our business has been recovered and with our current strategy focused on expansion, we plan to recover our growth in the coming quarters. We are optimistic that our FY 20-21 revenues will be similar to last year, and FY 21-22 will not be impacted by the COVID crisis.

We in a way knew this was coming but as things were constantly unfolding, even the diagnostics industry faced shrinkage of manpower as healthcare workers were affected, quarantined or terrified to work and essential supply chains were disrupted due to the lockdown. As the situation was developing and more understood, protocols on testing strategy, process and pricing kept evolving and changing. While these proved a challenge, the future diagnostics players should take learnings from the situation as they plan ahead.

For future laboratories to deliver on quality care, joining forces in healthcare networks and collaborating with other healthcare providers would be the key, in order to fulfil their role as a care partner in a patient’s health journey. The ‘Diagnostics of the Future’ is envisioned to be built on smarter, safer and sustainable lab setups which will be driven by design thinking and smart technology to meet the most pressing challenges. 

To provide personalized care, the laboratories would need to find newer ways to tackle changing demand for healthcare services, adopt smart integration technologies, data science and analytics. In the coming future, Clinical Lab 2.0, fueled by the pandemic, will redefine the role of diagnostics in the care continuum, aligning with value-based healthcare. For laboratories to take on their future role, another vital aspect will be to focus on their healthcare workers’ well-being and investments on training and development of human capital.

The current situation has presented business leaders with an opportunity to align themselves with a more sophisticated and flexible use of technology and a time to re-strategize and re-engineer their business model. To thrive in the future, the diagnostics players will have to balance their short-term needs with longer-term planning considerations and build the acquired resilience early.

According to you what are the segments where the government should invest to ensure accessibility of healthcare to everyone on the go? What more can India do to boost its diagnostics landscape?

India has been on a digital-first trajectory for a few years, and with the country moving towards strengthening their response to the pandemic, a drastic shift has been seen in the use of apps and digital tool for healthcare and essential purposes. The Indian digital healthcare market was valued at INR 116.61 Bn in 2018 and is estimated to reach INR 485.43 Bn by 2024. And India’s goal of becoming a trillion-dollar digital economy by 2025 is going to further open new possibilities in technology powered development of the healthcare sector. The National Digital Health Mission is an essential step by the Central government in the same direction which will make healthcare services more flexible, accessible and affordable to masses and can help make healthcare on the go a reality. While the government is increasingly taking steps to encourage healthcare start-ups, more financial support is needed to develop innovations and tools that can enable the easy interface and affordable doctor-patient consultations; connecting doctors, patients, pharmacies and diagnostic clinics.

In diagnostics space, advancements in specific technologies such as computerization, digital imaging, multiple fibre-optic communications, and robotic light microscopy are expected to drive future market growth in digital pathology. In the future, we will also see an increase in the integration of artificial intelligence (AI) into digital pathology. Most current researchers are focusing on developing AI to improve the software used in digital pathology. SRL is already working closely with Microsoft to develop algorithms that would provide tools to pathologists for faster and more accurate diagnoses of diseases such as cancer, remotely. This is especially useful in remote areas as you can get the data to the doctor in no time. This ability to serve remote areas is one of the biggest problems in healthcare. While the national government has multiplied its investment in Digital India mission in 2020 to support progress in AI, machine learning and 3-D printing, the government should look at investing more in these emerging technologies specifically for the Healthcare sector.

The pandemic in the country led to various innovations and techniques with an aim of accessibility to the people across India. These innovations can now be leveraged to provide on the go healthcare services, especially in rural and Tier 3, 4 and 5 towns of India. One such way is Mobile Units, which can be fitted with ECG, ultrasounds and various other elements and can be made accessible to smaller towns and cities, which face a challenge of infrastructure and human resources. Such units were also used for COVID sample collection across the country. Buses were transformed into mobile units enabling the safe collection of samples. Although slowly, the country is moving towards building a stronger healthcare system and owing to pandemic numerous avenues and opportunity has been opened for India to take point on.

Another such opportunity would be to look at getting more and more people under health insurance so that out of pocket expenses are reduced. Despite the testing cost in India valued at 1/5th of the cost of the USA, a significant number of middle and lower-income families cannot afford them in India. Schemes like Ayushman Bharat when combined with diagnostics can present a great opportunity for the segment and the poorer patients in the country. This has the potential to provide individuals access to diagnostic services with a simple Ayushman ID. If diagnostics tests and OPD coverage can be covered under medical insurance for paying patients and by government schemes like PM-JAY for weaker sections of the society, the healthcare segment can be made stronger and more integrated.

Union Budget 2021 expectations for healthcare?

While the healthcare segment has been a key focus area and part of country’s development plan through various comprehensive initiatives including Swachh Bharat, Ayushman Bharat, Skill India, National Digital Health Mission and now ‘Mission Covid Suraksha, the long-term response to the pandemic needs a significant part of budget allocation. The healthcare policies need to take into account the entire value chain of healthcare – prevention of diseases, treatment and health insurance. It is vital to connect all three to achieve the goal of universal health coverage.

We have also witnessed how during Covid India’s middle class was worst hit by the pandemic followed by the upper middle classes. Hence, the government should work towards getting more and more people under health insurance so that out of pocket expenses are reduced. Although the cost of testing in India is valued at 1/5th compared to the USA, a large number of middle and lower-income families cannot afford them in India. Combining diagnostics with schemes like Ayushman Bharat will have potential to provide individuals with access to diagnostics services with ease. It is time for the government to open up micro-insurance and ailment-focused schemes that are innovative and viable for lower & middle income groups.

The pandemic has reinstated the fact that, the government needs significant investments in funding researches on infectious diseases and strengthening the capabilities of institutions like the National Institute of Epidemiology in Chennai, the National Centre for Disease Control in New Delhi, the Centre for Infectious Disease Research in Bengaluru, and the National Institute of Virology in Pune. Avian flu, SARS , MERS, Ebola, Nipah, etc, are a clear example of the warning signals that the governments worldwide have ignored this segment for a long time, and now with bacterial infections becoming increasingly resistant to antibiotics, common infections can potentially become life-threatening in the future. To achieve this, it will be pivotal for the government to join hands with the private sector, while redirecting their focus on life science, healthcare and diagnostics. Public-private partnerships can play a very significant role in capturing greater space in the health sector.

What is your outlook for the year 2021? How do you envisage it?

In the last few months, the healthcare sector has been undergoing a constant wave of transformation. From shifts in care settings to heightened expectations for stronger cost management and better consumer experience, healthcare providers like SRL have been nimble and adaptive to the changing scenarios. Going forward, in my view, businesses that can make bold moves in response to the market transformations and collaborate with other healthcare providers to play a vital role as a care partner in a patient’s journey are going to be profitable and successful.

In the wake of COVID-19, the initial scramble to shutdown OPD and elective surgeries and switch to a predominantly remote care model is now giving way to a more measured assessment of healthcare needs of the population, evaluation of the care delivery models using telehealth technologies as enablers, and a long-term survival strategy for hospitals and health systems. The change in consumer mindset also gave way to the increasing demand for home visits vis-à-vis lab walk-ins. And it is expected that the healthcare sector, in general, will further embrace technology and automation to better leverage growth.
Besides, in 2021 we will continue to utilize our people and technological resources to withstand our leadership in the Reference laboratory segment with a focus on Next Generation Diagnostics. The current clinical practices are going to be impacted by the groundbreaking genomic testing, which is triggering a revolution to start a period where the medicine is preventive, personalized, predictive and participatory, and rooted in the human genome project. We will continue to work towards making our market share stronger across geographies that we operate in by way of consolidating organic growth and constantly evaluating inorganic growth opportunities.

Merger

What is a Merger?

A merger is a corporate strategy to combine with another company and operate as a single legal entity. The companies agreeing to mergers are typically equal in terms of size and scale of operations.

Summary

• Companies seek mergers to gain access to a larger market and customer base, reduce competition, and achieve economies of scale.
• There are different types of mergers that the companies can follow, depending on their objectives and strategies.
• A merger is different from an acquisition. Mergers happen when two or more companies combine to form a new entity, whereas an acquisition is the takeover of a company by another company.

Why do Mergers Happen?

• After the merger, companies will secure more resources and the scale of operations will increase.
• Companies may undergo a merger to benefit their shareholders. The existing shareholders of the original organizations receive shares in the new company after the merger.
• Companies may agree for a merger to enter new markets or diversify their offering of products and services, consequently increasing profits.
• Mergers also take place when companies want to acquire assets that would take time to develop internally.
• To lower the tax liability, a company generating substantial taxable income may look to merge with a company with significant tax loss carry forward.
• A merger between companies will eliminate competition among them, thus reducing the advertising price of the products. In addition, the reduction in prices will benefit customers and eventually increase sales.
• Mergers may result in better planning and utilization of financial resources.

 

Types of Merger

 

1. Congeneric/Product extension merger

Such mergers happen between companies operating in the same market. The merger results in the addition of a new product to the existing product line of one company. As a result of the union, companies can access a larger customer base and increase their market share.

 

2. Conglomerate merger

Conglomerate merger is a union of companies operating in unrelated activities. The union will take place only if it increases the wealth of the shareholders.

 

3. Market extension merger

Companies operating in different markets, but selling the same products, combine in order to access a larger market and larger customer base.

 

4. Horizontal merger

Companies operating in markets with fewer such businesses merge to gain a larger market. A horizontal merger is a type of consolidation of companies selling similar products or services. It results in the elimination of competition; hence, economies of scale can be achieved.

 

5. Vertical merger

A vertical merger occurs when companies operating in the same industry, but at different levels in the supply chain, merge. Such mergers happen to increase synergies, supply chain control, and efficiency.

 

Advantages of a Merger

 

1. Increases market share

When companies merge, the new company gains a larger market share and gets ahead in the competition.

 

2. Reduces the cost of operations

Companies can achieve economies of scale, such as bulk buying of raw materials, which can result in cost reductions. The investments on assets are now spread out over a larger output, which leads to technical economies.

 

3. Avoids replication

Some companies producing similar products may merge to avoid duplication and eliminate competition. It also results in reduced prices for the customers.

 

4. Expands business into new geographic areas

A company seeking to expand its business in a certain geographical area may merge with another similar company operating in the same area to get the business started.

 

5. Prevents closure of an unprofitable business

Mergers can save a company from going bankrupt and also save many jobs.

 

Disadvantages of a Merger

 

1. Raises prices of products or services

A merger results in reduced competition and a larger market share. Thus, the new company can gain a monopoly and increase the prices of its products or services.

 

2. Creates gaps in communication

The companies that have agreed to merge may have different cultures. It may result in a gap in communication and affect the performance of the employees.

 

3. Creates unemployment

In an aggressive merger, a company may opt to eliminate the underperforming assets of the other company. It may result in employees losing their jobs.

 

4. Prevents economies of scale

In cases where there is little in common between the companies, it may be difficult to gain synergies. Also, a bigger company may be unable to motivate employees and achieve the same degree of control. Thus, the new company may not be able to achieve economies of scale.

New technological behaviours will outlast the pandemic

Italian grannies have discovered online shopping

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Nov 16th 2020

BY TOM STANDAGE: EDITOR, THE WORLD IN 2021

WELCOME TO THE future—not 2021, as you might have been expecting, but 2025, or even 2030, depending on whom you ask. The adoption of new technological behaviours in response to the pandemic, from video-conferencing to online shopping, means usage has already reached levels that were not expected for many more years.

“Recent data show that we have vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks,” declared McKinsey, a consultancy, in May 2020. And for online shopping in America, progress was even more rapid: “ten years’ growth in three months”. 

Netcomm, an Italian retail consortium, says shopping in that country, a laggard in e-commerce, has witnessed a “ten-year evolutionary leap” towards digital. 

In banking, experts canvassed by The Economist reckon that the share of cashless transactions worldwide has jumped to levels they had expected to see in two to five years’ time. In medicine, a British doctor told the New York Times that the National Health Service had undergone a decade of change within a week, as doctors switched to remote consultations.

Call it tech-celeration. In all these cases, and in many others, the pandemic has accelerated existing trends of technological adoption. Shopping was steadily moving online; payments were slowly going digital; online learning was slowly becoming more prevalent; more people were working from home, at least some of the time. Now people in many countries have been abruptly propelled into a future where all of these behaviours are far more widespread.

This sudden shift has been painful. Many bricks-and-mortar retailers, already in difficulty, have been forced into bankruptcy, including household names such as J.C. Penney and Neiman Marcus. With bank branches closed, elderly people unfamiliar with online banking have been targeted by scammers. The switch to online learning highlighted inequality in broadband access and computer ownership among students.

But the transition has also sparked rapid transformation in fields, notably health and education, that are historically resistant to change. The enforced experiment of mass lockdowns has also destigmatised online learning and remote working, by demonstrating that with the right equipment and support, they really can work at scale. That is good news.

The big question for 2021 is: how much will things snap back? Clearly the world is not going to return to its pre-pandemic state. Many department stores have closed. Italian grannies have discovered the joys of online shopping. Home-workers are in no rush to return to commuting five days a week. But nor will all the lockdown behaviours of 2020 persist. Students and teachers are keen to return to in-person tuition. Workers miss the camaraderie of the office. So some new behaviours will stick, but not all, and the result will be somewhere in the middle. Exactly where will have enormous implications: for transport patterns, property prices and the layout of cities, among other things.

McKinsey reports that, by 2022, 15% of executives who took part in an international poll expect to allow a tenth of their employees to work remotely for two or more days a week, and 7% were willing to stretch this to three days a week. But those global averages conceal wide variations. In Britain and Germany, 20% of respondents were happy for at least one in ten workers to work remotely two or more days a week; in China, the figure was just 4%. And among technology executives the proportion stood at 34%, up from 22% before the pandemic. Companies in technology and financial services can function more easily without workers on site. But even in industries where fully remote working is possible, the most likely outcome is a hybrid future that mixes remote and in-person working.

The future is now
Some firms—like those that provide services in the cloud, or devices that support remote working—will get stronger. Others, like bricks-and-mortar retailers, will suffer. Many will fail altogether. But once again there is a silver lining, as these changes open up new arenas for innovation. Already companies big and small are devising fresh tools to improve the experience of remote working, collaboration and learning; to support new kinds of contactless and appointment-based retailing; and to provide new sorts of online social experiences, from virtual conferences to virtual tourism. There is no going back to the past that existed before the pandemic. Instead, covid-19 has propelled the world into a very different future.

Tom Standage: editor, The World in 2021 ■

The World in 2021
Covid-19 is up-ending capitalism

RECESSIONS ARE capitalism’s sorting mechanism. Weak businesses shrink or fail and stronger ones expand. But in 2020 the process of creative destruction did not take place in the typical manner. Because the downturn was the result of a health crisis rather than, say, a financial crash or inflation scare, there were some idiosyncratic corporate winners and losers: think of the boom in video streaming, or cruise-liner firms being wrecked. Meanwhile vast state handouts propped up companies around the world, masking the scale of the corporate carnage. In 2021 the toll will become clearer as stimulus tapers down and more firms fail. 

Healthy businesses will ramp up investment, giving them an enduring advantage. These top dogs will, however, face a new climate in which three tenets of modern business—the primacy of shareholders, globalisation and limited government—are in flux.

Downturns tend to be infrequent and swift: since the second world war America has been in recession only 14% of the time. But they have a profound impact on the structure of business. During the previous three slumps the share prices of American firms in the top quartile of each of ten sectors rose by 6% on average, while those in the bottom quartile fell by 44%.

This time there have been some obvious winners. Silicon Valley’s prospects have soared as users have switched to digital services (see article). China Inc has had another great leap forward. Its domestic economy has outperformed most other countries’ and a wave of initial public offerings, including the fizzy flotation of Nongfu Spring, a bottled water colossus, has highlighted the strength and depth of Chinese firms. Their share of world stockmarket value (including Hong Kong) is now 17%, up from 15% before the pandemic and 13% a decade ago.

Winners and losers
Some success stories have been more unexpected. 

The Poonawalla family in India, who until recently were as well known for their stud farms as for their vaccine business, have seen their fortune rise by 62% to $14bn, according to Bloomberg. 

The container-shipping industry has spent years merging into a more efficient structure: the effort has paid off, with Maersk, the largest firm, predicting solid profits in 2020 despite a slump in trade. 

SoftBank, a Japanese conglomerate known for its wild tech bets and huge debts, has turned a crisis into an opportunity by announcing $80bn of asset sales. 

Gold-mining companies, long viewed as dead money, are back in fashion because some investors think huge government stimulus will lead to a bout of inflation in which bullion is one of the few assets to hold its worth.

What about the losers? Judged by the bottom line, business is in worse shape than in the subprime crisis: in the first half of 2020 more than 40% of America’s top 3,000 listed firms made losses, compared with just over a third in 2009. But default rates in America remained low, with only about 5% of junk bonds in default and about 4% of business credit cards in arrears.

In 2021 this unreal world won’t last. Governments will reduce new aid and pivot away from keeping individual firms alive and towards making sure workers have help if they lose their jobs. The gap between companies will also widen because stronger ones will maintain investment as others cut back. By mid-2020, capital spending at the ten highest-spending listed American firms was still 3% higher than a year earlier, but had dropped by 82% at the smallest 1,000 firms.

The corporate winners from the slump of 2020-21 will tend to be big firms that benefit from technological disruption and have exposure to better-performing economies, notably in Asia and America. Yet they face a tricky post-pandemic environment as the rules of the game between business and society are recast.

Firms will be under pressure to pay less attention to shareholders and more to workers. The pace of global buybacks almost halved in mid-2020 and won’t bounce back fully even as profits recover. 

The stagnation of globalisation means that more multinationals will have to operate as federations of national businesses and will be unable to reap the full efficiency gains from being run as a single globally integrated organisation. And as the size of government expands everywhere, the levels of regulation and taxes will inevitably rise. For the top 3,000 global firms the median effective tax rate paid has dropped from 33% two decades ago to just 22% now; the only way is up. At the end of this recession the world of business will have been shaken up—and so will the rules of capitalism.

Patrick Foulis: business affairs editor, The Economist ■

Copyright © The Economist Newspaper Limited 2020. All rights reserved.

The World in 2021
Ten trends to watch in the coming year

A letter from Tom Standage, editor of “The World in 2021”

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Nov 16th 2020

DO YOU FEEL lucky? The number 21 is connected with luck, risk, taking chances and rolling the dice. It’s the number of spots on a standard die, and the number of shillings in a guinea, the currency of wagers and horse-racing. It’s the minimum age at which you can enter a casino in America, and the name of a family of card games, including blackjack, that are popular with gamblers.

All of which seems strangely appropriate for a year of unusual uncertainty. The great prize on offer is the chance of bringing the coronavirus pandemic under control. But in the meantime risks abound, to health, economic vitality and social stability. As 2021 approaches, here are ten trends to watch in the year ahead.

1 Fights over vaccines. As the first vaccines become available in quantity, the focus will shift from the heroic effort of developing them to the equally daunting task of distributing them. Vaccine diplomacy will accompany fights within and between countries over who should get them and when. A wild card: how many people will refuse a vaccine when offered? 

2 A mixed economic recovery. As economies bounce back from the pandemic the recovery will be patchy, as local outbreaks and clampdowns come and go—and governments pivot from keeping companies on life-support to helping workers who have lost their jobs. The gap between strong and weak firms will widen. See article

3 Patching up the new world disorder. How much will Joe Biden, newly installed in the White House, be able to patch up a crumbling rules-based international order? The Paris climate treaty and the Iran nuclear deal are obvious places to start. But the crumbling predates Donald Trump, and will outlast his presidency. See article

4 More US-China tensions. Don’t expect Mr Biden to call off the trade war with China. Instead, he will want to mend relationships with allies to wage it more effectively. Many countries from Africa to South-East Asia are doing their best to avoiding picking sides as the tension rises. See article

5 Companies on the front line. Another front for the US-China conflict is companies, and not just the obvious examples of Huawei and TikTok, as business becomes even more of a geopolitical battlefield. As well as pressure from above, bosses also face pressure from below, as employees and customers demand that they take stands on climate change and social justice, where politicians have done too little. See article

6 After the tech-celeration. In 2020 the pandemic accelerated the adoption of many technological behaviours, from video-conferencing and online shopping to remote working and distance learning. In 2021 the extent to which these changes will stick, or snap back, will become clearer. See article

7 A less footloose world. Tourism will shrink and change shape, with more emphasis on domestic travel. Airlines, hotel chains and aircraft manufacturers will struggle, as will universities that rely heavily on foreign students. Cultural exchange will suffer, too. See article

8 An opportunity on climate change. One silver lining amid the crisis is the chance to take action on climate change, as governments invest in green recovery plans to create jobs and cut emissions. How ambitious will countries’ reduction pledges be at the UN climate conference, delayed from 2020? See article

9 The year of déjà vu. That is just one example of how the coming year may feel, in many respects, like a second take on 2020, as events including the Olympics, the Dubai Expo and many other political, sporting and commercial gatherings do their best to open a year later than planned. Not all will succeed. See article

10 A wake-up call for other risks. Academics and analysts, many of whom have warned of the danger of a pandemic for years, will try to exploit a narrow window of opportunity to get policymakers to take other neglected risks, such as antibiotic resistance and nuclear terrorism, more seriously. Wish them luck. See article

The coming year promises to be particularly unpredictable, given the interactions between the pandemic, an uneven economic recovery and fractious geopolitics. This annual will, we hope, help you improve your odds as you navigate the risks and opportunities ahead.

And it’s not all doom and gloom. Our special section, “Aftershocks”, considers some of the lessons, and chances for positive change, that have emerged from the crisis. So let the dice fly high—and, whatever cards 2021 may end up dealing you, may the odds be ever in your favour.

Tom Standage: Editor, The World in 2021■

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Optimizing Indonesia’s dual engine of economic growth

Coordinating Economic Minister Airlangga Hartarto has predicted that the Indonesian economy will contract by 0.49 percent this year as a result of the health crisis.

Before the pandemic affected the Indonesian economy in the second quarter of 2020, the quality of its economic growth was evident. An indicator such as open unemployment decreased, showing that Indonesia's actual economic growth was higher than its minimum economic growth to create jobs. At the time, Indonesia's inflation rate was showing market optimism, with actual inflation higher than the expected inflation. 

Besides, both indicators of income inequality and poverty rates were also declining. Public policy-wise, in addition to its large investments in infrastructure, Indonesia's focus has been on the endogenous factor, its human capital. Indonesia acknowledged that investing in human capital through education and health policies is key to development. It acknowledged that the economic transformation it is creating would not proceed optimally without developing human capital.  

Nevertheless, in early 2020, a global virus outbreak turned strong economic performances upside down, including in Indonesia. The pandemic put the endogenous growth of development and human capita at very high risk. According to Statistics Indonesia’s (BPS) latest macroeconomic data released on Nov. 5, the Indonesian economy did better in this third quarter than in the second. This reflects the significant government efforts to speed up budget spending to cushion the pandemic's impact on the economy. Besides, it also shows Indonesia’s economic resilience and agility. 

The first is because the growth of major sources of the manufacturing sector, household spending, and Java Island in the third quarter improved over the second quarter. The latter because the total economic growth remains better than those of major sources of economic growth. 

Indonesia's minor economic growth sources have been experiencing product diversification to compensate for its major economic growth sources. There is dual-engine economic growth in all countries, including Indonesia, which any country can optimize as we head for 2021. 

The first engines is consumer spending and government expenditure, while the second engine is investment and net export. To keep its saving rate, both engines work concurrently. If the first engine accelerates, then the second engine needs to be accelerating too.  In Indonesia's first engine of growth, consumer spending plays a major role.

 

Its contribution to the Indonesian economy is around 59 percent of the gross domestic product (GDP). Household spending of basic needs is also the core of Indonesia's aggregate demand. The pandemic has decreased aggregate demand as seen in the consistent decline of the inflation rate from 2.96 percent in March to 1.42 percent in September 2020. 

Therefore, the key to jump-starting the economy lies in the effectiveness of stimulating essential consumer spending. This is affected by two factors: first, the containment of the pandemic and second, the marketability to cure itself using the help of the digital economy. The latter has helped sustain economic activities amid curbs to public activity. From its second engine of growth, Indonesia, as a developing country, has a current account deficit due to its saving-investment gap. This gap is covered by both the short-run derivative and long-run direct investments. During the increasing global prices of primary products in 2008-2011, Indonesia had a current account surplus. Yet, as international commodity prices declined, Indonesia returned to a current account deficit. 

An essential factor in optimizing the second engine is to connect investment with net exports. To achieve this, Indonesia needs to improve its competitiveness and intensively connect its manufacturing and service sector networks to global value chains. My investment and net export model entitled V-Composite Index shows that the Indonesian economy is mostly integrated to ASEAN and non-ASEAN members, such as China, Japan, the United States, India, South Korea, Netherlands, and Australia. Some of these non-ASEAN members are already connected, either throughout the regional plus frameworks, such as the ASEAN Plus Free Trade Area (ASEAN+FTA), the Regional Comprehensive Economic Partnership (RCEP), or via comprehensive bilateral economic agreement, such as the Comprehensive Economic Partnership Agreement (CEPA). As a net investment recipient country and with the need to improve its trade competitiveness, Indonesia must maintain its strong economic relations with investment origin countries such as those mentioned above. These economic ties must be established under mutual interests and sustained by a win-win principle. During this global pandemic, it seems that every country attempts to maintain its economic multiplier domestically. Indonesia is also keen to increase its domestic supply over imported products. Yet, the increasing household spending through the digital economy and stimulation may increase imports. From the digital economy side, Indonesia's products must compete with imported ones to meet domestic market demand. Meanwhile, from the policy side, one of the methods that can soften the impact of imports is countertrade. 

This has six types of models, and the one most frequently used is the counter purchase, where one country does trade with another without using its international reserves. For instance, there are two countries involved: country A and country B. This agreement works when country A buys country B's products only if country B buys country A's products. This agreement will increase the trade flows of final and derived demand products and simultaneously save the international reserves. In sum, any country can be turning its economy back to the previous time by optimizing its double-engine of economic growth with two conditions. The necessary condition remains on how the pandemic is contained. Simultaneously, sufficient conditions consist of using this time as the right time to apply structural reforms and increase labor productivity. 

This is not about finding the right economic sector, but how human capital quality can be improved to increase productivity and how structural reforms can generate a supportive business environment. There are at least three sufficient conditions to complement the necessary condition mentioned above: a reliable set of institutions, a good regulatory framework, and a higher quality of human capital. Both necessary and sufficient conditions are fundamentals for both engines of economic growth to work optimally.                 

Kiki Verico

  *** The writer is special adviser on industry and international trade to the finance minister and lecturer at the School of Economics and Business at the University of Indonesia. 

Economist : EDUCATION Private Tutor

First-class flights, chauffeurs and bribery: the secret life of a private tutor

Tutoring has become a weapon in the global arms race in education. There’s no limit to what some parents will pay

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Oct 9th 2020

BY EMMA IRVING

British books are shit,” Yusuf says, slamming shut my copy of “Pride and Prejudice”. “Just Western propaganda. Like the bbc, and the Queen.” Pale light filters through the heavy silk curtains. I have been sitting in the pit of this cavernous townhouse in Belgravia, London, for two hours with a meaty 15-year-old who has a passion for £3,000 ($3,800) Turkish vodka and ethno-nationalism (the one, I imagine, fuels the other).

So far, Yusuf has discussed his distaste for British women, the way he gets around masturbation (“It’s not allowed in my culture, so I pay someone to do it for me”) and his ardent belief in a resurgent Ottoman Empire. I am meant to be preparing him for his gcses, national exams taken in a range of subjects at the age of 16, as well as the interview process for entry to a new school at sixth form, the final two years of secondary education. “These schools should be applying to have me,” he says. “Can’t we just buy a library or something?”

Yusuf is intelligent enough to realise that tutoring will have little bearing on his life chances. Irrespective of his exam results at any stage, he will enter the family firm and is unlikely ever to be short of money. For Yusuf, the usual motivations for working with a tutor – the promise of gold stars, high grades, top universities and other coveted keys to the doors of success – do not apply. He has seen into the heart of tutoring and his verdict is that it is a sham.

This puts me in an awkward position. Yusuf is not really my client; his parents are. They are paying £70 an hour, but Yusuf is refusing to play the game. I have spent enough time with children to know that he is just a teenager acting out against the demands of a high-pressure education system, doing his best to deter me so that he can spend more time on his Xbox.

What’s also unsettling about his behaviour, however, is that there is little incentive for me to tell his parents about it. For Yusuf’s parents I am one of many members of staff, from nannies to tennis teachers, to whom they have delegated responsibilities since birth. I am certainly not being paid to reflect their failings back onto them. So I plug away, arriving at each session determined to nurture a spark of curiosity and to charm this child into discovering his own academic interests. Whether Yusuf wants me to or not, that’s what I’m there to do.

Tutoring has bullied its way into education systems all over the world with remarkable success over the past two decades. In Britain last year, more than a quarter of children in England and Wales aged 11-16 received some kind of private teaching outside school, according to the Sutton Trust, a social-mobility charity; in London that figure rose to over 40% of children. (Less than a fifth were doing so in 2005, the first year for which the charity collected such data.) British parents spend an estimated £2bn on private tuition each year, not including other extra-curricular activities such as sport or music lessons.

“These schools should be applying to have me. Can’t we just buy a library or something?”

That picture is replicated across the world. A recent research paper points to a rise in the prevalence of “shadow education” throughout Europe. In Germany, Ireland, Italy and Spain at least 40% of school-age children have had private tutoring; in countries where there is a lack of faith in the state schooling system, such as Greece, that figure can rise to between 80% and 95% of all children. In much of Asia, private tutoring is routine. Some parents in China spend over $10,000 a term in the build-up to university-entrance exams; two of the biggest listed education companies in the world, New Oriental and tal Education, are Chinese (they provide tuition and test-preparation). These figures were collected before the coronavirus pandemic but school closures have only increased the pressure to improve home learning.

For some people tutoring is ad hoc, small-scale and short-lived. But not for all. In Britain I have found that the demands a family places on a tutor – typically a privately schooled graduate from a top university – range from the neurotically precise (“we require three hours on sentence structure”) to the dauntingly vague (“to help make school less stressful”).

At one end of the spectrum, tutoring falls somewhere between hand-holding and prison-guarding, with people like me cast in the role of a glorified babysitter: I surreptitiously scroll through Instagram while ensuring all homework is completed on time and without error. At the other, I am encouraged to develop a humanistic approach that emphasises free thinking and personal inquiry. Renaissance-style tutoring promises to help mould a child into the kind of young adult you – or, more importantly, a university admissions officer – might want to sit next to at a dinner party.

Tutoring has risen in line with a cultural shift: university education is now the norm for a larger share of school-leavers than ever before. Close to half of all 25- to 34-year-olds in the 37 wealthy countries that make up the oecd now have a degree. Other countries are fast catching up: by 2030 China and India will account for half of the 300m graduates in this age group worldwide.

Widening access has changed the nature of the competition. Despite the large rise in the number of universities, the same institutions tend to fill the top places in the international rankings. This means that education is now a global battle: far more people in a wider range of countries are competing for slots in the same few, elite institutions. Twenty years ago, America’s Ivy League universities would admit a quarter or more of all applicants. In 2020 Harvard’s acceptance rate hit a new low of 5%.

As society has theoretically become more meritocratic, it has also become more competitive. Not so long ago, having a degree was a passport to a good job. The more common an undergraduate education becomes, the less certainty there is of that outcome. This makes it even more important to get a place at a top institution, rather than a mere middle-ranking one.

Wanting your child to succeed is almost the definition of parenthood (though interpretations of success vary). If a good school begets a good university, a great job, a suitable spouse, house and all the rest, then it’s never too early to start training. Ever more parents, particularly those with money to spare, consider their children to be engaged in an academic arms race. Tutoring is a secret weapon.

Back at Yusuf’s home, our session mercifully draws to a close. As I gather up my books Yusuf declares that he’s going to have to “drop a couple of thou’ to make myself feel better”. He trots off to terrorise the staff of Harrods, and his mother, a woman with the demeanour of a trapped sparrow, comes in to check how it went. “I’m just worried he’ll struggle in the interviews. He’s so humble,” she says. “Could you come to Santorini with us in June to work on his confidence?”

Soaring through Italian airspace, head cushioned by a plush leather seat, I start to suspect I have made a grave mistake. “Allegra’s teacher has been useless this year, hasn’t she darling?” Allegra’s mother flicks her groomed hair over one shoulder. Allegra grunts. Her eyes wisely remain glued to her phone. “Honestly”, her mother continues, “Ms Jacobs didn’t set any half-term homework. Utterly incompetent.” She grabs a passing stewardess and demands a slimline tonic. “So we want you to recap this year’s syllabus, and give a little introduction to next year’s. Two weeks should be plenty of time.”

According to school reports and “the child psychologist”, Allegra is “very clever, gifted”, says her mother, “She’s in the 99th percentile for English, 96th for Maths, so we have a bit of work to do there, don’t we darling?” (“We are a relaxed, informal household,” said the job posting). “But that silly teacher hasn’t pushed Allegra to her full potential, which is where she needs to be if she’s going to have any chance in the 11+ next year.” Her nostrils flare. I make sympathetic noises. The seats are extremely comfortable; the cabin pressure is anything but.

Allegra goes to a top London private school, which means her parents already spend around £20,000 a year on her education. You might think that if her parents had already forked out such fees, they’d consider it the school’s job to enrich her or bring her up to speed in a particular subject. Yet Allegra’s experience is quite common. Children at fee-paying schools receive more extra tuition than their state-educated peers – tutoring is most often deployed for those students who are already advantaged.

At ten, Allegra isn’t even particularly young for extra classes. You see frequent requests for tutors to help five-year-olds prepare to take an entrance exam at seven for what are known as “prep schools” (the “prep” is short for “preparatory”, meaning that they are readying the children for secondary school). I recently came across a request for a tutor to assist with interview practice for a three-year-old boy who was applying to an exclusive kindergarten. The website for one top London tutoring agency, Bonas MacFarlane, carries a tagline, “From cradle to career”.

As society has become more meritocratic, it has become more competitive. Tutoring is a way to hack the system

The industry also caters to parents who want their offspring to go beyond the standard curriculum. One of my friends ran a session on Impressionism for a group of seven-year-olds (every child already seemed to know the term “pointillism”). Another was paid £200 a day to escort a nine-year-old around the British Museum. A company I work for runs online workshops for children as young as eight on topics that range from crime writing to geopolitics; the same firm recently called for a tutor to run a five-week series of sessions with a 12-year-old on “public speaking”, “news/debating” and “ethics and philosophy”. On top of all this tutoring, many middle-class childhoods are filled with sports activities, music lessons and even charity work.

Yet for many children tutoring is about doing more and more schoolwork. I know of an intensively tutored pair of eight-year-old twins who doodle engineering diagrams for fun, know the course requirements for mit and have better maths skills than most adults. Even when their children are clearly far ahead of where they ought to be for their age, many parents see tutoring as a necessary addition to an already packed schedule. This is a winner-takes-all game, where the stakes seem sickeningly high. The child either gets in or doesn’t – it’s a one-strike-and-you’re-out universe. From that perspective, tutoring is a small price to pay to give your child a leg up. It isn’t exactly rigging the system. But at times it’s pretty close.

Kate, who was educated at a state school herself, has been paying for maths tuition for her privately educated 16-year-old for the past year, ever since a school report predicted her daughter a five in one of her gcse subjects (the equivalent of a high C or a low B). We often share a joke and a drink, but as we make small talk in the kitchen of her light-filled mews house, I see a shadow darken her features. “Your kids, when they come out of school and go to university, will be competing, literally, with a worldwide community,” she says. “So if you are able to give them the option of achieving really good exam results, which will help them, you do. It’s not a great system, but it’s the system that we’ve got.”

Does she feel sometimes that it would be better to just avoid the rat race altogether? She takes a deep swig of coffee. “I think the vast majority of parents would prefer not to tutor their kids,” she says. “They’re under enormous pressure from a very young age. But if you have a child who has something they really aren’t getting, and it can help them, then you do it.” A grade B in a single subject apparently equates to “really not getting it”.

However socially conscious parents may be, however unwilling to subscribe to the insanity of this competition, the desire to provide children with the best opportunities money can buy often wins out. One father offered me several hundred pounds for an introduction to the headmistress of my old private school (I refused). A former pupil at Eton College tells me that each year the dean of admissions has to turn down “presents” ranging from the sly (an excellent Château Margaux) to the ludicrous (a chalet in Verbier). Eton tells me that gifts from prospective parents are extremely rare and that any offer is firmly declined and logged by the school, in line with its anti-corruption policy.

Occasionally parents go beyond the borders of rationality. One tutor I spoke to, Frank, a graduate of Cambridge and Harvard, was ushered into a dark corner after his usual tutoring session and informed of the masterplan. The tutee’s father confided that “very good doctors” had informed him that they could inject Frank’s forehead, draw out his dna and re-inject it into his son to “make him more talented”. The father had every faith in this dubious method of transferring genetically attained talent. Alarmed, Frank pretended he was moving abroad in order to leave the family’s employ.

Istarted tutoring three years ago. I had just graduated from university and I needed a side hustle to pursue a career in journalism while living in London, ideally one with flexible hours, excellent pay and the chance to travel.

I’m not alone in choosing such a path. Nearly one in ten people are unemployed 15 months after graduating, according to the Higher Education Statistics Agency. The average rate for a tutor in Britain is between £30 and £60 an hour, and can go as high as £250 an hour for the most in-demand “super tutors”. Even at the low end this equates to three or four hours behind the bar in my local pub. The fees are comparable elsewhere. In China tutors can demand up to £230 for 45 minutes of work for the richest families. In Hong Kong some top tutors have celebrity status and reportedly earn millions of dollars each year.

I applied for my first job with a tutoring agency much as I would have done for any other, with a cover letter and cv listing my academic achievements (and extensive baby-sitting record). Then I went for an interview in a Notting Hill townhouse. I sat across the table from a red-chino-clad man called Henry, who lazily twirled his pen as he asked me if I knew a “pretty girl called Milly who would have been a couple of years above you at school”. I didn’t, but I did explain that I had heard of the company through a friend. “Ah yes, the good old grapevine. It’s all about who you know,” he said cheerfully. I got the job. After that, Henry would send through listings he thought I might like and then put me in touch with the family. I received no advice on how to structure lessons or talk to parents, let alone how to teach the children.

That’s not how all firms operate. Some agencies interview prospective tutors for around 45 minutes on their approach to teaching, their academic record and their motivations, before asking them to present an example lesson plan. If recruited, tutors may be sent teaching resources, be invited to workshops to improve their skills and offered support in dealing with challenging parents and children.

But the casual application process I went through was not unusual. Much of the time tutoring is unsupervised and unregulated. Even when I get jobs through the most respected agencies, it’s often left entirely up to me how I spend the time with a student. All I have to do is file a monthly report on what we’ve covered. Many tutors work without agencies, finding clients through listing sites, noticeboards or word-of-mouth, and may not be screened at all.

Whatever the circumstances, a question remains about whether tutors are in any way qualified. To teach at a state school in Britain you need an undergraduate degree followed by a full year of training, a three-year teaching degree, or two years on-the-job training with the Teach First programme. To tutor, you just need to find a client.

Arthur is a handsome Oxford graduate with dark wavy hair, a fondness for expensive linen shirts and a huge, self-confident grin. He began tutoring just before he went to university, having realised that he could make £40 an hour teaching English instead of £7.50 an hour for tennis coaching.

“She’s in the 99th percentile for English. 96th for Maths, so we have a bit of work to do there, don’t we darling?”

The rewards aren’t just financial. Arthur enjoys the relationship you develop with a student. “The first couple of people I tutored, I just became really good friends with them,” he tells me. “They’re so sweet, and you’re actually working together towards something. You’re actually doing good.”

At the age of 19, Arthur was flown from London to Beijing to work with ten-year-old Chen for a month. It was his first big job abroad but when he boarded the flight to China he had not yet spoken to a single member of the family he would be working for, and had only a hazy understanding of where he’d be living. His contacts were two Chinese women in their 50s, the proprietors of the tutoring agency, who had only a tenuous grasp of English.

Arthur was met at the airport in Beijing by a driver and taken to a soulless, guarded compound in a wealthy part of the capital where he was installed in his own private flat. He was presented with a Huawei smartphone, an envelope full of cash for “living expenses” and the contact for a chauffeur who would be at his beck and call. He was also given a strange yet touching gift: a bicycle with a Union Jack flag on the seat.

The next day, Chen’s mother outlined the battle plan. Through a pantomime of gesture and emphatic repetition, she established that Arthur’s prestigious alma mater was a “very good English school”. Chen would go there, he was told. Chen’s family had money and ambition – and the British school would give him pedigree. Arthur was the third tutor they had flown out in as many months. He would teach for five hours each day.

Chen was already attending an international school in Beijing, with numerous teachers who were fluent in English. To maximise his chances of getting into his chosen school in Britain, Chen was withdrawn from “silly” subjects like art, drama and sport, and instead spent those precious extra hours cloistered in the school library with Arthur, who would shuttle back and forth on his Union Jack bicycle whenever Chen became available. Though Arthur had far less experience than Chen’s school teachers, Chen’s mother was convinced that if her son spent enough time with his tutor then he would somehow conquer that most formidable obstacle that stood between Chen and greatness: the English social code.

The 19-year-old university student found himself the unwitting headmaster of a modern-day finishing school. Arthur was encouraged to educate the boy on everything from cultural touchstones to eating with a knife and fork. He found this uncomfortable: “What you’re really implying is that his culture is wrong. But that’s what his parents wanted me to teach him.”

He also struggled with coaching Chen for school-admissions interviews. Chen was a cheerful boy with plenty of friends and a great fondness for the two family cooks. But he was unable to muster a single convincing reason as to why he should be admitted to a school thousands of miles away. No matter how many times they practised, when he was asked why he deserved a hotly contested place, he responded with wide eyes and a shrug: “My mother likes it.”

From his family’s point of view, the stakes for Chen could not have been higher. Yet his parents had invested an extraordinary amount of money and confidence in a British teenager with no teacher training. Though this was unsettling for Arthur, particularly because he’d grown fond of his tutee, he had little to lose. Tutoring is unique among the jobs I have encountered in that there are few repercussions for failure.

In the end the long month of tutoring turned out to be pointless. The headmaster of the British school to which Chen was applying came to Beijing for a conference, and a meeting was set up between him and Chen’s mother. She was quietly told that her son’s place would be secure, irrespective of how he performed in admissions tests, so long as a number of financial contributions were made in his name. Nevertheless, Chen’s mother was delighted with Arthur, confident that her son would be able to navigate the upper echelons of British society thanks to hours in the company of a “real English schoolboy”. She celebrated by giving Arthur a rare single-malt whisky. Chen was given a week off tutoring.

Tutors who work with elite agencies are members of a fortunate elite of their own. The vast majority of tutors I know were (like myself) educated at a prestigious university in Britain after attending a fee-paying school. They are usually white. The names of many agencies speak to entrenched class privilege: Oppidan Education, considered one of London’s most exclusive tutoring agencies, is named after an obscure term used at Eton to refer to the main body of pupils at the school. Another London-based agency, Elite Tutors, disregards even that subtlety.

The location of the agency sends the same message. Many British ones have offices nestled in the pretty cobblestone streets of London’s most upmarket borough, Kensington and Chelsea. The head of one tutoring company told me that, for a tutor, living near their wealthy students is “a benefit, so you can drop round last minute if needs be” – a situation that further favours those tutors who are able to afford a home in such a pricey area, or, more likely, those whose parents can. So it isn’t just that affluent children are coached from birth, but also that, later in life, a lucrative form of secondary income ensures that the privileged stay privileged. Social mobility be damned.

Tutoring is another iteration of that timeless phenomenon: the help

This divide is perpetuated by the nebulous role of the tutor. Like Arthur, I have spent weeks living with various families, walking the line between staff and guest, mentor and tutor, friend and disciplinarian. “Tutors are above staff in the pecking order, but below a favourite cousin,” the head of one tutoring company tells me. “We choose tutors who are empathetic people,” says another. “They have to be able to read a family dynamic and slip right in.” Parents do not hire a tutor just because they are good at boosting grades. They hire them because they are a walking, talking embodiment of the kind of person they want their child to become.

For all the veneer of friendship, tutoring is ultimately a transactional relationship. The tradition of live-in servants fell out of fashion in Britain by the 1950s. Yet the better-off continue to be supported by an unseen and unsung army of staff – cleaners, nannies, au pairs. Tutoring is another iteration of that timeless phenomenon: the help.

From the second-floor dining room of Allegra’s holiday home in Rome, I watch as the city unspools beneath me, its long streets stretching out in the evening light. A ripe cherry tomato is mid-way to my mouth when the dinner-table chatter turns sour. “I won’t go!” Allegra exclaims, cheeks reddening. Her mother has just announced that there will be an extra hour of tutoring in the morning before Allegra’s golf tournament.

I look down at my plate. It wasn’t the first tantrum I had observed since we landed in Italy, but there was a desperate note in Allegra’s voice that I hadn’t heard before. “Yes, you will go,” Her mother replies. “Unless you want to end up at some B-rate establishment with no chance of getting into a good university and none of your friends at your school?” Allegra throws her napkin down and storms out. Her mother looks at me: “I’m sorry about this. She’s just too young to realise that it’s the best thing for her.” For all her golf tournaments and academic preparation, Allegra is still only ten.

In “Peter Pan”, the Lost Boys are lost because they live permanently in a child’s world. Many of today’s boys and girls are barely allowed to visit it. On average, 16-year-olds in England spend nearly ten hours a week in additional instruction, either provided by their school or a private tutor, according to the Sutton Trust, a figure that is similar or higher in other wealthy countries.

Over the past two decades, parents have actually increased, on average, the time they spend on child-rearing, particularly among better-educated, higher-earning parents. But much of that time is directed towards defined tasks. Childhood has become target-driven and family time is frequently filled with more studying and extracurricular activities. Increasingly, home is a place where daily pressures are perpetuated rather than released.

I see ever more adverts for tutors whose primary focus is to support a child’s emotional needs. One recent posting described a student with “anxiety issues and a real fear of having a go at something publicly where he might be seen to fail”. The advert continued: “Looking for a mentor to click with him, to support him, to be there as a mentor and guide.” Another ad called for a tutor whom a lonely student “could just have fun with”.

The children are definitely feeling the pressure. Many students I work with admit to using drugs to help them focus more, such as ritalin, a stimulant used to treat attention-deficit disorders. According to research in 2019 by YouGov, a polling company, one in seven teenagers in Britain who had taken gcse exams in the previous two years admitted to taking a “study drug without a prescription”. It’s a notable departure from the drugs traditionally associated with teenage rebellion.

Tilly is a bookworm: enthusiastic, peppery, prone to furrowing her brow and unexpected bursts of laughter. At ten, she is articulate and intelligent, yet given to chastising herself, so much so that she has started to bunk off maths because she is in the second set. When I meet her, I am struck that she seems to have forgotten how to play. I ask what her favourite book is and she answers “Bleak House”. I ask her what tv shows she likes, and she says she enjoys watching Brian Cox explain physics. I suggest we play a game to get to know each other and she looks at me as if I’ve just proposed setting her exercise books on fire.

Parents hire tutors because they are a walking, talking embodiment of the kind of person they want their child to become

I try to balance our time between going over the areas of maths she finds challenging – shapes, fractions, percentages – with learning about any subject that qualifies as “interesting”. Her eyes grow saucer-like as I explain that the collective noun for a group of ladybirds is a loveliness and that Chaucer is deliciously rude. I ask her to tell me what she wants to learn and we are both surprised by the result: we move through astronomy to black holes to farts to family dynamics. For me, it’s a welcome departure from a life punctuated by bills, deadlines and obligations. Tilly, too, grows eager for our time together, hungry for knowledge that seems so different from that learned with entrance exams in mind.

At its best, tutoring is an intellectual adventure unfettered by the strictures of the classroom or the exam hall. At its worst, it is the parasitic embodiment of a competitive anxiety that has come to dominate education worldwide. I want to teach my students how to follow their passions, how to strive for the life they want, rather than for hollow symbols of success. But in trying to fix the problems that this high-pressure system creates, I recognise that I am profiting from and perpetuating the very world I seek to change. Parents may fret at the thought of their offspring losing out as an adult, but the children? They stand to lose the only chance they have of being a child.

As I step out onto the streets after tutoring Tilly, I look up at the house. Through her window I can see the crisp outline of her profile, a small silhouette curled tightly over a book. I wonder whether she is reading for pleasure or for purpose, what kind of world she is lost in. I hope it is a tale that shows her that facing up to life’s challenges is how all good adventurers are made, a tale that teaches her to become the protagonist in her own story. She moves slightly and the cover of the book is illuminated: it is a textbook on non-verbal reasoning. I turn into the darkening street and walk away.

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