EY Uruguay Partner outlines the future of technology and the workforce

26 July 2018 Consultancy.lat

In an ongoing global conversation about the future of both jobs and technology in the workplace, Fernando Reggio, a Partner with the EY’s consulting business in Uruguay shares his views on the government’s obligation to train its citizens for the workplace of the future. 

Collecting tax is just a means to an end and that end is efficient public services and social redistribution according to EY’s Fernando Reggio. Speaking to Uruguayan magazine Búsqueda, (in Spanish) Reggio says that whilst technology has made the system itself more efficient, that the rewards are not always being efficiently redistributed to the public. 

“Technology generates transactions more quickly, but it needs people who can assist it. And those people who can assist it [in these transactions] will have more possibilities of work” in the future, Reggio says. “The taxes that finance education, if they were efficient, would then in turn go towards forming that type of people who will go on to work with the same technology.” 

Reggio begins by taking us back to the start of the millennium. “Ten or fifteen years ago we used a way to collect taxes that was not as simple as now,” he says. Today, we can pay our taxes via bank transfers online and on Sundays, which was unheard of in Latin America before the internet. “In this sentiment, it’s progressed in a great way and has given many possibilities so that you don’t have to change location in order to pay.”

These possibilities have in turn made governments more efficient, however Reggio contends that these efficiencies are not being continued throughout the bureaucratic process of administration. The shortfall he says is across the board but exemplified in public education which is not fulfilling its role to develop the next generations for the future of work. “It’s why private schools are always gaining more ground.”

Just like tax being a means to achieve an end, so too is technology – albeit with a different designated outcome. Reggio gives an example: “There are fewer people working in the fields [in agriculture]. That's true, physically speaking, however, how many people work for the agricultural sector?” 

“How many people are designing harvesters or thinking agricultural inputs (eg. pesticides, fertilisers)? Technology generates work. We had a model in which we gave a service and with that service we relied on technology, but now it has progressed so much that by itself it already provides services. Before, technology assisted us, while now we are increasingly assisting it.”

EY Uruguay Partner Fernando Reggio outlines the future of technology in Uruguay

“Today you have to be more updated because everything changes constantly. We need engineers, people who are helping technology to fulfil its function. All these are jobs that are generated and that will continue to be generated. Before, it was very important to know how to read and write, because the jobs at that time required it. Today it is not enough for you anymore. You have to use technology, know how to operate a cell phone, computers, a lot of tools to be in the labor market. We have to educate people to manage those technologies.”

This is what Reggio means when he is talking about tax and government spending. When tax is collected more efficiently creating savings in the bureaucratic system, those savings should go on to ensure that the public can benefit as well; in this case by turning the focus of education towards the skills which will be necessary to enter a disrupted and technology-driven labour market.

“The end does not change,” he says, referencing that people still want the same things that they did a century ago. Whether it’s job security, money to put one’s children through a good education, to live comfortably and to develop in our professions, those values are the end game. Technology now puts those goals within reach but changes the route to achieve them, and for Reggio, it’s the government’s responsibility to ensure that it passes on the knowledge. 

“Today we [at EY Uruguay] have computer companies that provide engineering services or other functions. We, despite being a firm of accountants, need more and more engineers. This generates alliances with companies because we also have to be more efficient to achieve what we want. The technology fell directly on top of us and we had to learn to use it. Today, companies have to be able to take technology and take it to where we want to use it.

Reggio, when asked if he was worried if technology will take jobs away, said that it's the other way around. Jobs will shift from the low-skilled category to require higher technical knowhow, creating more opportunities for more capable people.“Technology generates transactions more quickly, but it needs people to assist it and those people who can assist it will have a job.” 

“That generates more evolution, more quickly. Robotics is coming, which will replace jobs without any doubt. But others are going to appear, because we need people who work for robotics. So far, that happened in the world. The world changed substantially and there is more and more work,” he concludes. 


Brazil is one of Latin America’s largest education opportunities

28 January 2019 Consultancy.lat

Demand in Brazil for private education is on the rise, according to a new study by a global management consultancy.

Private schools currently account for 20% of the K-12 market (primary and secondary education) in Brazil, but this is believed to shift, taking further market hold in the coming years. Brazil’s rising middle class has grown from 15% to 30% of the country’s population in the last two decades. There is also increased dissatisfaction with public schooling, where high teacher-student ratios often correlate to lower learning outcomes. These factors are seeing an increasing number of families that can afford – and are seeking – private schooling.

According to a report by L.E.K. Consulting, titled "Brazil’s burgeoning private K-12 market," this demand will lead to “premiumization” in the market, with the emergence of higher-end schools that can “command a higher market price by delivering differentiated, superior educational services,” the report states. The Brazilian government is highly supportive of private K-12 schools, and has placed no restrictions on tuition fees.

Public vs. private K-12 enrollment, Latin American countries

Better teachers, better tech, better results

Families are particularly interested in institutions offering high-quality English-language curriculum. One one hand, this is to prepare children for the global workforce, on the other, it allows the top performers to land a position in top local and global universities. In order to cater to the growing demand, bilingual schools have emerged as the fastest-growing segment in the market.

A key challenge for schools is finding qualified teachers – there are few skilled local teachers, and expat teachers demand much higher salaries. The focus, then, must be on recruiting, hiring, and training local teachers in internationally competitive methods. Maple Bear, a Canadian bilingual school operating in Brazil, does just that, the report finds. Canadian teachers (native English speakers) lead the trainings, which are aligned with the school’s curriculum. 

Parents are also quite interested in schools that use 21-century technology – and teach related skills – in the classroom. Although 40-50% of Brazilian private schools already use tech-powered learning systems, there is “significant headroom for growth.” 

Regardless, the data is in: the better the student outcome, the happier the parent, the more successful the school. “School chains that were able to provide high-quality outcomes were also able to sustain growth rates despite an economic slowdown,” the report states.

Parent survey  findings, developed and emerging markets

Enter the investors

The demand for private schools is opening the door for investors and companies seeking to capitalize on the growing market. In 2018, in one of several high-profile sector moves, Brazilian-based Kroton Educacional, the largest for-profit educational company in the world, bought educational publishing company Somos Educacao, for $1.8 billion.

Investors seeking to enter the education technology market through acquisitions must decide whether to focus on business to business (B2B) or business to consumer (B2C) services. B2B services may be slower to implement because of a lack of infrastructure in schools. Brazil, for example, has four times as many students per computer when compared to many nations. B2C services, however, by nature require “higher customer acquisition costs.” Investors must tread carefully before taking a firm step in any direction when it comes to education technology.

Companies and investors looking at acquiring schools should also show caution. “The market is currently dominated by ‘mom-and-pop’ operations,” the report states. Less than 5% of private schools are in the organized sector. With such a fragmented market, “consolidation will be slower and more challenging.” A L.E.K. Consulting study of the top 20 cities in the country found just 100 “potentially acquirable targets after adjusting for ownership, scale, and quality.”

Another challenge facing investors are low tuition fees and enrollment numbers when compared to nations such as China, the UK, and the US, which could be financially off-putting. Brazil’s sheer size, too, is an obstacle. Each of the country's five regions has its own educational needs and regulations, and while Brazilian universities are increasingly adopting a standardized national entrance exam, it is not yet fully formed.

Average private school scale, select countries

Concluding, the authors state, “Brazil’s private K-12 market is a hotbed of opportunities for investors and operators. Mounting demand for higher-quality education, combined with a wealthier population and supportive government regulations, has created optimal conditions for market entry. However, success will be determined by how well investors can identify the gaps in the market in order to meet local needs.”

An August survey identified the top consulting firms for the education sector, some of which might dip a toe into the Brazilian market. Elsewhere in the industry, education consultancy spending in the UK has increased 196% in 14 years, prompting national criticism.