The rise of the global education industry: Some concepts, facts and figures
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By Antoni Verger, Universitat Autònoma de Barcelona
While the privatisation of education is not a new phenomenon, the increasingly prominent role of profit-oriented private organizations in education across the globe is more recent. Now, more than ever before, a broader range of educational services are produced, exchanged and consumed on a for-profit basis and through supra-national interactions. This phenomenon is evident with services that go beyond traditional private schools and universities and include, to name a few, alternative forms of educational provision (including e-learning), test preparation services, edu-marketing, the provision of curriculum packages, private tutoring and other supplemental education services, certification services, teacher training, recruitment of university students, and school improvement services. All these services — and the actors that provide them — constitute what we call the Global Education Industry (GEI).
GSV-Advisors calculated that the value of the education market, globally speaking, was $4.9 (USD) trillion in 2015, and that venture capital investment in education companies reached nearly $2 billion in 2014 (after growing at a 45% rate over the past five years). In addition, we are seeing the rise of entire trade associations dedicated to optimizing opportunities for investors looking to capitalize on the education sector. As with otherindustry sectors that are being globalized, education is increasingly populated by actors and firms motivated by profit (the so-called edu-businesses), interactions and operations happening at a global scale, competitive dynamics between edu-businesses (but also between edu-businesses and conventional public providers), access to financial capital markets as a way to support the activities of the industry (and its territorial expansion); mergers and acquisitions between corporations, and so on.
The rise of the GEI is not an isolated phenomenon, as other sectors have witnessed globalizing and marketizing trends as well. Indeed, in several ways the GEI represents the apparently inexorable growth of the market into many areas of life previously thought to be outside the purview of market forces and arrangements. Nonetheless, the emergence of the GEI phenomenon reflects also particular changes and trends in theeducation sector, which include the commodification of schooling as a positional good for families; the increasing influence of financial institutions in the educational sector (for both the demand and the supply sides); recent changes in the governance ofeducation; or the prominent role of information and communication technology for learning and testing.
The Global Education Industry actors
A very broad category of economic actors are involved in the production of educational goods and services in the context of the GEI. This includes:
- Chains of private schools, such as GEMS, ARK, Bridge International Academies or the Omega Schools, which are contributing to the diversification of the private schooling sector that has been traditionally in hands of religious or NGO-based providers.
- Big education corporations and conglomerates, with companies such as Pearson, which provide a broad range of publishing and educational services, and IT/software companies, such as Microsoft, Intel, Hewlett Packard or Blackboard standing out.
- Consultancy firms, which go from big transnational corporations such as PriceWaterhouseCoopers or McKinsey that have broad portfolios, and apply business logic to education, to a wide but dispersed constellation of individual consultants, some of which focus more exclusively on education;
- Philanthropic foundations, such as the Bill and Melinda Gates Foundation or the Hewlett Foundation, which are formally autonomous from the corporate matrices, but are usually implicitly aligned with the business strategy of their funders and founders;
- Advocacy networks, which emerge when edu-businesses and other types of private corporations come together in a more or less formal or more or less stable way to advocate for educational changes, often in the public policy realm.
Proponents in favor of increasing the participation of private interests and profit making in education see advantages to the rise of the GEI (education expansion, competition between providers, innovation, etc.). However, there are obvious concerns. To the well-known arguments on market segmentation and educational inequalities resulting fromeducation commodification, several scholars refer also to the challenges triggered by the emergence of the GEI in terms of democracy and accountability. The shift in authority from the state to private actors might make sense on efficiency grounds, but also entails the undermining of democratic control of public education to some extent.
Moreover, the professional autonomy and rights of teachers, as well as the local control of communities over their schools, may be undercut by the shift in authority to private, corporate, and global actors. Similarly, it is reasonable to question whether the shift in accountability structures away from democratic modes to corporate/consumer arrangements reshapes the orientation of education as a public good. That is, corporations are legally accountable primarily to their stockholders and must work first and foremost to create returns for those investors, which are not necessarily aligned with those of the customers, i.e. the students, their families, or their communities.
The emergence and expansion of the GEI raises numerous questions in terms of educational inequalities and the democratic control of education systems: Why is the GEI actually expanding, and what types of market niches are currently opening in theeducation sector? How is the GEI shaping education systems and educational reform processes, and in which direction? Under which conditions do GEI actors complement public education systems (and are, for instance, a source of innovation), and under which conditions do these actors undermine and privatize public education? What is the impact of the expansion of profit motives in education on the opportunities of children, and particularly of children from disadvantaged groups?
These and other questions inspired the elaboration of the new World Yearbook of Education, on The Global Education Industry. The chapters included in the book, which are written by internationally leading scholars in the field, include very rich case studies on these matters in different world locations (Argentina, Brazil, Chile, England, Pakistan, UAE, US, etc.) as well as in-depth examinations of global patterns such as the rise of financialisation, branding, and philanthropic influence. Of course, much more needs to be known. Hopefully, the release of this publication will motivate the generation of new sources of evidence, and boost further social debate on such an important theme.
The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.