Despite obstacles to entering the education marketplace, for-profit education companies in the U.S. are expanding and now hold about 10 percent of the $740 billion market. The most difficult sector for companies to enter is elementary and secondary education, where they receive only 5 percent of total dollars spent and government-run schools teach about 88 percent of students.
Still, in pursuit of consumers, for-profit education companies have devised innovative, creative and cost-efficient approaches to meeting the needs of individual students. Entrepreneurs are both working within and competing against the state-run schools with a variety of products and services. For example, they open or administer roughly 10 percent of all charter schools. Among the approaches of for-profit companies that run schools:
Edison Schools, the largest private operator of public schools, provides students in the second grade or above with computers, has longer and more school days and offer a reading programme developed at Johns Hopkins University and a mathematics programme from the University of Chicago.
National Heritage Academies focuses on educating students to be good citizens as well as good students, encourages parental involvement in education and measures results by student performance and parent satisfaction.
The SABIS School Network, which has schools outside the U.S.A., emphasises the school's global perspective and diversity of its student body; students begin studying another language in pre-school.
Two other education companies, Bright Horizons Family Solutions and Nobel Learning, both started out as for-profit child care providers and expanded their services to school-age children because of parents' enthusiasm for the day-care programmes.
Other for-profit companies have developed technologies that have the potential of revolutionising parts of education.
Scientific Learning Corp. has developed educational software based on 25 years of brain research that has been shown to dramatically improve the language and reading skills of children aged 4 to 13, particularly children who have difficulties in reading and processing speech.
Advantage Learning Systems, Inc., provides learning information systems that drill students on their lessons and provide teachers with assessments of student progress.
TRO Learning, Inc., has designed computer-based educational and training programmes to provide adolescents and adults with problem-solving skills that are transferable to the workplace.
The monopoly that government holds on elementary and secondary education appears to be the fundamental cause of many of its shortcomings. A private, customer-driven system would offer a wider range of services and products so varying needs of students could be better met.
Source: Carrie Lips, "'Edupreneurs:' A Survey of For-Profit Education," Policy Analysis No. 386, November 20, 2000, Cato Institute, 1000 Massachusetts Avenue, N.W., Washington, D.C. 20001, (202) 842-0200.
For Cato text http://www.cato.org/pubs/pas/pa-386es.html
For more on Privatisation http://www.ncpa.org/pi/edu/edu11.html#a
Publish date: 19 December 2000
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