Improve Schooling: Let in the Entrepreneurs!

The education industry has the potential to become the largest investment sector on the world’s stock markets. However, for this to occur, governments would have to relinquish their existing dominance over and control of education.

Compulsory schooling laws have the effect of stifling innovation. These laws and their ancillary regulations, although intended to improve education standards, prevent alternative suppliers from entering the market. They prevent people with a passion for education, who come from a wide range of professions and skills, from exercising their entrepreneurial spirit in the education field. They deny them the chance to carry out the role entrepreneurs fulfil in other areas of enterprise; that of increasing variety, and, through competition, forcing quality up and prices down.

Entrepreneurs play an extremely important role in all economies and as long as this legislation remains on the statute books, education will not attract them. They are agents of change, who seek out ventures in which they can produce new products and services that will be attractive and satisfying to consumers.

Government-provided schooling plagues the nations of the world because of its high costs and poor results. No matter what systems are devised and introduced, worldwide there are constant complaints about the persistent failure of the education system to achieve objectives, and instead cause what Milton Friedman called the stratification of society, with the upper and lower strata being defined by educational success or failure. Too many people are left behind, too many end up unable to read or write despite having spent years sitting on school benches. Too many leave school hating their failure and bearing a grudge against those around them who were fortunate enough not to suffer the same torment.

When there is such a vast need for change and revision, the conditions are ripe for the entrepreneurial discovery process to come into play. Schooling, and the education industry as a whole, is crying out for investors and innovators to change the method of delivery of education and training to young people. In a few short years they would revolutionise the manner in which information and skills are acquired, if only they were allowed to do so.

So, if it holds so much promise for the future of children everywhere, what is stopping this education revolution from happening? It is collectivisation of education. That is what stops innovation in its tracks and prevents the entry of entrepreneurs. Centralised control, imposed curricula that leave no room for choice or innovation, capture and domination of schooling by teachers and their unions, and the power granted to government officials to regiment even those children whose parents pay the full cost of their education, are all part of the process and consequences of collectivisation.

Collectivisation becomes inescapable when compulsory schooling laws are introduced. The reason given for the introduction of such laws is to ensure that every child attends school. If that were the objective, it would merely be necessary to incorporate lack of education as a factor in social welfare laws to protect children who are not receiving a basic education. It would not be necessary to impose such legislation on children who are attending school.

Contrary to what people generally believe, in the vast majority of cases, parents, in the absence of compulsion, would educate their children. The large number of black children who attended school in South Africa when they were not subject to compulsory schooling laws provides substantiating evidence that corroborates this contention. Also, Professor Edwin West’s research into children’s education reveals that when all schooling was private in England, prior to the introduction of compulsory schooling laws in 1880, children were probably more literate then than they are today.

What could we expect if the compulsory schooling law were to be abolished tomorrow? Parents, who could afford it, would purchase the kind of education suitable for their children, from schools that could deliver what they need. For children whose parents could not afford school fees, government, instead of providing schooling, could provide students and their parents with vouchers to purchase schooling from schools of their choice. This would create competition between a vast array of schools, public and private, to attract government-funded students. Students would be clients instead of captives, which would induce an immediate change in the attitudes of teachers. Even without repealing the compulsory schooling laws, the government could introduce a system of allowing the money to follow the student, which would capture some but not all the benefits of open school choice.

Freed of compulsory schooling laws, schools would start to transform dramatically. Government schools funded according to the number of students they can attract, to achieve their targets, would canvass students and their parents to discover what subjects they would like to be taught in addition to numeracy and literacy. Preferences would differ from school to school. They would start specialising in order to meet the demands of their communities. And it would not be long before teachers started to think about taking over schools and running them as business ventures.

Existing private schools would possibly change most rapidly when free of the compulsory curriculum. They would teach the subjects they have always wanted to teach and do so in the way they have always wanted to but for the compulsory curriculum.

Most exciting of all for students will be the formation of niche education establishments that cater for special interests in addition to the basics. The possibilities are endless. In view of the high rewards that talented sportswomen and men receive, a rash of sports schools would probably be established. And firms that need particular skills not taught at universities would be tempted to set up schools to teach those skills. In every case, literacy, numeracy and communication skills would be fundamental – all young people know, for instance, that a sports star has to appear on radio and TV.

Surprisingly attractive learning opportunities at surprisingly low prices will come about once education and training entrepreneurs fully enter the market. After all, this is the role that entrepreneurs perform in whatever sphere of the economy they are active. The sooner the education sphere is made sufficiently attractive to capture entrepreneurial attention and investment, the better it will be for all young South Africans.

An entrepreneurial education environment would increase choice and quality, and reduce the costs of delivery. It would rapidly solve the problems that currently challenge government education authorities everywhere. It would enable students to receive the kind of schooling that they and their parents really want. Most importantly, many more young people will relish the time they spend learning and enter adulthood with their self-esteem intact and better able to function in the world at large.

AUTHOR Eustace Davie is a director of the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.

FMF Feature Article / 30 August 2011