Education, Education Technology & MOOCs OVERVIEW
Education, both at higher and lower levels, is one of the largest activities in the world (in terms of employees, expenditures and consumers—that is, students).
However, somewhat similar to the health care sector, education's expenditures, quality of output and ultimate results vary wildly from nation to nation, and from place to place within nations.
In total, global public and private spending on education (K-12 through higher education) is equal to about 6% of GDP, or $4.5 trillion for 2016.
On a worldwide basis, this makes the education sector a bit smaller than the health care sector.
These numbers are according to Plunkett Research estimates.
Globally, the UN counted 1.29 billion students in grades K-12 during 2014 (the latest year available).
This amounted to an 89.3% enrollment rate (of potential students) in primary schools and 65.1% in secondary schools.
The UN also counted 207.5 million students in higher education worldwide.
Meanwhile, the global education market also serves both working adults (corporate training and worker certification) and adults seeking learning for personal, casual or recreational purposes.
Many working adults also return to universities in order to continue or expand their educations, often with an interest in changing their careers.
Corporate training and education was a $70.6 billion market in the U.S. in 2016, and a $155 billion global market, according to Plunkett Research estimates.
Education, both at higher and lower levels, is one of the largest activities in the world (in terms of employees, expenditures and consumers—that is, students). However, somewhat similar to the health care sector, education’s expenditures, quality of output and ultimate results vary wildly from nation to nation, and from place to place within nations.
In total, global public and private spending on education (K-12 through higher education) is equal to about 6% of GDP, or $4.5 trillion for 2016. On a worldwide basis, this makes the education sector a bit smaller than the health care sector. These numbers are according to Plunkett Research estimates.
Globally, the UN counted 1.29 billion students in grades K-12 during 2014 (the latest year available). This amounted to an 89.3% enrollment rate (of potential students) in primary schools and 65.1% in secondary schools. The UN also counted 207.5 million students in higher education worldwide.
Meanwhile, the global education market also serves both working adults (corporate training and worker certification) and adults seeking learning for personal, casual or recreational purposes. Many working adults also return to universities in order to continue or expand their educations, often with an interest in changing their careers. Corporate training and education was a $70.6 billion market in the U.S. in 2016, and a $155 billion global market, according to Plunkett Research estimates.
Colleges and Universities: In higher education, the U.S. had 13.3 million students in degree-granting, 4-year colleges and universities during the fall 2016 semester school year, and 6.8 million students in public 2-year colleges, according to the National Center for Education Statistics.
Education in Grades K-12: In the United States alone, 55.5 million students (public and private schools combined) attend classes from preschool through 12th grade, in 98,271 public schools of all types, operated by 13,491 school districts, plus 33,619 private schools. (Roughly 2 million additional lower school students are schooled at home.) These schools are run by 3.6 million teachers and 3.4 million administrators and support staff. These numbers are for 2015 (the latest year for which comprehensive data is available) published by the U.S. Department of Education, National Center for Education Statistics.
The cost of this schooling is approximately $625 billion yearly for public K-12 schools (not including private schools). Expenditures were expected to be about $11,600 per student for the 2016-2017 school year, but the cost varies wildly depending on what part of the nation you are considering. For example, 2013-14 found expenditures ranging from $6,546 per student in Utah to $20,557 in the District of Columbia, and $20,156 in New York City.
Roughly $80 billion of the total cost of public K-12 education is provided for by various federal government programs. Most of the balance is split about evenly by state and local taxes.
Challenges in Lower and Higher Education: The realm of education can, at its simplest, be divided into two parts: lower education (preschool through high school, often referred to as K-12) and higher education (junior colleges, technical schools and colleges and universities, including their graduate schools). Those two sectors could each be logically divided into two further parts: publicly-funded schools and private schools.
Regardless of which quadrant of this simplified view of schools and colleges is under discussion, the challenges faced by funders, administrators, parents and educators are disturbingly similar in many economically-advanced nations: a) costs that have grown very rapidly over recent years (reflected in high tuition, high operating expenses and growing costs to taxpayers and private tuition payers); b) results that are often disappointing (reflected in a combination of low graduation rates, poor standing in comparative international studies of K-12 student achievement, high levels of college student debt and difficulty among many students in finding good jobs upon graduation—sometimes referred to as underemployment); and c) the need for schools and teachers to attempt to serve large student bodies of widely varying intelligence, cultural or linguistic background, academic interest and individual needs.
There are stellar examples of schools and colleges that rise far above these challenges across the U.S. and the rest of the world. Unfortunately, there are also miserable failures at the bottom of the list, where schools fail to deliver a reasonable return on the time and money invested in them.
The proposed (and very controversial) cures to education’s needs are as varied as the challenges faced, ranging from bigger school budgets and higher pay for teachers at the simplest end to more centralized control, government intervention, student testing and accountability for teachers at the most complex end. Some people argue for less federal government involvement and more autonomy at the state and school district level, while many observers state that teachers’ unions have too much power and political influence.
Alternatives to traditional education are gaining traction. Charter schools, home schooling, online classes and MOOCs (massive open online courses) are slowly gaining market share, sometimes provided by for-profit companies, sometimes springing from parental efforts, and most often growing through nonprofit groups ranging from public school systems to religious organizations.
At the college and university level, concerns about the costs and effectiveness of higher education have been accelerated by the massive debt levels now carried by U.S. college students. U.S. Bureau of Labor statistics indicate that the price index for U.S. college tuition rose by nearly 1,300% from early 1978 through early 2017, four times faster than the overall rise in consumer prices (food, housing, etc.) of about 287%.
However, the increases in tuition stated above do not reflect the fact that financial aid to university students has also increased substantially. The net cost to the typical student has risen at a much slower rate, after factoring in financial aid. Another significant factor that is often overlooked is the fact that state budgets for support to public universities typically have not kept up with inflation, leaving it to universities to look to higher tuition to cover their costs. (State budgets are under extreme pressure due to the rising costs of pensions for former state workers, leaving less money available for education.)
At the same time, many observers point to a long-term trend of rising ratios of administrative, non-academic staff to professors, creating lower operating efficiencies and higher overall costs of education. This would indicate opportunities for the application of better technology to reduce the number of employees required for administrative tasks, such as human resources or accounting.
In fact, total American student debt, at $1.31 trillion, is of stunning proportions, exceeding even total credit card debt. The average new U.S. graduate with a 4-year degree left school in 2016 with $37,000 in student loans, up from only $18,600 in 2004. The burden of making payments on these loans is limiting the ability of recent graduates to purchase cars, household goods and homes, which in turn is detrimental to the growth potential of the economy overall. There is tremendous pent-up demand among recent grads to form new households of their own, but their finances and job prospects in many cases limit their ability to leave their parents’ homes and strike out independently.
Meanwhile, there is a growing emphasis in America on better supporting and utilizing the community and technical colleges that are already widespread across the nation, in order to reduce overall tuition and fee costs to students and boost career-specific training tailored to suit the needs of local employers. Such schools typically have much lower tuition costs than 4-year colleges and universities.
Technology as a Long-Term Solution: Technology-based education solutions are gathering tremendous momentum, and in many cases they are being carefully tested and applied in real school situations. Online learning is gathering speed at all levels, from home schooling of high school students, to basic courses for university students, to essential skills training for corporate employees.
Software tools enhancing everything from school attendance management, to student engagement, to the availability of learning resources online are growing in availability and popularity. Business and investment opportunities abound due to the immense demand for greater productivity, efficiency and effectiveness in education. “Points of pain” can be found throughout the spectrum of the education sector, while the size of the market is immense, both in developed nations in North America, Europe and Asia, and in less-developed countries starved for good educational resources.
People who are considering the future of education should be prepared for twists, turns and surprises. Massive demand for quality education worldwide, combined with the need to control costs and harness the potential of cloud-based computing, mobile devices, ultrafast internet access and artificial intelligence, will lead to unexpected changes and advancements. For example, Google’s free cloud-based apps, like Google Docs, are taking public schools by storm, while traditional publishing firm Bertelsmann (the massive global firm that is owner of dozens of radio and TV companies and such book imprints as Penguin Random House, as well as music company BMG) has invested heavily in state-of-the-art edtech firms including Udacity, HotChalk and Relias Learning. One of the biggest surprises of all was an announcement by world-class Purdue University, long a leader in fine education with its advanced schools of engineering, science, business and aerospace, that it would acquire the for-profit education business of Kaplan university, picking up 32,000 students in the process. Kaplan owned a very well developed online learning platform, and the acquisition enables Purdue to rapidly expand its offerings to remote students, including working adult learners.
Industry Overview Video
WE PROFILE HUNDREDS OF TOP COMPANIES:
- Apollo Education Group Inc (University of Phoenix)
- Broadview Institute Inc
- Franklin Covey Company
- Adtalem Golbal Education Inc
- iLinc Communications Inc
- HealthStream Inc
- Sylvan Learning Inc
- HealthAnswers Education
- NIIT Limited
- Education Management Corporation