It’s September, and thus another year for BMO’s Back to School
Conference in New York City, which was held on September 13. If you are
interested in the preK-12 or higher education markets, BMO also publishes their
Education
and Training Equity Research, which is known in the Education Investment
community as the bible.
Before recapping my impressions from this year’s conference, a few announcements.
My wife and I spent just over two weeks in Spain, primarily
bicycling and visiting wineries in La Rioja and Ribera del Duero. We visited about
20 wineries, tasted over 70 wines, and averaged about 30 miles a day on our
folding bikes. For those interested, here is the commentary and pictures: http://www.flickr.com/photos/mweisburgh/sets/72157631482124178/
On Thursday, September 20 at 1:00 Eastern time, Sue Hanson and I are giving a
webinar: Storytelling Isn't Just for Bedtime: The Social Side of PR &
Marketing. Here is the registration page: http://www.hostinguc.com/agile/091812/email.html
Finally, if you are going to Ednet, Sept 30 to October
2, Farimah and I would love to meet you.
English: Looking southeast at Special education PS 721 in Gravesend, Brooklyn on a sunny late afternoon (Photo credit: Wikipedia)
BMO Back to School Recap
Don’t just think China and India when looking for large
markets overseas. Brazil already has over $2 billion in private postsecondary
education revenues with double digit growth and over 1 million students
participating in undergraduate distance education a year. Currently fewer than
15% of young people in Brazil take any postsecondary courses, and the
government is increasing student aid.
But, back to China, there are about 200,000 students a year,
whose parents are able to pay full tuition, that are trying to get into the US
for high school education, primarily to learn English fluently. In fact, 85% of
Chinese families that are earning over $1M a year want to send their children
to the US or the UK for at least some secondary education.
Australian and Canadian schools are aggressively attracting
international students. Students from non-English speaking countries pursuing
postsecondary studies in English speaking countries is expected to grow by over
50% over the next five years. To the extent that schools (and national policies) can figure out how to
make this type of education more affordable, like through hybrid programs or
allowing work-study, the floodgates can open even faster. Students generally
choose the country first, then the city, and then the school. While the US is
attractive to the students, our policies often make it more difficult and
expensive.
English: (Photo credit: Wikipedia)
The for-profit postsecondary schools have been under attack,
and are significantly more expensive than community colleges, but they feel
that their advantages over community colleges are as follows:
- Many students leave community colleges because
they are crowded out of the courses they need in order to graduate
- They can offer subsidiaries services, like
childcare
- They can equip their labs better and provide
more hands-on training for occupations
- They are better at marketing
- They are perceived to be better at placement
- They concentrate on the courses that are
occupational, and can offer degrees in less time
One of the largest players in private and charter K12 is
education is K12. They believe that only they
and Pearson are large enough to change education on a national level. Their view
is that there are entrenched interests that are preventing parents and children
from exercising their choice for education, and that the biggest barriers that
they face are political, not demand. Their educational challenge is to help the
more than 50% of children who come into their schools and are behind grade
level.
Education companies are viewing technology and the adoption
of the common core as breaking down the barriers that have created a fragmented
(and diverse) education marketplace in both elementary and secondary education.
They feel this should enable large growth for a number of companies.
However, in a panel on investors, the mood was less
sanguine. Their view is that the US is the biggest education market, but also
the single most regulated, the one showing the lowest return on investment, and
one with significant risk as state and federal policies change, so they are concentrating
much more outside the US.
While there has been a lot of press about Massively Open
Online Courses (MOOCs) and companies like UDEMY and Coursera, a panel of
postsecondary companies pointed out that you can rarely actually have a
completely online program. For example, if you are taking a course in
midwifery, you have to deliver an actual baby and apprentice in a facility that
delivers children. And it was pointed out
that the top 20 postsecondary institutions of 20 years ago and the top ones
today would essentially be the same.
