How For-Profit Businesses Will Reshape Education

Access and Inclusion September 25, 2014

Looking out to 2025, the following are likely:

1) For-profit education businesses will disrupt and drive change and innovation in the educational system at all levels.
2) At least part of the 2025 educational system will be in the hands of for-profit businesses.
3) Public systems will change and reform and they will still dominate.
4) Issues, challenges, contention, and uncertainty about education will still be with us.

It’s far from certain how much for-profit schools and services will be our sources for education in the future. Regulators question the performance and sometimes the ethics of for-profit schools and universities. International policymakers question why K12 for-profit schools help achieve universal basic education if they charge poor families fees.

For many reading this, for-profit business in education is inappropriate or is a threat. And some for-profit entrants have proved to be too focused on profits and not education. It’s no wonder people worry that for-profits might subvert our system. But I believe, they are here to stay, and their influence will help.

Why? High and rising demand for accessible, quality education around the world requires rapid expansion and investment. At the same time, the fast rise, and high cost, of technology in education stresses the public system. And there is a desire for innovation and alternative forms of education, such as skill certification, digital learning tools, hands-on experiential learning, new educational philosophies, and new ways to address different learning styles.

The formal system has had trouble innovating and changing. Society has long tolerated its slow pace of change. Now there is a flowering of alternatives, and more people are frustrated with the traditional system’s resistance to change and reform.

The public have begun to wake up to this, but it faces distinct rigidities: laws, tenure systems, contracts, funding limits, expectations, and so on. In the face of these, for-profits have emerged in two phases:

  • Phase 1: For-profit schools arising as a simple substitution for not-for-profit or public ones.
  • Phase 2: New models for schools and new educational products and services. For example, learning has gone online and often become game-like with learning programs like Rosetta Stone or Duolingo. And innovators have broken learning into smaller pieces of content and even sometimes offered it for free, with MOOCsMassive Open Online Courses.

The several companies behind the MOOCs movement, including EdX (a non-profit), Coursera, and Udacity, intend to transform education, and their fast growth, high interest, and innovative push into how to transform the content and delivery of education, have begun to drive innovation in all parts of the system. 

They and others are doing something distinctive. They are breaking down what has been a monolith – a fixed curriculum, or degree – into useful, transferable, salable parts, specific skills and learning achievements. And that puts more control into the hands of the learner. It can be more affordable and tailored to the goals and timing needs of the student.

We have moved to an à la carte education, and for-profits were a key to driving that change. This means they have broken away from the more fixed, regulated, guided educational systems as we have known them. Rather than seeking accreditation in the formal system, some instead exist outside that system, yet they are attracting learners.

fresh vision and innovative ideas for better learning can be the basis for for-profit school or education-related service. The for-profit’s leaders are like principals or university presidents, but they operate without many of the institutional constraints that may force the traditional educational leader into the role of bureaucrat.

As a crucible for innovation and a driver of competition, there is much we might gain from the rise of for-profit education. However, it will remain in the hands of governments to shore up or progress other parts of the system, to fill market gaps, to ensure equity, and to provide for the parts of the system not of interest to business.

The new system we may get, with accessible for-profit offerings, could serve the interests of those with money, at the expense of the poor and less educated. It may require public efforts to draw out the best innovations for the greater good.

So what is the role of educators in this time of change? It is not to resist for-profits. It is to help channel and shape the course of change in a system that includes for-profits.

For the sake of emerging and future generations of learners, let’s let this new competitive spirit run its course but help guide it. We need change, progress, investment, and innovation, and it looks like we will get them, but that’s best done not by standing in the way, but by embracing the experiments, investments, and new ideas coming from business.