by David Safier
When I write about the privatization of education, I'm usually talking about the charter school movement, especially the for-profit wing, and vouchers. But there's also the growing private market in tools for the traditional district-based public schools discussed in this Reuters article, Privatizing Public Schools: Big Firms Eyeing Profits From U.S. K-12 Market.
Traditionally, public education has been a tough market for private firms to break into -- fraught with politics, tangled in bureaucracy and fragmented into tens of thousands of individual schools and school districts from coast to coast.
Now investors are signaling optimism that a golden moment has arrived. They're pouring private equity and venture capital into scores of companies that aim to profit by taking over broad swaths of public education.
In the venture capital world, transactions in the K-12 education sector soared to a record $389 million last year, up from $13 million in 2005. . . . The goal: an education revolution in which public schools outsource to private vendors such critical tasks as teaching math, educating disabled students, even writing report cards, said Michael Moe, the founder of GSV.
Education entrepreneur John Katzman urged investors to look for companies developing software that can replace teachers for segments of the school day, driving down labor costs.
"How do we use technology so that we require fewer highly qualified teachers?" asked Katzman, who founded the Princeton Review test-prep company and now focuses on online learning.
Autism in particular, [Mark Claypool, president of Educational Services of America] said, is a growth market, with school districts seeking better, cheaper ways to serve the growing number of students struggling with that disorder.
Whenever you see big moves on the education front, like increased standardized testing or a national common core curriculum, think of how many new tests and books and curriculum packets have to be created. An idea may look good at first blush -- it may even be a good idea -- but if it means a significant boost in private sector spending by schools, be very suspicious.