The Global Market forThe Global Market forEducationEducation

Harry Anthony PatrinosWorld Bank

hpatrinos@worldbank.org

AUCC International Conference

Montreal, Canada

October 31 - November 2, 2000

Size of the Global MarketSize of the Global Market

$2 trillion (Merrill Lynch) Teaching staff employed in education:

2% to 5% of labor force 1.5 M+ tertiary students abroad: $27 B One-third of global market in USA

15% in developing world

Wages Relative to WagesWages Relative to Wageswith No Schoolingwith No Schooling

0

1

2

3

4

5

6

IndonesiaThailand

PeruCote d’Ivoire

USASlovenia

Primary Secondary Post-secondary

Tertiary Education ChallengesTertiary Education Challenges

Low enrollments and decreasing public resources

Inequality in access Lack of quality and relevance Globalization -- New Economy

Financial IssuesFinancial Issues

Public spending inefficient

Over-subsidized higher education In Africa, higher education spending/student = 44 X

primary

Governments less able to bear increasing cost of expanding public system

Evolution of Tertiary Education Evolution of Tertiary Education Enrollment (1980-1995)Enrollment (1980-1995)

0

10

20

30

40

50

60

70

1980 1985 1990 1995

Source: UNESCO, 1997

%

More developed countries

Countries in transition

World Total

Less developed countries

Least developed countries

Private Enrollment in Tertiary EducationPrivate Enrollment in Tertiary Education

0 10 20 30 40 50 60 70 80 90

Philippines

J apan

Indonesia

India

Bangladesh

Nicaragua

Austria

Peru

Chile

Nepal

U.S.A.

Thailand

Mexico

Argentina

Rwanda

Bolivia

Spain

Kenya

Panama

Sweden

Percent

0 5 10 15 20 25 30

Percent

Fees as Share of Expenditure Fees as Share of Expenditure at Public Institutionsat Public Institutions

2

3

7

9

22

23

25

26

37

41

45

57

0 10 20 30 40 50 60

Uganda

Chile

Korea

Indonesia

United States

Mali

Japan

Germany

France

Denmark

Netherlands

Sweden

Household Spending (% of total Household Spending (% of total education spending, all levels)education spending, all levels)

Private Sector Share of Higher Private Sector Share of Higher Education EnrolmentsEducation Enrolments

Korea 75%

Indonesia 65%

Philippines 80%

Colombia 60%

Brazil 60%

Private Higher Education in Private Higher Education in Developing CountriesDeveloping Countries

100% of professional training in Cote d’Ivoire 44% of skills training market in The Gambia Almost non-existent in Mauritania 75% of tertiary colleges in India 1,274 institutions, 4 Million students in China 37 tertiary institutions in Ghana (11 accredited)

Private Higher Education in Private Higher Education in Developing Countries (cont’d)Developing Countries (cont’d)

Fees main source of income Serve both rich and poor New sector Complete range of institutions Ownership types Offer limited range of courses Often use part-time staff Regulatory framework less developed

Significant GrowthSignificant Growth

3 new colleges currently being set up in Ghana

500 new tertiary institutions in China, 1995-99

7 universities, 25 colleges applied in Cameroon 27 applied in Kenya this year 4 universities registered, 19 in development or in

process of accreditation in Tanzania

Private Business Schools in Private Business Schools in Eastern Europe, 1998Eastern Europe, 1998

Poland 91 Czech Republic 29 Armenia 21 Romania 18 Bulgaria 4 Slovenia 1 Macedonia 0

Distribution of Public Subsidy by Quintile:Côte d’Ivoire

14

17 17 17

35

0

5

10

15

20

25

30

35

40

1 2 3 4 5

Quintile

Pe

rce

nt

Distribution of Public Subsidy: Kenya

1720 21 22 21

0

5

10

15

20

25

1 2 3 4 5

Quintile

Perc

ent

Distribution of Public Subsidy by Quintile: Pakistan

14 17 19 21

29

0

10

20

30

40

1 2 3 4 5

Quintile

Perc

ent

Brazil: Objetivo/UNIPBrazil: Objetivo/UNIP

1962 a ‘coaching class’ for pre-university students -- 20 students

Largest chain of private schools and universities in the world: 514,000 students 482 campuses/sites - majority franchised Turnover US$384m (1996-7) Profit US$40 m (1996-7)

Romania: CODECSRomania: CODECS

Romania: Centre for Open Distance Education for Civil Society

Est. 1993 Distance education in business and

management 2,578 students in 1997

For-Profits Targeting Developing For-Profits Targeting Developing WorldWorld

Apollo Group (Univ of Phoenix) -- Apollo International

Sylvan Learning Systems -- Universidad Europea de Madrid

Unext.com? Columbia, Chicago, Stanford, LSE, Carnegie

Mellon

On-line EducationOn-line Education

African Virtual University Est. 1997, 15 African countries, 2,500 hours

of instruction, 12,000 students NextEd.com

Est. 1998, 12 universities (Aus, Can, Hol, NZ, UK, US), 2,600 students, 21 countries

South Africa: EducorSouth Africa: Educor

Est. 1943, as ‘cramming’ college 1997 - internal expansion and acquisition of

other companies in southern Africa: 300,000 students on 43 campuses

1999 - global expansion - purchases 50%+ of International Business Schools, Toronto

India: NIITIndia: NIIT

Est. 1979, as computer training company Now has 400 centres in India and has

expanded into 30 countries

http://www.worldbank.org/edinvest

A joint WB/IFC/private sector initiative

Country Market Reports for investors

Database on potential investments

Exchange of ideas and market information

Regional Conferences

MessagesMessages

Competition in education brings new set of responsibilities

Investigate the market for education Internet will change higher education Trade will become an issue