The Global Market forThe Global Market forEducationEducation
Harry Anthony PatrinosWorld Bank
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