The Global Market for Education Harry Anthony Patrinos World Bank AUCC International Conference Montreal, Canada October 31 - November 2, 2000

Size 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 Wages with No Schooling Indonesia Thailand Peru Cote d’Ivoire USA Slovenia Primary SecondaryPost-secondary

Tertiary Education Challenges  Low enrollments and decreasing public resources  Inequality in access  Lack of quality and relevance  Globalization -- New Economy

Financial 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 Enrollment ( )

Private Enrollment in Tertiary Education

Fees as Share of Expenditure at Public Institutions

Uganda Chile Korea Indonesia United States Mali Japan Germany France Denmark Netherlands Sweden Household Spending (% of total education spending, all levels)

Private Sector Share of Higher Education Enrolments Korea 75% Indonesia65% Philippines 80% Colombia 60% Brazil 60%

Private Higher Education in Developing 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 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 Growth  3 new colleges currently being set up in Ghana  500 new tertiary institutions in China,  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 Eastern Europe, 1998  Poland91  Czech Republic29  Armenia21  Romania18  Bulgaria 4  Slovenia 1  Macedonia 0

Brazil: Objetivo/UNIP  1962 a ‘coaching class’ for pre-university students 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: CODECS F Romania: Centre for Open Distance Education for Civil Society F Est F Distance education in business and management F 2,578 students in 1997

For-Profits Targeting Developing World  Apollo Group (Univ of Phoenix) -- Apollo International  Sylvan Learning Systems -- Universidad Europea de Madrid  Unext.com?  Columbia, Chicago, Stanford, LSE, Carnegie Mellon

On-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: Educor F Est. 1943, as ‘cramming’ college F internal expansion and acquisition of other companies in southern Africa: 300,000 students on 43 campuses F global expansion - purchases 50%+ of International Business Schools, Toronto

India: NIIT F Est. 1979, as computer training company F Now has 400 centres in India and has expanded into 30 countries

 A joint WB/IFC/private sector initiative  Country Market Reports for investors  Database on potential investments  Exchange of ideas and market information  Regional Conferences

Messages  Competition in education brings new set of responsibilities  Investigate the market for education  Internet will change higher education  Trade will become an issue