EDUCATION INDUSTRY PROFILE

The average public school teacher salary in the US was about $60,000 in 2020-2021, according to the data from the Department of Education’s National Center for Education Statistics (NCES). The average pay for college professors in the US was about $65,000 per year, according to Indeed.

The US education sector’s turnover rate is significantly lower than the national average. The injury rate for the education sector is moderately lower than the average for all US industries.

Global demand for education services is growing as nations strive to educate their workforce and teach workers vocational and technological skills. Most countries have a system of public schools that at least provides primary education. Leading postsecondary institutions based outside of the US include the universities of Cambridge and Oxford (both located in the UK), as well as the University of Tokyo and the University of Toronto. Major international for-profit education companies include Berlitz International (owned by Japan-based Benesse); Navitas (Australia); New Oriental Education & Technology Group (China); and NIIT Limited (India).

The novel coronavirus pandemic compelled a significant change in the usual school operations. Communities under lockdown or quarantine for public health safety caused temporary class suspension. Several considerations have been made to accommodate the need for education during the pandemic situation, such as distance or remote learning. Some institutions received funds under the Higher Education Emergency Relief Fund (HEERF), as established by Section 18004 of the Coronavirus Aid, Relief and Economic Security (CARES) Act.

A worldwide shortage of teachers, especially in developing nations but also impacting wealthier countries, has had a significant impact on education services in many countries. Globally, about 70 million new teachers are needed to reach 2030 goals, according to the United Nations Educational, Scientific and cultural Organization. Regions with the largest shortfall of teachers include Africa and the Middle East.

The high cost of education makes it difficult for developing nations to attract, train, and retain teaching staff. The estimated national average of teacher salary for the 2022-2023 school year is about $65,000, based on the annual report of National Education Association (NEA). Teacher compensation represents at least half of the government expenditure on all levels of education, according to UNESCO. The organization estimates that 250 million children, adolescents, and youth are not attending school. Sub-Saharan Africa has the highest out-of-school rates for all age groups as well as the highest rate of exclusion. UNESCO reports success from education reforms in other regions, but an overall lack of progress is attributed to high population growth in Africa and declines in global education aid. Other UNESCO education goals include promoting literacy and reducing education inequalities among ethnic minorities, women, and disadvantaged populations.

Youth unemployment is another demand driver for education services, as young people are disproportionately impacted by a lack of education compared to older, most established workers. The COVID-19 pandemic has contributed significantly to the number of unemployment among youth. Globally, there are more than 64 million unemployed youth and 145 million young workers living in poverty, according to S4YE’s webinar. Meanwhile, the number of young people who are in neither employment nor education and training has decreased slightly in 2020, according to the 2023 statistical report of the International Labour Organization (ILO).

Companies that offer career training and certification courses may find growth opportunities in Europe. The vocational education and training (VET) tradition is well-established in the region, especially in Austria and Germany, according to the OECD. VET courses are set up as a public-private partnership with companies that provide the hands on training to help students transition from the classroom to the workplace. These programs benefit from the joint interests of employers, trade unions, and schools to create a well-trained and educated workforce.

US public school salaries for teachers vary by state and account for most of the variation in spending per student across the country. In 2022, places with the highest spending per student in public primary and secondary schools in recent years were New York, the District of Columbia,?Vermont, New Jersey, and Massachusetts. Meanwhile, states with the lowest spending were?Arizona,?Missouri, Mississippi, Utah, and Idaho, according to Statista. Public and private K-12 schools, colleges, and universities are distributed according to population density, with the highest concentrations found in?California,?New York,?Texas,?Florida, and?Illinois.

Education and training services are particularly prevalent in California, New York, Florida, and Texas. About 1.5 million Californians enrolled in career and technical education (CTE) courses, about 640,000 were in secondary enrollment, and about 930,000 were in postsecondary, according to the data of Advance CTE. States with the highest per-capita CTE enrollment rates include North Carolina, Mississippi, Nebraska, and Washington. Per-capita enrollment is weakest in Washington, DC; Pennsylvania; Maine; and Vermont.

In the US, the number of kindergarten to Grade 12 enrollment reached about 53.7 million in 2022; about 47 million of which were in public schools, and about 6.7 million in private schools. The college enrollment in 2022 is about 16.5 million; about 12.7 million of which were in public colleges.

K-12 public and private schools provide age-appropriate instruction in a variety of subjects and skills, which are aligned in a set curriculum for each grade. Community colleges, four-year colleges, and universities provide educational instruction in degree- or certification-granting programs in many disciplines. For-profit educational institutions offer programs that may take one or two years to complete in highly specific career paths such as nursing, culinary arts, or computer-aided drafting. Professional training companies offer short courses resulting in certification in a job-specific skill, such as computer programming.

The US education sector gets their revenue from trade, career, technical and professional development, which account for about 35%, followed by leisure, recreational, and athletic instruction (20%) and educational support and consulting services (20%). Other revenue sources include private contributions, gifts, and grants; academic tutoring and customized learning programs; and basic education and skills programs.

Most public schools and universities have oversight from a board made up of community representatives or industry advisers. Members are appointed by public vote or governing bodies, and the boards are often responsible for broad policy decision-making and fundraising efforts.

Technology

Distance learning has gained popularity over the years, and together with it is online education as a mode of learning. With Internet and devices like computer, laptop, and mobile phones, students can access a variety of learning materials and teachers can conduct online sessions as well. Many public schools include computer lab time and training, and some schools use tablets and other electronic devices in classrooms daily. Maintaining efficient information and communication technology (ICT) infrastructures becomes an essential part of the usual school operations. Moreover, the global online education industry is expected to reach about $175 billion by 2030, according to SkyQuest.

Colleges and universities also use computer systems for administrative and communication functions, which allow the students to complete applications, enroll in courses, acquire classroom materials, review recorded lectures, and converse with teachers and administrators through a campus-wide network. Public school districts have adopted administrative technology systems to manage enrollment, student schedules, assignments, and grades, as well as parent communications. Private primary and secondary schools often spend heavily on classroom and administrative technologies to attract new enrollees.

Funding-related challenges have a major bearing on competition at every level of the education sector. Public K-12 school districts are vulnerable to state budget cuts, declines in local property tax revenue, and increasing federal support for alternatives to traditional public schools. Sharp declines in enrollment, caused in part by rising tuition costs, are stifling revenue growth at many colleges and universities. Career and technical education providers are benefiting from growing community investment in vocational training, but tighter government regulation of for-profit trade schools has forced several institutions to close in recent years. Regulations regarding public health safety, such as community lockdown due to pandemics, can also impact the school operations.

Improved data-tracking methods and other technology advancements are helping education providers better meet the needs of individual students. Universities and private-sector education companies are improving their online course offerings with features that make distance learning more accessible and interactive. Student interest in studying abroad remains strong, and international students are attending American schools at higher rates.

Charter, magnet, and private K-12 schools market themselves to families of students who would otherwise attend traditional public schools. Education and training service companies compete with traditional community colleges and four-year bachelor’s degree programs, as well as a growing number of consumer products that are making it easier to learn at home. Large educational institutions can benefit from government support and significant endowments. Smaller institutions can compete by specializing or providing superior service.

Competitive Advantages:

School Choice — The federal government and several states in the US are showing increasing support for alternatives to traditional public K-12 education, such as private, charter, magnet, and virtual schools. School choice policies generally allow families to use their child’s share of state education dollars — in the form of vouchers, tax credits, or education savings accounts — to cover some or all of the costs of attending alternative institutions. Public school districts may be vulnerable to funding cuts if they lose a significant number of students to competing institutions.

Tuition Costs — Rising tuition prices are curbing enrollment growth at colleges and private K-12 schools as prospective students become more price-sensitive. Reducing tuition and student fees and increasing financial aid awards have helped some institutions improve affordability and stem enrollment declines.

Meeting Job Market Demand — Colleges, universities, and for-profit education providers update their course offerings and curriculums to align with hiring trends. Institutions that provide degrees and certifications for occupations such as data analysts, medical assistants, and health information technology professionals, for example, are benefiting from rising demand for workers in those fields.

Instructional Technology — Educational institutions can appeal to students and increase enrollment by offering online courses with a range of modern education technology tools. Some providers offer blended classes that incorporate both online and classroom instruction. Companies must regularly update software and features to maintain a high-quality experience for students.

Companies to Watch:

Apollo Education Group provides educational programs through a number of subsidiaries, including the University of Phoenix, which accounts for about 80% of the company’s sales. Apollo offers a wide range of certificate and degree programs in the US, the UK, South Africa, and other countries.

Career Education Corporation (CEC) is a for-profit provider of education and training in areas including information technology, health education, business studies, culinary arts, and visual communication and design. The group’s operating names include Colorado Technical University, Sanford-Brown Institutes, Le Cordon Bleu, and American InterContinental University.

Kaplan, owned by Graham Holdings, is best known for courses and publications that prepare students for exams such as the SAT, GRE, LSAT, and MCAT.

Sales & Marketing

Public schools depend on funding from local, state, and federal government sources. Private schools are highly dependent on tuition payments and donations. Cash flow is often very seasonal, because tuition is collected at the beginning of each semester while expenses are paid out throughout the year. Colleges and universities rely on a mix of government support, endowments, and tuition and fees. For-profit institutions are highly dependent on their students qualifying for student loans. The industry is labor-intensive: average annual revenue per employee in the US is about $25,000.

The education sector in the US is highly regulated at the local, state, and federal level. Public and private K-12 schools are subject to state requirements regarding test scores and other achievement standards. Postsecondary institutions are subject to federal regulations, in particular Title IV of the Higher Education Act, which oversees eligibility for financial aid reimbursement.