The Economist on the 1 August ran an article on ‘Low-cost private schools’, we took out 5 comments from the article that school suppliers need to know and think about.

  • In 2010 there were an estimated 1m private schools in the developing world. Some are run by charities and churches or rely on state subsidies. But the fastest-growing group are small low-cost schools, run by entrepreneurs in poor areas, that cater to those living on less than $2 a day.
  • Private schools enrol a much bigger share of primary-school pupils in poor countries than in rich ones: a fifth, according to data compiled from official sources, up from a tenth two decades ago. Since they are often unregistered, this is sure to be an underestimate. A school census in Lagos in 2010-11, for example, found four times as many private schools as in government records.
  • UNESCO, the UN agency responsible for education, estimates that half of all spending on education in poor countries comes out of parents’ pockets (see chart below). In rich countries, the share is much lower.

Parents out of pocket

  • One reason for the developing world’s boom in private education is that aspirational parents are increasingly seeking alternatives to dismal state schools. In the south and west Asian countries, half of children who have finished four years of school cannot read at the minimum expected standard. In Africa, the share is a third.
  • Many poor countries have failed to build enough schools or train enough teachers to keep up with the growth in their populations. Half have more than 50 school-age children per qualified teacher. And though quite a few dedicate a big share of their government budgets to education, this is a low tax base. Some money is siphoned off in scams such as salaries for teachers who have moved or died, or funding for non-existent schools. Since 2009 Sierra Leone has struck 6,000 fake teachers off its payroll by checking identities before paying salaries. A national survey in Pakistan recently found that over 8,000 state schools did not actually exist.
  • A study by the World Bank found that teachers in state-run primary schools in some African countries were absent 15-25% of the time.

If you are a school supplier are you prepared for this growing low-cost private school market?
With governments not delivering a high enough level of education in developing countries we can expect that more and more low-cost private schools will be started. Like any other school, they need suppliers with affordable options.

Are you prepared to service these schools, can you reach them and are your products and services geared for them? This is a growing market that has needs.