When Nancy Rose arrives at her office, she sometimes finds salespeople waiting to pitch a product to cure whatever ails her Bethel Park School District.Alyssa Cwanger, Post-Gazette
Ed and Lou Ann Hurst of West Mifflin look at SAT review books for their 15-year-old daughter at Barnes & Noble at the Waterfront in Homestead Friday evening.
Click photo for larger image.
From reading to algebra, everything in school is starting earlier
Math and reading
No Child Left Behind has altered the face of education
Performance data driving education now
Education booms into an $850 billion enterprise
Zero tolerance makes discipline more severe, involves the courts
Snacks, soft drinks banished as schools focus on nutrition
Lines blur between nonprofit and for-profit schools
Back to school in the region:
West: New technology, teachers greet pupils
North: It's a brand new year
South: Pupils return to healthier food, online learning
The assistant superintendent for curriculum gets visits from people pushing everything from an array of educational materials and software to financial advice.
Education nowadays involves more than a No. 2 pencil, paper and a book.
Nationwide, more than $500 billion a year is spent on elementary and secondary education and $350 billion on degree-granting colleges and universities, according to the federal Digest of Education Statistics.
More than a fourth of the U.S. population age 3 and older -- 75.5 million -- is enrolled in school, according to the U.S. Census Bureau.
Of course, much of education spending goes to salaries of the more than 9 million school employees.
But as schools turn to private industry to meet needs ranging from curriculum to computers -- and parents and students look for help such as tutoring and college admission counseling and guides -- business sees opportunity.
"Everyone is trying to get a piece of that pie," said Jeff Taylor, director of technology and instructional services in the North Hills School District.
Henry Levin, who heads the National Center for the Study of Privatization in Education at Teachers College, Columbia University, said, "You have some very, very marginal operators in there who are saying how can we make a buck, and you have people at the other end who are very mission-oriented and feel they're going to do good."
In recent years, the education market has been changing:
The federal No Child Left Behind Act, signed in 2002, has spawned products including tests, test preparation and curriculum, aimed at meeting the requirements that all children be proficient in math and reading by 2014.
That piece of the business is worth about $25 billion a year, said Jerry Herman, managing director of Stifel, Nicolaus & Co. Inc., a St. Louis-based broker-dealer investment firm.
The number of older college students is growing, opening new markets.
The National Center for Education Statistics forecasts that the number of college students age 25 and older will grow 19 percent between 2002 and 2014.
Eduventures, an education market research company based in Boston, estimates the for-profit post-secondary education market to exceed $18 billion this year.
The market for American higher education has become more global. Some colleges and universities have set up full campuses abroad to serve the locals, including Carnegie Mellon University in Qatar.
In addition, more than 565,000 students from abroad study in the United States, according to the Institute of International Education.
The U.S. Department of Commerce estimates education exports -- including tuition paid by the international students -- at $14.2 billion for 2005, an increase of $480 million over 2004.
Companies are spending more to train employees, including hiring outside firms to do so. Training both inside and outside corporations totaled $109.25 billion in 2005, according to the American Society for Training and Development. That compares to $55.3 billion in 1995.
Of the growth of business in education, Alan Lesgold, dean of the School of Education at the University of Pittsburgh, said, "People are making money. They make money whenever there's change. Barnacles do real well when the tide is going out or the tide is going in."
The College Board, for example, last year changed the SAT, and sales of SAT prep books "went through the roof," said Lisa Echenthal, buyer for the college guide section of Barnes & Noble Inc. bookstores.
College guides are proliferating, with specialty books in addition to encyclopedic works. The result is the typical Barnes & Noble store that used to have one bookcase devoted to study guides now has two or three.
Education, of course, isn't one big market, but is made up of many pieces, including preschool, kindergarten through 12th grade, homeschool, higher education, adult education and corporate education.
"There are clearly profitable niches in every segment," said Columbia's Dr. Levin, who also is a professor of economics and education.
Doug Lynch, vice dean at the graduate school of education at the University of Pennsylvania, said the K-12 market is highly regulated and provincial, with the state's 501 school districts essentially 501 separate markets.
But he said No Child Left Behind may create more interstate regulation, and that could open up broader possibilities. "Education may move the way of savings and loans and banking a generation ago," Dr. Lynch said.
In kindergarten through 12th grade, Eduventures figures this school year, public schools will spend $24.9 billion on services and supplies from private providers, including textbooks, tests and professional development.
Tim Wiley, senior analyst for Eduventures, said the growth rate in the K-12 market has been a steady 6 percent to 7 percent in recent years.
"There's not a market in K-12 that's ever gone down significantly, if at all," he said.
In K-12, "It's no surprise that most of the major trends today are influenced by the No Child Left Behind Act. It's really hard to have a conversation about K-12 without having No Child Left Behind creep into it somehow."
Dr. Lynch said the impact of No Child Left Behind is "significant and it's going to become much more significant. In the early days, people were just scrambling to figure it out. People couldn't even understand its implications. "
The federal act mandates annual state tests in grades 3 through 8 and once in high school. Mr. Wiley said testing is a $1.5 billion business that has been growing at 9 percent a year but may plateau unless Congress approves President Bush's plan to expand high school testing.
Eduventure's 2005 report said tutoring, test-preparation services and supplemental materials also benefited from the federal act.
The two largest categories on Eduventures' K-12 list are computing hardware at $4.5 billion this coming school year and textbooks at $4.4 billion. Both have grown in revenue and are expected to continue growing.
Mr. Herman said growth in the economy has resulted in states and local governments having more money to spend on education.
In higher education, Mr. Herman said, socioeconomic and demographic conditions have favored growth.
"The ongoing transition from a goods-producing to a service-oriented economy and one that pays an increasing premium on intellectual capital is helping to fuel the market," he said.
Long-term, Mr. Herman said he believes the largest sustainable growth will be in the post-secondary market, but at a slower rate than some for-profit schools like the University of Phoenix have experienced in recent years.
Combined, such schools grew by 20 percent a year in recent years, but Mr. Herman figures the rate will slow to about 10 percent a year. That's at least in part because the economy is better and adults are more likely to seek further education when the economy is slow. In addition, he said, online education won't have the same dramatic impact as it did in earlier years.
The growth in education business has led to some businesses expanding, both by acquiring smaller companies and by landing new business.
Pearson plc, a $7-billion-a-year business based in London, now includes brands such as Scott Foresman, Prentice Hall and Addison Wesley; Waterford Early Learning Program; and PowerSchool and Chancery student information systems. It also scores essays and scans the SAT college entrance exam.
On its Web site, Pearson describes its strategy this way:
"We believe education -- lifelong, from childhood through our working lives and into our dotage -- will be one of the great growth industries of the 21st century.
"While the developing worlds of China and India are getting younger, America and Western Europe are getting older, yet both ends of that spectrum will have to learn and go on learning.
"Our health and the cost of living and state of our pensions allow and require us to work longer than our forebears; and our economies now need workers with brainpower more than muscle power."
Some other companies also are expecting their education business to grow.
In his mid-year media review, Donald Graham, board chairman and CEO of The Washington Post Co., said that he expects Kaplan -- which offers test prep, an online university, customized curricula and other educational services -- will surpass all of the $3.6 billion company's other businesses combined.
Pittsburgh is one of Kaplan's customers, paying $8.4 million for a new curriculum.
A key player among the is the for-profit schools is the University of Phoenix, a subsidiary of the Apollo Group. The university, which offers online and classroom instruction, doubled its total enrollment and revenue from 2001 to 2005.
It had nearly 240,000 students last fall, more than triple the enrollment of the Penn State University system. Its revenues were about $2.3 billion in 2005.
The sale of education isn't limited to national borders, said Allan Goodman, president and CEO of the International Institute of Education.
"Most people don't think of education as a global business. It really has become that," he said. "In that sense, Pittsburgh is on the front lines. Most people abroad will know Pittsburgh by its medical center. ? That puts all of Pittsburgh colleges and universities on the map.
"I think you'll be very pleasantly surprised how interest in being an international student in your city will grow."
Education writer Eleanor Chute can be reached at firstname.lastname@example.org or 412-263-1955.