Conversations with Asia’s leading movers, shakers, thinkers, and provocateurs |
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In conversation with
Brian Rogove
Education ROI
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Dissecting the relative strengths and weaknesses of education in Asia is as complex and diverse as the region itself. Perhaps not surprisingly, the more developed markets of Asia including Japan, South Korea, Hong Kong and Singapore, ranked well. Less developed markets like Indonesia, Thailand, Vietnam and the Philippines, still struggle.
When it comes to public education, quality is oftentimes directly proportional to the level of government spending. Building schools and staffing them with well-versed teachers takes time and money. It’s for that very reason that large-scale private equity firms are entering the space. Baring, Blackstone and KKR are just a few of the many major investors increasing their holdings in education companies worldwide. Asia is a key focus.
My guest in this episode of Inside Asia is Brian Rogove, Founder and CEO of A-Star Education. Brian doesn’t beat around the bush when talking about education’s return-on-investment. He says that while “for-profit” education feels like a dirty phrase to those in the West, Asians see the private sector as critical in shoring up public education short-falls throughout the region.
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In financial terms, education is like healthcare. Asians who can afford it will spend an increasing proportion of their income on educating their children. The stories of Asian students and their record-breaking test scores are the thing of legend, which mightsuggest that schools in Asia are that much better than those elsewhere.
But that’s not necessarily the case. Indeed, throughout much of the region, it’s the supplementary after-school services that oftentimes give Asian students that edge. Whether its higher-math training, violin lessons or preparatory testing, there’s an ecosystem of for-profit services that feed the education beast. It’s a multi-billion dollar industry and its only just getting started.
Core curriculum, however, and the school systems that form the basis are not keeping up. This is where for-profit schools like Nord-Anglia, Cognita and GEMS are stepping in, acquiring, and in some case, building new schools in markets that can afford them. It’s a cash-flow intensive business, and as Brian points out, capture a student in K1 and if all goes well, you can look forward to 12 years of recurring revenue. The return on investment or ROI for players with capital to invest, is significant and long-term.
The ROI for students, however, is increasingly coming into question. What do I mean by this? Well, if you consider Brian’s logic, parents might justify enrollment of their child in a top-ranked school if they can determine the so-called lifetime value of that child’s future earnings. I don’t know about you, but If my parents had done this when I was a kid, I wonder if I’d be a disappointment to them today.
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But seriously, there’s a bigger question at stake and it speaks to the nature of a traditional education and whether schools are effectively equipping students for the future. Scores on standardized tests are still the litmus test for admission to Universities. Teachers – some of whom may not yet know about the Internet– are still testing for rote memorization. And parents…ah, yes, parents….they’re the biggest culprits of all. Make no mistake, for them, education isan investment. And making money…well…that’s the measure of success. Isn’t it?
That may sound crass to the Western ear, but in Asia, where we’re just one generation removed from poverty and underdevelopment, money isthe measure. An education program that can improve the odds is – in no uncertain terms - worth the investment.
If you think about it, is investment in education really any different from the purchase of a home or a stock portfolio? Get past the dis-ease associated with the idea, and it kind of makes sense.
Of course, this all assumes that the system, as we know, remains true to its historical trend. Will your home hold its value? Not if the bubble bursts. The same goes for education. What if – in the not-too-distant future – education is commoditized and advances in EdTech provide students with access to the same curriculum at a fraction of the cost. Then what?
What if there’s a backlash and rather than schools freeing a child’s mind, they’re suddenly called out for controlling or even limiting a student’s potential. Its’ possible. Stranger things have happened. Technology is disrupting industries everywhere and education is no exception.
But traditions are hard things to break. Parents who had the opportunity to attend University – and even those who didn’t - see major brand equity in a college degree. They want that for their children, and why wouldn’t they, they’re parents after all.
I hope you’ve enjoyed this episode of Inside Asia. What’s your thinking on traditional education? Is it due for an overhaul? Is the system driving us into a financial corner at a time when information is ubiquitous and learning effectively free? Let us know what you think by leaving a comment on the Inside Asia Facebook, Twitter or Linked-in page.
Review and rate this episode wherever you download and listen to podcasts. Visit us and subscribe to Inside Asia on iTunes, Stitcher or GooglePlay. We have over 100 episodes to choose from, featuring in-depth conversations with some of the sharpest and most well informed insiders in Asia. Is there a topic we haven’t covered? Let us know and we thank you for listening!
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Steve Stine
Founder & Host
Inside Asia
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Calculator: “Calculating the ROI of a College Education,” Investopia, May 22, 2018
Brian mentions in our discussion how it’s possible to do a straight-line calculation to show what investment in a college degree will yield in terms of future earning potential for the graduate. For what it’s worth, give it a try.
Survey: “Global Boom in Private Enrollments,” by Ellie Bothwell, Inside Higher Education, March 8, 2018
Shows the shift of enrolment in higher education across developing markets in Latin America and Asia
Report: “Chalenges in Integrating 21st Century Skills into Education Systems,” Brookings, Feb 5, 2019.
Points to a prevailing concern that despite shifts in future marketplace demands, that Asia education systems are particularly reluctant to waiver from traditional education and teaching methods.
Rankings: “Top 20 Countries with the Best Educational System 2019 in the World,” Current School News, May 30, 2019.
A perception-based global survey that uses a compilation of scores from equally weighted countries attributes: well-developed public education system, would consider attending university there and provides top quality education. Among the top 20, Asian countries ranked as follows: Japan (#2), South Korea (#3), Hong Kong (#10), China (#14), Singapore (#15). The United States was ranked #20.
Article: “England’s Private Schools Take Asia by Storm,” The Diplomat, February 25, 2017.
Asia Education Market Snapshots. World Education News and Review
An excellent selection of brief reports summarising the education sector across key Asia Pacific markets, including:
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Crystal Lim-Lange, a self-described “future-readiness expert.” In this episode we discuss the relative importance of a formal degree. It's the subject of scrutiny, and in some cases, derision. The universal question being asked is this: Do high schools and universities effectively prepare students for a world rife with change, disruption, and the unpredictable impact of artificial intelligence and the likely displacement of hundreds of millions of jobs? |
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Sustainable Education
| June 21, 2019 |
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My guest in this episode is Glenn Chickering, Head of Faculty at the Green school on Bali, Indonesia. Students there live and breathe the environment and all things sustainable. Raise the subject of climate change with any 4th grader here and you’ll get an earful on everything from personal accountability to corporate responsibility. Sitting in the heart of the jungle, surrounded by rice paddies and flanked by a river, there’s arguably no school like it in the world… |
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Prefer reading vs. listening? |
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If podcasting isn't your thing, or you're just too busy to take 30 minutes to listen, check out my articles here on Linked-in where I set out to summarize each week’s conversation. We touch on a wide range of topics from healthcare to finance, politics to cleantech. I hope you’ll join us. |
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Steve Stine | LinkedIn
Check out professional insights posted by Steve Stine, Senior Regional Leadership Advisor and INSIDE ASIA radio talk show host
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