When we talk about the education industry or the education business, we see that it comprises of organizations and business which play an important role in supporting education. The education business includes charter schools, after-school tutoring services, educational content providers, special education services, school improvement services, professional development for teachers and, of course, the fast-growing arena of online education.
The Education market in the United States of America is the one of the biggest investment markets in the US because of which investors’ rush to get shares in the education market. It represents 9% of the US’s gross domestic product. There is an increase in the online education business, called Massive open online courses since more and more people are registering online for courses. Two big giants Pearson and Murdoch’s Newscorp have begun to penetrate deeply in the education business.
The Federal and State expenditures in the education sector go beyond $750 billion. Education companies represent a large sector in the education industry. Their annual revenues exceed $80 billion.
It is said that the Education business in the US is worth $1.3 Trillion and is usually broken down into 4 major sectors namely,
- Early Childhood education which is estimated to be worth around $70 billion,
- K-12 which is worth around $ 670 billion,
- higher education which is worth approximately $475 billion,
- Adult learning or continued education which is worth approximately $55 billion.
Each of these 4 major sectors of the education business mentioned above are further broken down into the following three categories:
- Test preparation also known as tutoring which is estimated to be worth around $1 billion and if you include higher education in it then it is worth around $5 billion.
- Online post-secondary is worth approximately $20 billion.
- Textbooks are worth approximately $5.5 billion just for higher education. It is a $25 billion market overall.
Almost 9% of the United States GDP is spent on education which is the second largest market after healthcare. There are approximately 100,000 public schools 4,000 charter schools in the K-12 space and approximately 30,000 private schools with 6.2 million students in them. If we assume the tuition to be a very modest amount, let say $5,000 per student, the total for yearly tuition would go up to $31 billion. Approximately 19 million students were enrolled into universities for higher education as per a report from 2009 for an average of $10,000 tuition which totals up to $190 billion for yearly tuition.
Reports have shown a promising market for e-learning which can be understood as using electronic technology to aid learning including network-enabled technologies and computer assisted learning. Currently, only a very small amount is spent on e-learning education business since it is still an emerging market. It is seen that for e-learning markets a comparatively bigger amount is spent on post-secondary educations sector as compared to the others. The online education business is growing rapidly and is a good area for investors to spend on. Considering education market is the second biggest sector in the US, and obviously online education is a part of it, it will definitely grow a lot and will reap good returns for investors who invest in this emerging market.