Worlds of Education

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Education International

Pearson and PALF: The Mutating Giant

published 3 July 2015 updated 3 July 2015
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Education is big business. There are global, national and local businesses all seeking to profit from education and educational services. Increasingly, business, education policy and what it means to be educated are intimately intertwined.

Pearson is the world’s largest edu-business. Over the last 10 years Pearson has been involved in a process of re-invention, leading to its re-branding in 2014 as a ‘learning’ company with a vision, summed up in the strapline ‘always learning’, and with the aim of contributing to “the very highest standards in education around the world.”

This transition has at least two aspects to it. The first relates to Pearson’s repositioning of the brand as a social purpose company, one which portrays itself as having a positive, and measurable, impact on society, that of “help(ing) more people make measurable progress in their lives through learning”. The other relates to Pearson seeking to position itself as an increasingly powerful global policy actor in education - “to playing an active role in helping shape and inform the global debate around education and learning policy” (2012 annual report p. 39). But as Pearson is contributing to the global education policy debate, it is also reconfiguring the education policy problems that will then generate new markets for its products and services in the form of educational ‘solutions’.

In 2012, Michael Barber Pearson’s Chief Education Adviser, previously Head of the UK’s Prime Minister’s Delivery Unit (2001-2005) launched PALF (the Pearson Affordable Learning Fund) as a for-profit venture fund to support and encourage the development and expansion of affordable learning school chains in developing countries.

The creation of PALF is an integral part of the repositioning of Pearson as a global company rather than one focused strongly on European and the US markets. It fits into Pearson’s business strategy of venturing into new markets (geographical) and uncovering new market opportunities, in this case, a new market segment (socio-economic), moving the company away from its traditional position as mid-market and high-end operator in education. PALF has been created to develop an unconventional market niche - the need and ambition of the poor in developing countries to give their children a good education.

The main focus of investment in PALF’s first phase of activity was for-profit Low Fee Private School (LFPS) chains. PALF’s first investment was in Omega Schools, a chain of Low Fee Private Schools operating in Ghana. Another is Affordable Private Education Centres (APEC), a chain of low-cost secondary schools in the Philippines. A third investment within the LFPS chain sector in 2014 is eAdvance, a company that manages the first South African blended learning low fee school chain called Spark schools.

However, PALF’s initial focus on Low Fee Private School chains has been inhibited by the absence of appropriate investment opportunities - sustainable, innovative businesses that could provide the expected financial returns. This has resulted in a recent shift in PALF’s scope to include a more general mix of investments and a broader focus on commercial education ‘solutions’ that, as Pearson explains, “might involve new business models, investing in new technology, or testing innovative partnerships or distribution channels” (Pearson plc, 2014, p. 56).

As part of this change of focus, in March 2014 PALF made an equity investment in Zaya Learning Labs and another in Avanti Learning Centres, a provider of college entrance exam preparation for students of low-income families through a pedagogic approach based on peer-to-peer learning and self-study, both in India. This kind of investment, as those in Ed-tech more generally, also facilitate, and illustrate, the increased used of non-teacher based or blended learning pedagogies.

An important aspect of PALF’s outcomes driven ‘demonstration’ work is related to the role of technology as an enabler of scale through delivery cost savings, that is, by reducing the reliance on qualified teachers as the primary medium of instruction. There are complex and over-lapping profit opportunities in the technology – teaching equation. This has profound implications for the role of teachers. The commitments and functions of the teacher are increasingly narrowed to include only those deemed necessary for enhancing performance and outcomes, at the same time as teachers are residualised and ‘de-professionalised’.

Incubating and accelerating enterprise

More recently, the limited availability of investment opportunities at the appropriate scale and growth stage for PALF to invest in and what PALF considers as the difficulty in ‘talent recruitment’, have triggered a strategic shift towards the possibility of backing earlier stage edu-businesses with seed funding, with a view to helping to “build a stronger talent pool” and contributing to the creation and development of an enterprise ecosystem by disseminating business expertise, skills, acumen and sensibilities among education start-ups in developing countries.

With this in mind, PALF has initiated an incubator business programme - Edupreneurs. This aims to support, through a three-month mentorship programme, edu-business start-ups targeting low-income customers, to develop further and succeed as businesses. It also identifies, through a peer review and feedback process, two of the companies in each programme to receive seed funding. The programme works as a partnership between Pearson and Village Capital (VilCap), a California-based start-up incubator

The two winners of the first Edupreneurs programme in India, in 2013, were Experifun and Sudiksha, each received seed investment of USD 50,000. The winners of the second cohort based in Cape Town and Johannesburg, South Africa, in November 2014/January 2015 were Ubongo, a Tanzanian media product, and Lekki Peninsula, a low fee school chain in Nigeria.

Through these incubator workshops PALF is attempting to nurture an entrepreneurial environment within which market relations and practices are naturalised in relation to education. Through workshop activities PALF inducts its participants into modes of business thinking. By pumping investment funds into local educational economies it gives impetus to for profit ‘solutions’. This is a different form of investment, a more subjective one, an investment in discourse.

PALF as a policy actor

PALF seeks both to demonstrate the cost-effectiveness of their approach and to create a policy environment in local education systems and the global education policy community conducive to for-profit participation in education service delivery. PALF is clear about its aspiration to “demonstrate to governments and donors that low-cost private education can help educate the poor in a cost-effective way” (PALF website).

PALF envisages governments as key partners in enabling change and growth – creating the necessary regulatory and policy conditions for a market in education services. PALF has collaborated with the World Bank in research on regulatory frameworks for low fee schooling. Also, as part of the self-attributed role in policy debate, Pearson is on the board of the Global Partnership for Education (GPE) representing the private sector, and is involved in a range of advocacy activities that aim to establish for profit “affordable” solutions as a policy idea and a practical possibility. They are also a part of a broader network of organisations that aims to legitimate and expand the role of the affordable private sector as a policy solution for international development – and deploy inequality data and Millennium Development Goals such as Education for All as forms of justification for commercial initiatives.

Pearson is a publically quoted company its prime responsibility is to its share-price and shareholders – revenue and profit are the bottom line. The re-orientation of the company and its re-branding outlined above were stimulated by changing market conditions and falling revenue. Nonetheless, the effects and consequences of Pearson’s strategy is a re-working of what school is, what it means to teach and learn, what it means to be educated in the 21st century!

click here to read the full report by Stephen Ball and Carolina Junemann.

The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.