Perspectives

Driving grades, driving growth

The global education community comes together at the WISE Summit united by a shared belief that education drives positive change for individuals and communities.

This belief is supported by numerous studies about the benefits of education: it is a vital driver of personal and national prosperity and one of the most critical levers in sustaining and propelling a nation’s economic growth. At the heart of our dialogue at WISE is an urgent question: how can we ensure that education’s benefits are felt not just in developed economies but in all countries?

Governments, of course, play an essential role in increasing access, but in many nations, increasing demand for high-quality education has led to overburdened and overcrowded public sector education systems.

Against this backdrop, private capital is increasingly being deployed to finance education, particularly in emerging markets.

In this report, EY-Parthenon explores the ways that private capital has been a game changer within the world of education:

  • Expansion: private financing can enable educational institutions and services to scale, supporting access to education for more individuals as it seeks to maximize profits through broadened service provision.
  • Innovation: given its profit motive, private capital also has strong incentives to compete and innovate. Therefore new financing of education supports research and development that drives more effective provision.
  • Outcomes: private investors also introduce a strong focus on outcomes into the education sector. Tracking and pursuing outcomes have provided a foundation for the efficient deployment of capital.

Important risks and challenges are associated with deploying private capital and investment in private education enterprises, particularly in terms of ensuring education quality and equity. Given these issues, government and other stakeholders can play a key role in mitigating these challenges through effective regulation.

Moreover, as educational institutions and services only survive if they provide value for money, it is in their best interests to focus on quality.

Download summary infographic

Download the full report

Read Mary Abdo’s blog post on the topic “Private gain, public good”

WISE Summit 2015

WISE Research Series

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Contact EY-Parthenon's Head of Education Robert Lytle or Partner Amitabh Jhingan to learn more.