Education Business In U.S.A.

Press, Volume CVI, Issue 31231, 1 December 1966, Page 20

Education Business In U.S.A.

Some of the most enthusiastic educational innovators in the United States today are not primarily educators or psychologists. They are private businessmen. The most obvious reason is that education is one of the most dynamic “growth industries” in the United States economy. The portion of each American’s life that is devoted to education is increasing steadily as Americans start to school earlier in life, stay in it longer and come back to it more frequently. Americans are demanding an even higher quality of education, and higher quality generally means higher costs. Americans are looking to education to bring better opportunities to those who have suffered from poverty, racial discrimination or cultural handicaps. These trends are forcing expenditures for education to grow faster than the population. Much of the increase will go for books, other educational materials, an exploding array of specialised machinery and equipment, new and more modern educational plant and a variety of new educational services—all of which private industries are well suited to provide. The “knowledge industry” in the United States includes

not only formal education in schools, but also other kinds of activities helping to produce, transmit and transfer knowledge: research and development, publishing, motion pictures and television, job training, telephone service. Some experts estimated that in 1963 the output of this broadly defined “industry” totalled $195,000 million and had increased 43 per cent in just five years. It employed more than a third of the entire non-farm work force of the United States. Huge Market Even when education is more narrowly defined, its size and growth in the United States in recent years is no less startling. Expenditures for schools and universities were estimated at more than $35,000 million in 1965, a tenfold increase over the $3400 million spent in 1940. Add the amounts spent for education and training in private industry and in government and businessmen figure that education and training represent a $50,000 million market. If a firm is to be successful in obtaining a part of this growing business, it must be highly innovative. American education in the sixties is an industry in which products and techniques are changing rapidly and competition is spirited. Many hopeful new firms have been set up to exploit some new development in educational technology. Many old and well-established firms are branching out into educational fields in the conviction that there they will find future growth possibilities. Defence and space engineering firms see education as a promising place to go when government contracts for defence and space exploration start .drying up. Some of them have already won contracts to run Job Corps camps set up by the Federal Government to provide basic education and job skills to poorly-educated youths. But prospects for profitable sales are not the only reasons United States private businessmen are interested in educational innovation. An even more compelling reason stems from their positions as major customers for educational goods and sendees. Conditions, techniques and products change so rapidly in a modern, science-oriented economy that re-educating and retraining workers and managers becomes a continuing and expensive problem for many firms. They are hungry formore efficient ways to do the job.

Consider the needs of a nation-wide insurance firm that must constantly train new people for its sales force. Whether the firm brings all its new salesmen to a central place for training or sends its training staff touring over the country seeking out the new personnel, the cost is high.

Then consider the much more difficult problems of a manufacturer in the highlycompetitive and fast-changing business equipment field. New types of office machines and computer equipment are being introduced constantly. Each time there is a change, new production jobs must be learned and technicians in distant cities must learn now how to service the new machines. As the pace of technological change accelerates, the need for continuing—almost continuous—education and reeducation becomes more and more critical. Scientists and engineers in all fields have a hard time keeping up with the flood of new knowledge that is being produced by modern research. Top business executives, too, find that much of what they need to know to keep abreast of their competitors was not even thought of when they were full-time students. People such as these need a way to “go back to school” without actually leaving their jobs for any extended time. Training Costs To assess the cost of education, business firms have to account not only for direct costs, but also for the time their workers, engineers and executives are away from their jobs and for the travel expenses for employees who go out of town to take their training. These industrial consumers of education are willing to try new methods and invest in expensive equipment if they seem likely to pay off by shortening the time high-paid personnel have to be away from their jobs for training. One of the most popular answers to education problems in business has been programmed instruction, a system of self-instruction employing a very highly developed type of work book. United States industry has also served as a testing ground for many other new ideas in education, and the market represented by business and government has encouraged the development and marketing of a great diversity of educational devices of advanced design. Much of this new technology will find application in ordinary school classrooms as well.