The Competitive Market in Public / Private Education.

The Competitive Market in Public / Private Education

Driven within OECD countries by endogenous economic growth theories that identify Public Education Reform as key to:

increasing the productive and allocative efficiency of human capital development

increasing national economic growth through expansion of the service sector

increasing service sector exports - public education products and services

increasing the level of technology transfer

Fiscal Policy Reform: decrease government financing of public education increase opportunities to derive government revenue from public

education through valued added taxes, goods and services taxes, export revenue

Monetary Policy Reform: follow principles of Modern Public Debt Management shifts public education financing to the capital markets to reduce

the level of public debt government provides credit enhancement and other guarantees

to attract investors to public education sector equity and debt financing

Structural Policy Reform: Create Markets

government regulations and laws that ensure the development, ongoing operation of, and investment in, public education as an industrial sector – competitive international Public Education market

Endogenous economic growth theories suggest competitive markets as the most efficient mechanism for ensuring economic growth

OECD countries systematically move public education from a government monopoly to an internationally competitive sector of the economy

Step One: Education Laws and Regulations Necessary for Functioning Markets Monetization – establish fees/prices for public education markets to develop Re-regulation – allow private and for-profit public education services Assign Property Rights - intellectual property, copyright, ownership within public education

Step Two: Capital Market Financing of the Public Education Market Government Financing of Private Enterprise within Public Education: Technology Transfer Capital Market Financing – Equity: Private Education Companies, Bonds: Public Universities

and Securitization: Student Loans Government attracts investors through loan guarantees and credit enhancement

Step Three: Government Development of a Competitive Domestic Market Government funds cost recovery programs and vouchers in public education systems Government funds private education start ups – private K-12 and postsecondary

institutions

Step Four: Government Develops Export Markets Government supports international marketing of education products and services

Step Five: Government “Locks In” Public Education Exports – Irreversibility International Trade Agreements / International Investment Agreements for Public Education

Competitive International Markets in Public Education increase:

Human Capital Productive Efficiency development of the productive capacity of labour in all areas of

the national economy through the development of a lifelong, seamless, quality education system

Human Capital Allocative Efficiency mobility of students, faculty and staff between domestic and

international education institutions and programs articulation, recognition and transfer of qualifications between

domestic and international education institutions domestic and international qualification frameworks to support

labour market mobility of all workers cross border trade of education goods and services to increase

the opportunities for, and quality of human capital development

Competitive International Markets in Public Education increase:

the size of the service sector of the national economy by increasing the demand and supply of domestic and international public education products and services

the value of national economy through exporting public education products and services and importing quality foreign public education products and services, developed in a fully regulated, competitive international market in public education

ongoing growth of the public education domestic and export market through product differentiation, price differentiation and aggressive, government coordinated and funded marketing strategies

Competitive International Markets in Public Education increase:

intentional actions of people to improve themselves – lifelong learning

improvements in organizations – quality management systems

levels of innovation – Research & Development

productivity – less cost per unit, new and improved methods

efficiency – lower transaction costs, increase transparency, eliminate barriers to entry and exit

knowledge transfer – eliminate systemic, administrative, social, political or ideological obstacles to communication, distribution, and adoption of beneficial technology

OECD countries have competitive advantage in the International Markets in Public Education:

First mover advantage (United States, United Kingdom):identified public education sector as a new area for liberalization and instituted market development program in the 1970s – high level of exports to developing countries

Late developers (Canada, Australia): catching up with first movers since the 1990s by following their development strategy – increasing exports to developing countries

Non developers (Non – OECD countries) have had their domestic public education market increasingly served by international competitors – imports only

OECD Governments support competitive advantage of their Public Education product and service providers

United States Information Service: 211 offices in 147 countries to promote U.S. education and training

services

Australia: 30 overseas education offices as early as 1996 launched a $700 000 promotional campaign in key

Asian markets, and committed $18.5 million to promote its education and training services internationally

British Council: most successful country – markets UK education and training services coordinated, on site, central approach to international marketing 228 offices and 95 teaching centres in 109 countries estimated that education and training exports account for 4 percent of

invisible exports of the UK economy

France: Alliance Française has 1,058 associations in 132 countries acts as an indirect marketing channel for French education and training

services

Current UAE Public Education Reform reflects the effectiveness of OECD Public Education Reform:

provides a regulated market for international competitors

retains government national public education institutions allows foreign direct investment allows cross border trade regulates public education market participants provides increasing levels of transparency to eliminate

information asymmetry supports technology transfer supports the allocative and productive efficiency of

human capital development buys / imports public education products and services

Follow the OECD Public Education Reform approach? Decrease government expenditures and increase government

revenue as a result of public education reform ? Government and/or capital market financing of public education

reform? Import and/or export of public education reform products and

services? Develop internationally competitive UAE Public Education

products and services through public education reform? Continue to develop these Public Education Reform

activities? Elimination of Information Asymmetry - Rankings Quality Assurance - Government, Third Party Inspections

International Institutional Accreditation International Teacher Professional Accreditation International Curriculum Standards

World Pricing and/or government subsidies Product Differentiation, 1st, 2nd , 3rd, 4th degree Mobility – Internationally aligned National Qualification

Framework for Articulation, Recognition and Transfer Lifelong Learning - Portfolios