Education outside the public domain gains considerable attention across the world. In Korea, it was estimated that 71.7% of primary and secondary school students participated in private tutoring and spent 20.1 trillion won in 2011. The large majority ...
Education outside the public domain gains considerable attention across the world. In Korea, it was estimated that 71.7% of primary and secondary school students participated in private tutoring and spent 20.1 trillion won in 2011. The large majority of private tutoring is provided by education companies. In Korea, there are around 140,000 education companies and as of 2009, approximately 510,000 people have worked in the education service industry. Education companies became major players in our learning lives. However, rarely do we understand education companies and their commodities. Most previous studies about the expansion of the private tutoring market in Korea approached the issue from the consumer side, analyzing the education fever among Korean people.
In order to understand the educational market one must explore the issue from the supplier side. How did education companies grow? Who works for education companies? What are the principles of the educational market? How are education companies evaluated in the market? Such questions need to be raised. We have explored these questions with education companies in the stock market. There are two reasons we chose education companies in the stock market for this study. First, it is easy to collect data since the companies are required to open their information to the public. Second, those companies in the stock market are large enough to attract financial investment. We have been working on three studies concerning education companies in Korea; (1) The growth patterns of education companies (2) CEO’s ideas on educational market, education goods and public education (3) Evaluation of education companies in the stock market. To answer these questions, we collected data from company IR, analyst reports, articles, and books, etc. We also conducted interviews with analysts who’s in charge of education companies, CEOs and employees of education companies.
For the first research question, there are four factors which can affect education company’s growth. First, there should be enough capital. There are many private education suppliers but only a few can grow to company. A company needs capital enough to expand their business. Expanding business is also a factor which influence company’s growth. The third factor is government policies. Education companies are very sensitive to changes of government policies. And the last factor is social change like development of technology or decrease of population.
Second research question is about CEO’s ideas. They have three kinds of ideas about private and public education. First, there are good private education and bad private education. Also, they think public education is now impaired and too hostile to private education more than necessarily. This is related to CEOs’ confidence that private education is much more competitive than public education. Third, education companies which are big enough to be listed in the stock market should develop their own contents and lead the education of society. These findings show that dichotomy like public education versus private education or normative approach are not enough to understand education companies. CEOs justify their products in relation to public education or other suppliers.
Finally, study on education companies in the stock market leads to two conclusions. In the stock market, education companies are not evaluated by their products’ quality. Quantity matters - how many products and distribution channels they have. And educational policy is considered as direct influential factor to the education company’s market performance. Education goods in the market is somehow shadow of the educational services in the public sector.
This is exploratory study on education companies – they are important for researchers to understand private education, but they have gained little attention. So, from now on, there will be more studies on education companies. And this study could be an reference to those follow-up studies.