First Research US Industry Profile

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Education Sector
SIC Codes: 82
NAICS Codes: 61
Last Quarterly Update: 8/5/2019
Institutions in this industry provide instruction and training to students enrolled in elementary through high schools, colleges and universities, and training centers that offer industrial, professional, and vocational programs. Institutions include public, private, and nonprofit as well as for-profit businesses.
The largest public K-12 school districts in the US include New York City Public Schools, Los Angeles Unified, and Chicago Public Schools. Major US postsecondary institutions include public university systems in California, New York, and Texas, as well as private universities such as Duke, Harvard, Johns Hopkins, and New York University; leading institutions outside of the US include the universities of Cambridge and Oxford, both located in the UK. Top for-profit education companies include Adtalem Global Education, Apollo Education Group, Career Education Corporation (CEC), K12, and Kaplan (all based in the US); as well as New Oriental Education & Technology Group (China), NIIT Limited (India), and Benesse Corporation (Japan).
Global demand for education services is growing as nations seek to educate their workforce and expand workers' vocational and technological skills. A worldwide shortage of teachers, especially in developing nations, has had a significant impact on education services in many countries.
The education sector in the US includes about 205,000 institutions and schools with total revenue of about $1.3 trillion.
Separate industry profiles about Public Schools, Private Schools, Colleges & Universities, Community Colleges, and Education & Training Services provide more detailed coverage of these industries.
Competitive Landscape
Funding-related challenges have a major bearing on competition at every level of the education sector. Public K-12 school districts are vulnerable to state budget cuts, declines in local property tax revenue, and increasing federal support for alternatives to traditional public schools. Sharp declines in enrollment, caused in part by rising tuition costs, are stifling revenue growth at many colleges and universities. Career and technical education providers are benefiting from growing community investment in vocational training, but tighter government regulation of for-profit trade schools has forced several institutions to close in recent years.
Improved data-tracking methods and other technology advancements are helping education providers better meet the needs of individual students. Universities and private-sector education companies are improving their online course offerings with features that make distance learning more accessible and interactive. Student interest in studying abroad remains strong, and international students are attending American schools at higher rates.
Charter, magnet, and private K-12 schools market themselves to families of students who would otherwise attend traditional public schools. Education and training service companies compete with traditional community colleges and four-year bachelor's degree programs, as well as a growing number of consumer products that are making it easier to learn at home. Large educational institutions can benefit from government support and significant endowments. Smaller institutions can compete by specializing or providing superior service.
Competitive Advantages:
School Choice — The federal government and several states in the US are showing increasing support for alternatives to traditional public K-12 education, such as private, charter, magnet, and virtual schools. School choice policies generally allow families to use their child's share of state education dollars — in the form of vouchers, tax credits, or education savings accounts — to cover some or all of the costs of attending alternative institutions. Public school districts may be vulnerable to funding cuts if they lose a significant number of students to competing institutions.
Tuition Costs — Rising tuition prices are curbing enrollment growth at colleges and private K-12 schools as prospective students become more price-sensitive. Reducing tuition and student fees and increasing financial aid awards have helped some institutions improve affordability and stem enrollment declines.
Meeting Job Market Demand — Colleges, universities, and for-profit education providers update their course offerings and curriculums to align with hiring trends. Institutions that provide degrees and certifications for occupations such as data analysts, medical assistants, and health information technology professionals, for example, are benefiting from rising demand for workers in those fields.
Instructional Technology — Educational institutions can appeal to students and increase enrollment by offering online courses with a range of modern education technology tools. Some providers offer blended classes that incorporate both online and classroom instruction. Companies must regularly update software and features to maintain a high-quality experience for students.
Companies to Watch:
Apollo Education Group provides educational programs through a number of subsidiaries, including the University of Phoenix, which accounts for about 80% of the company's sales. Apollo offers a wide range of certificate and degree programs in the US, the UK, South Africa, and other countries.
Career Education Corporation (CEC) is a for-profit provider of education and training in areas including information technology, health education, business studies, culinary arts, and visual communication and design. The group's operating names include Colorado Technical University, Sanford-Brown Institutes, Le Cordon Bleu, and American InterContinental University.
Kaplan, owned by Graham Holdings, is best known for courses and publications that prepare students for exams such as the SAT, GRE, LSAT, and MCAT.
Products, Operations & Technology
In the US, about 90% of kindergarten through 12th grade (K-12) students attend public schools; 10% are enrolled in private schools. At the postsecondary ... plus:
Sales & Marketing
Finance & Regulation
Regional & International Issues
Human Resources
Also includes the following chapters:
Quarterly Industry Update
Industry Indicators
Business Challenges
Trends and Opportunities
Call Preparation Questions
Financial Information
Industry Forecast
Industry Websites
Glossary of Acronyms

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