Child Care Services
Companies in this industry provide supervision and educational programs for pre-school and school-age children. Major US companies include Bright Horizons, KinderCare Education, and Learning Care Group; major companies based outside the US include Elbkinder (Germany), G8 Education (Australia), and Partou (the Netherlands).
Global demand for child care services and early childhood education is growing as a result of increases in the number of women in the workforce and the number of single-parent families, as well as reduced poverty and improved health services. The Organization for Economic Cooperation and Development (OECD) reports about 90% or more of children aged 3-5 in the majority of OECD countries are enrolled in early childhood education and care or primary school, with the OECD average enrolment rate 87%. Enrolment rates are high in France, Korea, Luxembourg, and the Netherlands.
The US child care services industry includes about 80,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $40 billion.
Competitive Landscape
Demand is driven primarily by growth in the youth population, and secondarily by employment and income. Recognition of the importance of early education is also driving demand for high-quality care. The profitability of individual child care facilities depends on good marketing, reputation, and efficient operations, as well as how saturated the local market is. Large companies have economies of scale in advertising and administration. Smaller companies can compete effectively in local markets by owning convenient locations. The US industry is highly fragmented: the top 50 companies generate about 15% of revenue.
The number of families with two working parents is increasing. In 2021, about 80% of mothers with children under the age of 6 participated in the workforce in the US. Child care centers compete directly with nannies, many of which are employed full-time and don't live on premises.
Products, Operations & Technology
Major services include child day care services (about 70% of revenue) and basic education and skills program (about 10%). Other sources of revenue include
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