opinion

Help Me Help You: How Policymakers Can Support Educational Entrepreneurship

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For those who believe in the power of technology to transform education, there is a lot to like in the U.S. Department of Education’s recently released National Education Technology Plan. The report calls for states and districts to adopt high-quality openly-licensed educational materials, implement universal design principles, improve technology-based assessments, and much more—all very much needed in U.S. schools. However, missing from the report is a discussion about the barriers facing educational entrepreneurs as they try to bring these types of innovations to the classroom.

Over the course of the last year, as an education policy consultant and the chair of the Wharton Education Network, I’ve spoken with dozens of education entrepreneurs to try to better understand these barriers—and how smart government policies could make it easier for entrepreneurs to contribute to educational innovation.

What I’ve learned from that research, and from my own experience as an education entrepreneur, is that two types of barriers exist: "Supply Barriers," which prevent new organizations from launching, and "Demand Barriers," which prevent new organizations from growing to scale. Below is a breakdown of the most commonly cited barriers.

Supply Barriers

  • Permission to Operate: New organizations are often formally restricted from participating in the market or their access to the market is constrained by the need for legal approval to enter (e.g., authorization of a charter, procurement of a license, etc.).
  • Procurement Process: Within some K-12 product categories, long sales cycles and complicated procurement processes present a barrier to new organizations by creating upfront costs that are disproportionately large relative to the revenue of a new organization. In some cases, procurement is so onerous that only the largest and most sophisticated companies can successfully navigate the process—sidelining innovative upstarts.
  • Investment Capital: Despite significant government funding of K-12 education, only a relatively small portion of that funding supports entrepreneurship in the form of R&D investment or potential revenue streams. Private investment is also light, with K-12 venture capital significantly under-weighted relative to the size of K-12 spending. This proportionally low level of investment spending constrains K-12 entrepreneurship by limiting the amount of experimentation that can take place.

Demand Barriers

  • Purchasing Incentives & Constraints: Government regulations and collective bargaining agreements that dictate how things should be done, rather than what should be achieved, inhibit entrepreneurship by constraining government officials’ purchasing flexibility and by shaping their incentives. Similarly, some funding streams are only available for specific purposes—limiting the flexibility with which they can be deployed.
  • Efficacy Data: Successful businesses thrive by effectively differentiating themselves relative to their competitors’ offers and their customers’ needs. In education, sound efficacy data is a critical, but often missing, element that K-12 customers need to make sound decisions. This data is scarce for many reasons and its absence hurts the strongest companies by limiting their ability for differentiation.
  • Suspicion of Private Operators: Some in the education field are uncomfortable with private (for-profit and non-profit) participants playing a role in the K-12 sector. This general suspicion—which is not entirely unfounded—impacts the environment for entrepreneurship by influencing each of the factors discussed above.

While the barriers to educational entrepreneurship are complex, the solutions don’t have to be. In fact, there are several actions we can take—particularly at the federal level—that could make a difference in reducing these barriers.

  • First, the federal government should develop a set of toolkits to help states address supply and demand barriers at the local level. These toolkits, supported by federally funded empirical research, could include recommendations for streamlining procurement processes, removing legislative and regulatory barriers to entrepreneurship, and building market-friendly policy solutions.
  • Second, the federal government could develop a robust infrastructure to support efficacy research on educational products—moving well beyond the current work of the What Works Clearinghouse. Such a capability would enable state and local leaders to make smarter purchasing decisions.
  • Third, the Departments of Education and Commerce could use their bully pulpits to communicate the benefits of educational entrepreneurship. This could help reduce suspicion of private operators and help to expand the pipeline of human capital in this area.
  • Finally, these government actions need to be paired with responsible action on the part of the educational entrepreneurship community. Trust can’t be given; it can only be earned over time. As a community, educational entrepreneurs should—as so many do—hold themselves to the highest ethical and quality standards.

The 2016 National Education Technology Plan outlines a set of bold and exciting goals, but we as a nation will need all the help we can get to accomplish them. By understanding, and addressing the barriers faced by educational entrepreneurs, policymakers could play a powerful role in bringing those goals much closer to reality.

Jay Bakhru is an education policy consultant and a Masters candidate in Education Policy at Teachers College, Columbia University

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