by Alan Singer
A
financial analysis for 2012 of the British-based publishing giant Pearson
is available online at 4-traders.com. It tells a very interesting, if
frightening story that needs to be more widely circulated in the United States,
especially among parents, teachers, and educational policy makers.
Something consistently missing in a report that emphasizes growth and profit is
students and whether Pearson's high tech snake oil actually promotes student
learning.* Pearson is a money making machine, but is this education?
The headline
summarizes the multi-page post. "Pearson accelerates global education
strategy: Restructuring and investment in digital, services and emerging
markets for faster growth, larger market opportunity and greater impact on
learning outcomes."
It is followed by "Financial
highlights." Sales were up 5 percent in 2012 to £6.1 billion or $9.21
billion, with "digital and services businesses contributing 50% of
sales." Operating profit in 2012 was £936 million or $1.4 billion.
But there are business problems that Pearson is
moving rapidly to address. According to
the report, "Market conditions generally weak in developed world and for
print publishing businesses; generally strong in emerging economies and for
digital and services businesses." However, there is "Considerable
growth opportunity in education driven by rapidly-growing global middle class,
adoption of learning technologies, the connection between education and career
prospects and increasing consumer spend, especially in emerging
economies."
As a result of this repositioning, Pearson's "North American Education
revenues" were "up 2% in a year when US School and Higher Education
publishing revenues declined by 10% for the industry as a whole," while
"International Education revenues up 13% with emerging market revenues up
25%." Pearson plans further restructuring and investment in
"fast-growing education markets" that by 2015 should "produce
faster growth, improving margins and stronger cash generation."
Pearson hopes to "capture the
once-in-a-generation opportunity that comes with being the world's leading
learning company... Over the past 15 years, through a major programme of
organic investment and acquisitions, Pearson
has become the leading education company in the world, with unique geographic
reach, product breadth and professional depth. More recently, we have achieved
particularly rapid growth in digital products and in education services
businesses, which together now account for half our sales... We are therefore
planning significantly to accelerate our push into digital learning, education
services and emerging markets."
To achieve its business goals, Pearson promises that its "products
and services deliver demonstrable learning outcomes to the student or the
institution. We have therefore developed the Pearson efficacy framework: a
unique, rigorous and scalable quality assurance system that checks that the
necessary conditions are in place for an education programme to deliver
intended learning outcomes. We now require that all Pearson acquisitions
and all product investments over $3m go through the Pearson efficacy framework
and set out a plan to implement its recommendations before approval."
Pearson
is targeting higher education as well as K-12 schools, but many of these
profit-making innovations can be transferred to elementary and secondary
levels. According to the report, "Student registrations at eCollege grew
3% to 8.7 million," which includes "new online enterprise learning
contracts with California State University and Rutgers University" and
continued partnership with Arizona State University.
Students register for online courses through eCollege at their own
institutions, but Pearson provides the technological house or platform for the
operation. In a budget saving move, the California state
legislature is considering requiring California State colleges to
accept online classes offered by other institutions if their own classes are
oversubscribed, a potential bonanza for Pearson and similar companies..
Pearson
is also making money with "MyLab" digital learning, which provides
students with homework help and preparation for standardized assessment,
assessments which are often designed and marketed by -- guess who? -- Pearson.
Pearson's "OpenClass," currently offered to institutions without
charge, is used by 1,300 U.S. K-12 schools and colleges.
Curiously,
revenues were flat in Pearson's "Assessment and Information business."
The report complained, "State funding pressures and the transition to
Common Core assessments continued to make market conditions tough for our state
assessment and teacher testing businesses." But there is a rainbow hidden
in the clouds. "The Partnership for Assessment of Readiness for College
and Careers (PARCC), a consortium of 23 states, awarded Pearson and Educational
Testing Service (ETS) the contract to develop test items that will be part of
the new English and mathematics assessments to be administered from the
2014-2015 school year." Pearson also won "new state contracts in
Colorado and Missouri and a new contract with the College Board to deliver
ReadiStep, a middle school assessment that measures and tracks college
readiness skills" and five Race To The Top (RTTT) state deals in Kentucky,
Florida, Colorado, North Carolina and New York).
Pearson
has been able to extract these profitable deals through a systematic campaign
of buying good will from state and local officials and educational
institutions. Pearson's
not-for-profit foundation has paid for local and state educational
commissioners whose schools do business with the for-profit Pearson corporation
to attend international conferences in Rio De Janeiro, London, Singapore, and
Helsinki where they meet with Pearson executives.
Pearson is a major funder of the American
Educational Research Association and the Association for Supervision and
Curriculum Development, sponsoring sessions at their annual conferences,
advertising and marketing in their exhibition hall, and giving away corporate
labeled "swag" to participants. The foundation hosted the welcoming
party at the 2013 South by Southwest (SXSW) Conference on
emerging education technologies in Austin, Texas, at the same time that Pearson is trying to dominate the digital
technology educational market. The foundation paired with the Gates Foundation
to develop digital learning material for state Common Core standards at the
same time that the company was marketing common core instructional material and
assessments. Pearson is developing a new national teacher certification system
with Stanford
University, and is contracting with states to administer the
program.
Money,
money, money, money, money. Profit, profit, profit, profit. No discussion of
educational philosophy, educational achievement, or student needs in the entire
report. Is this the company cities and states in the United States should trust
with the education of our children?
Oh, you would think that with all of these
profits made from the public purse, Pearson would be paying a heavy tax bill
and pouring money back into the public coffers. But you would be wrong. Pearson
was able to take advantage of a Hurricane Sandy tax deferral to significantly
lower its 2012 United States tax bill.
*Addendum, 3/21/2013: I think my basic disagreement with
Pearson Education centers around different definitions of what Pearson means by
education and educational achievement. In their financial report, Pearson does
discuss student achievement, but appears to equate it with student performance
on standardized assessments. There is a national debate going on about the
value of high stakes tests such as the ones designed and marketed by Pearson.
For me, the question is whether improving test scores through test prep
programs constitutes actual student learning and in any way reflects a thought
out educational philosophy, an understanding of educational achievement, or
meets student needs. In New York City where I live and my grandchildren attend
public school, thousands of young children participate in test prep programs,
not to learn, but to score higher on Pearson designed and marketed standardized
tests. I do not believe executives at Pearson would want this type of education
for their own children or grandchildren.
My goal is to expand discussion of education in
the United States so I would like to suggest two possible resolutions to my
disagreement with Pearson. First, I give Pearson permission to reproduce my
blogs on own their websites. This would afford them the opportunity to provide
an extended response. Second, I like the
idea of collaboration. I propose that I write an analysis of the Pearson
educational philosophy as presented on a Pearson website and that an agent for
Pearson write a response and we post them on Huffington as a joint blog. I
also welcome other suggestions from Pearson representatives for expanding
dialogue on educational issues in the United States.
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