Why education lacks R&D investment

New York raised the state charter school cap to improve its Race to the Top chances, “but the union-backed (Assembly Speaker Sheldon Silver) also snuck in a provision banning high performing for-profit school managers,” writes Tom Vander Ark on Ed Reformer. The hostility to the private sector explains why there’s so little private R&D in education — and why “we’re 15 years behind on learning tools development compared to advances in other sectors.”

“Students at nine of 10 for-profit charters recently outperformed surrounding districts schools in math and reading on standardized tests,” the Wall Street Journal notes. But the for-profits won’t be able to open new schools under the bill.

In Oregon, there’s a move to eliminate virtual charter schools in favor of “one single, state government-run program,” writes Vander Ark.

In addition to squashing choice, these attacks reduce private investment in education. Fifteen years into online learning, students still slog through digital textbooks when they should have their choice of engaging and adaptive learning experiences. Next gen content will take investment, but why would companies like K12, Connections, KCDL, and Apex spend $50-100 million to produce second generation content when states continue to attack their basis of existence?

School of One: Toward the Killer App has more on developing technology to engage and educate students.

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  1. There *is*, though, quite a bit of money spent on university & nonprofit educational research, though the quality of much of it is more than questionable. But when solid results *are* achieved, they are often ignored by the educational bureaucracy.

  2. What is the basis for believing that for-profit companies are adding valuing, as opposed to selecting out (by one means or another) the students upon which they can derive profit?

    If the goal of a for-profit company is to generate profit, wouldn’t their innovation be focused on ways to generate profit? I understand that many want to try to harness that in the service of students and education, but where in the evidence — or even well developed theory — that that actually works?

  3. generating profit can also come from using resources more efficiently.

    no students or poorly performing students will yield no profits, so goals aren’t automatically out of kilter, coelaf.

  4. Joanne,

    Thanks for the link to the Ed Reformer article.


    You might fimd answers to your questions on the role of the system of markets and profit generally in Thomas Sowell’s __Knowledge and Decisions__ or Milton Friedman’s __Capitalism and Freedom__. Myron Lieberman discusses the role of market incentives in the education industry in __Privatization and Educational Choice__.

    “Profit” is a bookkeeping term, the difference between total revenues and total costs. An organization which has no line in its balance sheet for profit must attribute all revenues to costs. This says nothing about the motivations of people in the organization.

    Joel Fried
    Pots and Kettles: Governance Practices of the Ontario Securities Commission, part 2 The Government’s Principal – Agent Problem.

    Governments do not need to recognize “profit”; they could tax every monetized transaction. Markets do not need “profit”; contracts with investors could promise a percentage of receipts or a percentage of the amount lent (like a bond). A tax on “profit” allows a business to shield some revenue by deduction as “cost of research” or “cost of capital expansion”.

    A market economy (a legal system which protects title to property and, by extension, enforces contracts) calibrates the rewards for the solution to resource allocation questions to the magnitude of the resources at issue and the urgency of the question. “What do you want to eat for lunch?” is a question which becomes more urgent with every hour that passes since your last meal and which involves, over a nation of 300 million people, hundreds of millions of dollars worth of food and prep time. A marginally better answer, such that several thousand people will spend an additional dime on lunch, or which saves a dime for each meal served to several thousand people, can make the person who finds that answer wealthy.

    “What History (or Math, or poetry, etc.) should thirteen year-olds study?” is as inappropriate a question for a State (government, generally)-monopoly enterprise to answer as “What size shoes should thirteen year-olds wear?” would be, as becomes obvious when you rephrase the question: “What Math material should my neighbor’s 13 year-old daughter study?” (what size shoes should she wear?). Remote authorities do not know this child. There is no good argument for taking from her mother the power to answer this question.

  5. why on earth do we care if the people running the school make a profit as long as the kids don’t have to pay, and the results are good?

    Is it accountability? Have you ever tried to hold a local school board accountable (at least without a union backing you and a threat to strike)?


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