This document provides an executive summary and key findings of a report on transforming the U.S. education system. It identifies several drivers of change including poor student performance, high costs of higher education, and an inability to accommodate non-traditional students. It outlines trends like the growth of charter schools and cuts to education budgets. Emerging opportunities discussed include the use of data analytics, online learning resources, and innovative tools for creating engaging content. The strategic implications highlighted are that the large and complex U.S. education market requires well-defined opportunities, and players may benefit from alliances to effectively compete in the evolving landscape.

1. Transforming the Landscape of U.S. Education and Learning
Final Report December 2011
Eilif Trondsen, Ph.D.
Director, Strategic Business Insights
etrondsen@sbi-i.com
www.strategicbusinessinsights.com
Executive Summary & Key Findings
1. Drivers of Change
_ Poor performance of US students absolutely and relative to those in other countries (but as noted in footnote,
student performance is highly correlated to socio-economic conditions and significant differences therefore exist
across the United States).
_ , transformational
change is needed, especially in K-12.
_ Higher Education (HE) is also under scrutiny, due to high cost (which has risen rapidly: 35% in real terms, over
the last five years, according to the College Board, or at a faster rate than personal income, consumer prices and
even health insurance) and many students graduating with high debt but unable to get good jobs, or any job at all.
_ US HE is unable to adequately accommodate large and growing number of non-traditional students with the kind of flexible offering they want and need.
_ clea
significant impact, if used properly and under the right conditions.
2. Trends & Issues
_ The US has seen strong growth of charter schools which have greater freedom to operate differently from
regular K-12 schools.
_ Cuts in education budgets in most states and local districts as result of state of economy have resulted in layoff of
teachers, cutback in services and classes--and this situation is unlikely to change quickly. Public universities,
such as the University of California System, have been forced to raise tuition sharply.
_ , but with mixed
results (as some online schools have been accused of poor operating practices and poor student outcomes).
_ Growing concern about, and emphasis on, attracting students to STEM fields as US policy makers worry about
loss of US international competitiveness if we don't have more student in STEM fields (especially as US
competitors see growing number of STEM students).
_ ,
practices will likely continue. But growing interest in leveraging innovative practices in
using data for "adaptive learning" (where learning processes and activities are driven by student profile and realtime
performance data).

2. 3. Evolving Learning Industry Landscape & Value Webs
_ Rising interest in "edupreneuring" (entrepreneurial activities focused on education) with result that new and
innovative startup companies are becoming active. Universities, such as USC and Stanford, have recently
created chairs in their schools of education focused on innovation, technology and entrepreneurship.
_ But large, incumbent players such as Pearson (which has been especially active on the M&A front) are also
acquiring small and innovative companies as well as making alliances and coming out with new and innovative
products and services.
_ Hybrid models (using technology in varying degrees) are gaining popularity at all levels of education, enabling
new forms of flexibility in what they do and how they serve their students
_ (as well as more traditional player, such as HP,
will likely play a role in shaping future of education, both directly and
indirectly.
4. Emerging Opportunities
_ Data and analytics are gaining prominence and importance and will result in growing number of products and
.
_ Learning resources are exploding, especially online, but many are free and therefore raising issues about how
sustainable the business models are.
_ Innovative, cost-effective and easy-to-use tools for creating dynamic and engaging content/courses will become
growing opportunity in education and learning, at all levels.
_ Growing opportunities are also emerging around use of social media for learning as well as mobile-, game-, and
simulation-based learning and particularly for use on tablet devices that have seen rising popularity.
5. Strategic Implications
_ US market for education and learning products and services is very large, complex, dynamic and highly
fragmented so new entrants must find well-defined targets of opportunity.
_ New entrants may want to explore pros and cons of teaming up with, or forming alliance with, larger, stronger
incumbent players, or even with smaller and innovative players that have complementary
product/service/technology offering.
_ Learning industry players need to understand the emergence of (technology-based) learning platforms and what
the competitive and strategic implications will be as these platforms evolve.
DM#900075