Education and Innovation: The need for public-private sector partnerships in Latin America

I met Alejandra, a feisty advocate for Argentine students and workers, at a recent conference on youth employment. Short hair, tall and skinny, she was dressed in a simple t-shirt with her union’s acronym emblazed in large black letters. “Higher education is a basic right!” she emphatically said to me, and proudly pointed out how universities in her country were completely free, providing access to all who are willing to attend. “An obvious evolution of any society”, she concluded.

If you have ever lived in Latin America, you have probably been exposed to a passionate speech on the role of public education as a symbol of equality. Most countries have at least one state funded university, and some like Argentina have many.

While everyone broadly agrees that education is a critical “leveler” for society, it is less clear how the state and the private sector should share this responsibility. When I asked Alejandra and her three colleagues if they had attended a public high school, they all admitted that no, they had attended better quality private schools to ensure their entry into their preferred programs in the free universities.

As the policy makers for world’s most unequal region of the world, Latin American governments place a high priority on getting education policy “right”. Most systems subscribe to the conventional wisdom that primary and secondary education should be at the core of public policy, with universal access paid for by the state. The focus on access has achieved good results: Over 95% of primary aged students and 74% of secondary aged students in the region attend school. Unfortunately, only 60% of those enrolled in secondary school end up graduating. So, despite high levels of access, many students tend to assign little value to the education itself. Quite simply, to keep students studying, the schooling quality needs to be high enough for them (and their families) to perceive future benefits. This is where Latin America is failing. All eight Latin American countries that participated in the recent OECD-administered PISA tests ranked in the bottom third of the 85 country study. In seven of these countries, the average student scored below the mathematics baseline threshold meaning that at best, they can only handle the “simplest and most obvious tasks” and are unlikely to be able to “participate in a modern society”.

Fortunately, a barrage of research is generated on a daily basis on how to improve the quality and efficiency education. Theories on computer based adaptive learning, topic based learning, flipped classrooms, skills education, etc. are abound. However, while other sectors of the economy enjoy the advantage of letting the market’s power of creative destruction discover what works best for the context of each consumer, education cannot.

Egalitarian principles dictate that all people, regardless of characteristics like race, class or place of birth, should be afforded the same opportunities to education. For many, this means that only under a homogeneous system can those who began their lives with less have a fair chance to climb the ladder of social progress to have more. This belief that new policies must be applied evenly leads to a “top-down” approach for innovation that struggles to apply new research at the pace required to meaningfully improve quality. In best case scenarios, ministries take years to study, debate and implement new practices for the public educations systems under their mandate. In worst cases, decisions are made rashly with unintended consequences. In theory, lessons learned in the quicker-decision making environment of private schools could be adopted by public schools. In reality, these solutions are rarely feasible due to low budgets and heavy inertia of stakeholders, such as teachers unions and ministries.

Finding little room to experiment in the core area of public education, the private sector is relegated to innovate in the periphery: either extra-curricular services for 5-17 year olds, or any service outside that age range. For example, Latin America has recently seen a proliferation of online tutoring websites, extra-curricular “life skills” courses, and language programs that are targeted for after school hours. Other private companies prefer to focus on creating solutions for university education, vocational training, and, in some cases, early childhood development. In any case, what goes on inside the public school classroom for primary and secondary, is usually the sole domain of the government.

A common exception has been the areas of technology and content. As education trends towards digital lessons being delivered on devices, there should be a clear opening for private sector presence, if not leadership. Alas, most publishers are struggling to remain profitable in the digital world, and governments are not always the best ally. For example, Colombia’s education ministry recently declared a tender process for government “null and void”, and proceeded to create their own government owned publisher to churn out 33,000 pieces of new digital content, after hiring top employees from local publishers. This may be a victory for free high quality content, but it is hardly a sustainable way to harvest innovation from the private sector.

For impact investors, it is therefore difficult to find disruptive models that are truly changing public classroom education in Latin America. Quite simply, operating at the periphery generates less impact that being at the core. In the global GIIN and JP Morgan survey on Impact Investing, only 2% of assets under management were reported under education, behind housing (27%), microfinance (16%), financial services (11%), energy (10%), healthcare (5%) and agriculture (5%).

If education is truly the great leveler for inequality, governments must seek partnerships with the private sector to stimulate innovation at the core of the educations systems. This requires willingness to permit experimentation, pilots and trials within their districts, even if it creates a slight heterogeneity in the system. Private companies, on the other hand, need to proactively show that their interests are aligned with government: that measurable educational outcomes are just as important as the profits they hope to generate from sales. Seeking backing from impact investors, who often enjoy an “honest broker” reputation from governments, can be one way to show this commitment.

The debate on where the public system ends and the private systems begin will always be an ideological one. It is also an unhelpful one, since both are effectively dependent on each other for evolving teaching methodologies. While for-profit companies, NGOs and academic institutions can execute specific interventions, only the government can bring these interventions to the scale necessary to impact entire generations. Our youth depend upon a functioning, long term, public-private partnership to bring forth the best of innovation that can prepare them for a world of constant change. Let’s not disappoint them.

This blog was a part of the September 2015 series on collaboration for innovation. Click here to read more analysis, guidance and case studies from around the globe on partnership working.