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What South Korea Really has to Teach Us About Education: Part II

Last week, in Part I of this series, I laid out my argument for why privatization will lead to the formation of large private school companies and franchises like we see in Korea. To summarize: It just makes economic and business sense. If people involved with education are interested in making a profit, it is clear that one of the easiest ways to do that is to grow larger. This week I’ll explain why a profit motive actually discourages innovation in the long run and won’t level the playing field. In fact, privatizing schools might very well end up costing parents money as they seek to give their children an edge.

 

Corporatization Kills Innovation

innovation-killer-2Even if people concede that corporatization is the inevitable result of privatizing schools, some still might ask what is wrong with schools banning together to bring down costs while offering more services, all while making education more cost effective and profitable? To answer this I will point to one of the main arguments made by private school advocates: Privatizing schools will lead to greater innovation through the forces of free-market economics and competition. These advocates have mistaken schools competing for students, or, more accurately, customers, with actual education innovation. They are not the same thing as Korea once again demonstrates.

 

Having worked for a large ESL company in Korea for many years and after becoming familiar with our competition’s practices, I can say with certainty that the last thing a large education company wants to do is innovate. Just like the US auto industry refused for so many decades to make fuel efficient cars, despite knowing the necessity of them, Korea’s large private schools view innovation as throwing away money they’ve already invested in their current educational method to try something untested. No matter how obvious it is that a change is needed, if that change comes at the expense of the bottom line, most large companies will not make those changes because they have investors to answer to if there are any losses, short-term or otherwise.

While a small private school might be more willing to try something new and different since it is not as expensive for them to do so and it might help them earn a spot in the market, that willingness to innovate will decrease once they find their niche and grow in size. The company will then shift its focus from innovation to maintaining the status quo and attempt to keep growing without having to reinvest in innovation. So, while education should be constantly adapting and adjusting to meet the needs of students and to address any shortcomings found in their understanding of a subject, the larger a company grows the more difficult and costly it will be for it to change. This is because change means buying new materials, retraining teachers and spending money to explain to customers and investors what they are doing.

 

download (2)Korea again shows all this with the fact that no major ESL franchise in Korea has implemented any major changes in their teaching methods in at least ten years based on the information I was able to gain while working in the industry, and this is despite the consistently poor test results of their students that go back to the beginning of ESL education in Korea. The risk and cost of trying something new is seen as being too great. Furthermore, in Korea, the larger schools set the tone for the market. While smaller schools could more easily innovate and try new things, most simply follow the market leaders because the easiest way for them to compete is to say they are offering the exact same kind of education as the bigger, better-known schools. This is seen in the fact that there are very few schools that I’m aware of, and I’m aware of many from my work and my social contacts where almost all my friends in Korea are ESL teachers, are offering an education format other than the test preparation found at all the large school companies. (I’ll address tests and test preparation in Part III of this series as reliance on this ineffectual style of education is also an inevitable result of large scale privatization.)

 

However, it could very well be that American companies might be more responsive to poor test scores than Korean companies have shown themselves to be. And they might be willing to change more quickly once they realize a method of education is not working, or  like the US auto industry, they might ride their defective business model to the brink in an attempt to squeeze out every last dollar from it they can before finally being forced to admit it does not work and needs to be changed. However, unlike the auto industry where the only harm in this was making big cars no one wanted (and the environment), the end result of this business-minded practice being applied to education will be countless students who will receive an inferior education so that businessmen and investors can maximize profits. Once again, I’m sure I’m going to sound anti-business, but I have very little doubt that with businessmen at the helm of large education companies, at least a few are going to be profit first when it comes to making decisions about their customers’…I mean, students’ education.

 

Privatization Will Not Level the Playing Field

25Another unrealistic expectation of privatization advocates is that privatizing the school system will somehow level the playing field for students. Korea once again shows that this could not be further from the truth. Despite its government having strict caps on the maximum amount that private, after-school companies can charge, something that would be considered very un-American and anti-business in the States, Korea still has a tiered education system with private, full-time international schools set up that only the wealthy can afford. These schools do, however, offer students with high test scores scholarships, but that’s about business.

 

This business model already exists in American where there are already plenty of private schools to service the truly gifted and the rich elites. They offer their students excellent educations and afford them wonderful opportunities. The success of these schools, which depends largely on the selection effect, a term coined by Malcome Gladwell, in which certain top schools’ success is entirely related to the fact they recruit top students to supplement the test scores of the moneyed elite. This is in contrast to the treatment effect of, say, the US Marine Corp in which they claim to be able to take anyone and turn them into a Marine. This is no different than our Ivy League system at the university level which does not claim they can take any student and turn them into a great student, they only claim that the best students go there. In other words, “Give us your best and we’ll give you the best.”

 

If a voucher system is created, these excellent private schools will not suddenly open their doors to everyone. They will, however, raise their prices to keep poorer students out in order to continue practicing the selection treatment and to maintain their exclusive reputation and good results. After all, they already have a reliable and steady client base that has shown they’re willing to pay out of pocket for their children’s education. The only thing that will change if schools are privatized is that rich people will now have the private education they would have paid for anyway subsidized at tax payer expense.

Do-private-schools-offer--007The end result in the unregulated, privatized education system America is likely to create will be a massive new tiering process for schools similar to what we see at the college level: A handful of schools will remain too expensive for most parents to afford while the majority of people will be sending their children to the corporate run schools that will be best able to keep their costs down so that their tuition can be entirely covered by the government voucher. There will be a myriad of schools in between, all of which are just a little more expensive than the next. They’ll be able to do this because of the notion that more money equals higher quality. So, where most parents currently aren’t paying anything for education, many will be enticed to spend just a few hundred dollars a year above their voucher amount to get their child into a school that’s perceived to be a notch or two better than the school Johnny down the street goes to. And we’ll have to hope that the finance industry does not get involved like they have at the college level and create an anxiety in parents that for a loan of just a couple of hundred dollars a year, they can give their child the edge they need to succeed in the world.

 

SideBar: In Part III I’ll explain how privatization will cause even more reliance on tests and create business scandals in the form of manipulating tests and test results. I’ll also explain how treating parents like customers will result in parents harming their children’s education.

 

Brian M. Williams
Brian is the author of the recently published travel memoir "Stranger in a Stranger Land: My Six Years in Korea." (Click this profile for more information.) He's also a law school grad with Southern charm and Virginia roots. He recently returned to America after nearly seven years traveling and working abroad. He loves dive bars, international travel and foreign accents. He's particularly good at small talk and was the first person to notice there's no "I" in "team."
https://www.facebook.com/StrangerInAStrangerLand/

5 thoughts on “What South Korea Really has to Teach Us About Education: Part II

  1. I’ve been waiting for your next post with great anticipation, Mr. Williams.

    You seem to be thinking under the assumption that the desire to increase in the size of one’s business is a natural end result. Now that may be the case, but we have to remember that going big does not always mean that profits will be bigger. We have seen many too-big-to-fail businesses around the world, both privately and publicly-owned that have proven that a hefty size does not guarantee hefty profits. Those large businesses that are in the red that stay in business longer than possible only do so via government assistance. If businesses can grow AND increase profits, good for them. But if they grow but receive government assistance as the sole means to stay in business, I would hardly call that “privatization.”

    “Some still might ask what is wrong with schools banding together to bring down costs while offering more services, all while making education more cost effective and profitable.”

    But how is this a bad thing? Constantly questioning current models to create “more perfect” models is a good thing, no?

    “I can say with certainty that the last thing a large education company wants to do is innovate.”

    This is certainly true, especially of larger businesses. As businesses grow larger and attain larger bureaucracies as well as accumulate greater sunk costs, they certainly do not wish to innovate; preferring to sticking to the status quo. However, we have to remember that very few businesses start big. Most businesses start small. With that in mind, you seem to be operating on the premise that the market will remain static. Once a business grows and shows that it is profitable, that will always attract new entrants into the market. Of course, as you pointed out, not all small businesses innovate either. A lot of them prefer to emulate the existing big businesses. But those small businesses that emulate the already-existing bigger businesses tend to be the first to go out of business. The ones that innovate will either force the established businesses to change (at great cost to themselves) or they themselves will become the next big businesses, or will (less likely) cause both to happen. Like I mentioned in passing the last time, Blockbuster Videos vs. Netflix is the perfect example of this. As a result, though education would not be “constantly” adapting, it will adapt and the incentive to adapt is much greater in the private sector than it ever has been in the public sector.

    Your point about Korean ESL franchises not having implemented any major changes in at least ten years is a valid point. However, the lack of changes is not solely the fault of the businesses. We have to keep in mind that no business can stay in business if it does not meet the demands of the customers. For good or for ill, the customers are still demanding and paying for the services that have not changed in ten years. It’s not hard to imagine that (at least some) businesses will be more than willing to provide alternative services if significant demand is there. Though you have done an excellent job in bringing awareness to corporate inertia, I fear that you may have neglected social inertia.

    With the element of choice that the customers will have, I am not sure if it is entirely true that countless students would receive an inferior education. Though admittedly it is not impossible, I think it is not as likely as you seem to think it will be.

    But if the alternative is to keep the schools publicly-run, especially when we use American public schools as an example, especially those in the urban areas, it would seem that public schools have also shown an immense ability to ensure perpetual inferior education (of course, due to various reasons that are too numerous to mention in a blog comment). Similarly, public schools, not only the Ivy League universities, also have their own tier systems. I think that you and I can agree that not all public schools are created (or at least run) equal.

    The one thing that I do absolutely agree with you is the stance that you have taken on the voucher system. A voucher system, again, from what little I understand about it, appears to have all the warning signs of impending disaster and should be aborted.

    The one thing that you mentioned in passing, which I also agree with, is the fact that people seem to think that having to pay more money equals receiving a higher quality product. That in itself betrays people’s irrationality but we have to also keep in mind that education is one of those economic commodities that people cannot think about rationally (medical care being another). And it’s understandable. Parents always want what’s best for their children. Unfortunately, people don’t know what “good” means, much less what “the best” means.

    I don’t think there is an easy solution for that. But claiming that privatizing schools will somehow aggravate the situation further does not seem to be accurate, especially considering the fact that those evils that you are warning against already exists in the current pubic school system.

    Lastly, the main argument for privatization, which I feel that you neglected to mention, is not that it would be a panacea or that it would even guarantee innovation (it may be a favored go-to argument, but it is not the main argument). As you have pointed out quite correctly, there is no guarantee for innovation at every turn. Anyone who makes such an argument would be a fool. The main argument is choice. Something that public schools offer very little of.

    And now I shall wait eagerly for Part 3.

    1. Mr. Lee, thanks again for your thoughtful comments. I think your initial comments are better directed at part I of this series because that is where I lay out and explain why schools becoming large companies is all but inevitable based on one of the most basic of economic principals: the economy of scale. It can be argued some people will hold out and insist on keeping their school small to better control quality and such just like any industry has a mom and pop holdout. But we see clearly in business, and again in South Korea, that they will be the exception and not the rule.
      I can agree with you that a new company coming into the market would most likely find success by being innovative, however, what I’m arguing is that if large companies form, the barrier of entry to get into the market at some point will become cost prohibitive. For an example of this, just look at Tesla trying to enter the car market in America. It has a better product and one people want, but it’s costly to deliver the good and the existing industry is pulling every trick out of its hat to keep them from gaining a foothold. To me, if any talk like this is coming up with education then we are already going down the wrong path with it. The competition should be 100% and exclusively about what is best for students and not how established companies can maintain their market share or new companies can break in. because remember, with private schools, when we talk about winners and losers, we’re not just talking about businesses, we’re talking students and their education.
      You have also managed to get ahead of me again. My next post will talk about the role of parents in all of this which is key and is perhaps the best argument against privatizing schools because, like you said, they don’t know what’s best. And if that is the case, that means the choice you are so eager for them have is going to be heavily influenced by ad agencies and superficial and inconsequential things that will appeal to parents but serve no real educational purpose. This is most definitely something I’ve encountered in the textbook industry here in Korea and will be talking about.
      I’m also going to talk about the problem of standardized tests here in Korea and already in America. These tests, I believe were the first attempts at making education more business like because the hardest thing about turning education into a business is getting quantifiable data to promote the superiority of your product. These tests are taking down Korean ESL and America’s education system. You want innovation in public schools? get ride of these tests, or at least a lot of them.
      And lastly, you’re right, their is a tiered system currently in public schools in terms of funding, that a long with many other things should be addressed and all show there is a lot of room for improvement in public schools which means we dont have to blow the whole thing up just yet.

  2. Hey! Stop messing with the topic of my blog!!!!

    Privatization of Education. Though topic.
    Both the private sector and public sector show potential for not providing the needs of the people, even if people don’t really know what they need.

    I have found a nice video I would like to share about what is wrong with education today.
    https://www.youtube.com/watch?v=G6JGYRodNeA

    There are three conclusions he draws from his experience as an HR manager.

    1.Education without Degrees!
    Degrees are focussed on what we don’t know, and what we can’t, and neither the private sector or public sector adress this problem. We need to change the education system into identifying what people CAN do rather then showing what we CAN’T do.

    2. Work without limitations
    Not relevant to this discussion
    3. No pensions!
    Not relevant to this discussion

    Education is always considered as a preparation for the future. Should we let business or government take care of that.
    The answer is Yes, we should let business and government take care of that. BOTH systems can work in tandem next to each other, giving us the benefit of both systems to make it all work just a little bit better.

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