For-Profit Education a $102 Billion Industry

Published August 1, 2002

Revenues in the for-profit education industry grew by 2.6 percent to $102 billion in 2001, according to Eduventures, Inc.’s seventh annual overview of the industry. The $16.5 billion postsecondary sector is expected to be the fastest-growing sector in the industry for the next several years.

The pre-K-12 sector represents the largest revenue generator in the industry, accounting for $58 billion, in large part due to the child care market, which accounts for 23 percent of overall industry revenues. The corporate and professional education sector remains the second largest with $27.4 billion in revenues, of which nearly 60 percent is accounted for by traditional instructor-led training businesses.

Another recent report, by Eduventures analyst Sean Gallagher, examined the recent announcement by Linux distributor Red Hat that it will provide free products and services to K-12 schools.

To budget-strapped schools, the idea of free software and technology services is bound to be attractive, Gallagher noted, but administrators will be challenged by the adoption of another software platform in an already-complex computing environment.

“The launch of Red Hat’s K-12 pilot program may help accelerate the adoption of open source software within the K-12 educational community,” says Gallagher. He warned, however, “the company and other proponents of the open source software movement will need to demonstrate that open source solutions in the K-12 market deliver value equal to or greater than that of proprietary, licensed software on other platforms—at an equivalent or lower total cost of ownership.”