- The size of the private tuition centre industry
- The factors for increased demand for private tuition centers
- How is growing population of attending schools and colleges and increased expenditure on education is supporting the industry?
Tuition centres or cram or preparatory schools have become an integral and ineradicable part of the education system in the world, more so for several Asian nations. While tutoring was solely for slow learners, but intense peer competition placed the private tuition centre industry in the mainstream. Hence, most parents are spending huge sums of money every year to provide the best possible education to their kids and preparing them for the stiff academic or professional competition.
The demand for private tuitions is largely driven by growing emphasis on entrance exams, improvement in overall competency, enhancement of knowledge and levels of skills. In the recent years, there has been a heightened demand for tutoring services due to the below reasons:
- Intense competition among students and need to excel in competitive exams
- Personal attention, more focus on skill-based learning and in-depth knowledge provided by tutors
- Adoption of new technologies in various educational practices
- Lack of teaching staff and infrastructural facilities in few schools
- Working parents with paucity of time
Televisory analyzed the key reasons for driving the global growth in the private tuition industry, primarily in the United States, the United Kingdom and Asia-Pacific nations and specifically in Korea, Japan and China.
In the United States, the growth is driven by the technological revolution in the education sector and the act of the Federal government known as ‘No Child Left Behind (NCLB) Act’, which offers supplemental educational services and private enrichment programs for low-income students. This contributes to enhanced spending on services such as tutoring, test preparation, educational assessment, and technological integration. In Japan, Jukus (cram schools) have been operating since the 1970s and parents send their 2 to 3-year old children for learning prior to the attainment of the formal education. China’s private tutoring industry is USD 60 billion enterprise for K-12 with 162 million students in primary and secondary levels, while in South Korea tutoring is USD 20 billion per year industry. In Singapore, the contemporary tuition industry is worth more than a billion of dollars annually, which is almost double the $650 million spent in 2004. In addition, major developing regions like Brazil and Eastern European nations are witnessing the growth in private tutoring market.
One of the factors driving the entire industry is the growing population attending schools and colleges. But with a lack of teaching staff and infrastructural facilities in certain institutions students are opting for alternate methods of learning to improve their overall competency.
Additionally, in the competitive world, the growing emphasis on entrance exams is another major factor and driver for the market growth. For instance, students should clear ‘Gaokao’ examination prior to enrollment in secondary schools in China. Likewise, students should pass ‘International Baccalaureate (IB)’ examination to complete secondary education and enrollment for university-level, education in France. In the United States, more than 68% students appear for entrance examinations such as the SAT and the American College Testing (ACT) for post-secondary education enrollment.
Moreover, growing proportion of spending on education provides greater market opportunities for private tutoring. The increasing enrollments in higher education courses across the globe resulted in private tutoring becoming a prime method for strengthening of traditional learning. Secondly, attaining admission in top and/or desired universities or colleges normally require clearing of entrance exams. This is on the priority list of not only students but their families as well. Therefore, parents are more willing to invest money and time in private tutoring for providing an edge to their children.
Furthermore, increasing number of nuclear families and growing number of working couples implies that parents are willing to spend more money on the education of their kids’ due to unavailability of time to focus on their educational needs. In addition, with the highest spending (8%) on education as a percentage of the GDP (Source: GIA, 2016), private tutoring is quite prevalent in the Republic of Korea and approximately 72% of the Korean students received tutoring in 2011 (Source: Bray, 2009).
European countries such as the United Kingdom, Denmark and Norway are also ahead in the household spending on education. Further, other nations like Brazil, Mexico and Israel are also increasing the private spending for better education for children.
According to the OECD (Organisation for Economic Co-operation and Development) report on education (2017), the educational institutions in the OECD countries spend on an average USD 10,759 annually/student for the overall education from primary to tertiary levels. The expenditure per student by educational institutions increased in most nations (2005-14) and by an average of 19% among member countries.
The growth in the private tuition sector is also associated with few challenges. Presently, the industry is an unorganized market for private tutors and this is one of the key challenges. In the same way, private tuition is considered a free market in most nations, there are no governmental regulations or obligations for tutors to register with professional bodies/agencies. Thus, it is difficult to have background checks due to lack of regulations and this makes monitoring a challenge. But demand for private tuition is increasing owing to stiff competition faced by students to gain entrance in a school or university of their choice. Thus, with millions of students aiming for higher education and many expected to hone their skills, the demand for innovative, highly personalized and focused learning is further projected to increase.
According to the estimates from Global Industry Analysts, Inc. (GIA), the global private tutoring market, encompassing all educational levels as well as vocational and language schools is already a multi-billion-dollar industry. GIA published a forecast (September 2016) and mentioned that the global market for private tutoring services will reach USD 227 billion (2022). This is more than double since its last report’s (published in 2012) projection of USD 102.8 billion (2018). The global private tutoring industry is set to grow at a CAGR of 6.76% (2016-20). Hence, based on the GIA’s figures, the United States, Europe, and Asia-Pacific regions accounted for more than 90% of the market share in global tutoring. Addedly, among this Asia-Pacific, is led by China, Hong Kong, South Korea, Japan and Singapore and together occupy a dominant share of 58.7% and will surpass a revenue of USD 51 billion (2020). These territories will also lead and have an anticipated CAGR of 10.2%, which is significantly higher than the growth rate of the industry. Similarly, tutoring crazy South Korea alone is projected to have 15% in the global market, while India is leading in online tutoring at affordable rates.
The technological revolution is also reshaping the entire education sector currently by means of eLearning and/or online tutoring. The biggest advantage with online tutoring is the greater scope of tutoring work, convenient and affordable cost. The size of eLearning market is estimated to be over USD 240 billion (2023), this will be an excess of USD 165 billion at a CAGR of 5%. (Source: Docebo-eLearning Market Trends and Forecast 2017-10). The growing number of online tutoring platforms and technology has substantially bolstered the private tutoring market through the ease of access, flexibility, improved and effective interactive learning tools at cheaper prices. These factors opened several possible avenues for mushrooming of the online tutoring industry.