K-12 Budget Growth Leveled by Expenses, Education Business Leaders Learn

Associate Editor

Baltimore

District budgets are budging for the first time this year, but their projected 3 to 5 percent growth is being “eaten up” by rising costs, according to Robert Lytle, a partner and the co-leader of the education practice at The Parthenon Group, a Boston-based consultancy.

That leaves companies competing for the same amount of available K-12 funding as they have since the Great Recession began, Lytle told attendees at EdNET 2014, a conference for education businesses held here this week.

Without fundamental policy decisions that would increase funding, this situation will not change in the foreseeable future, Lytle predicted. “The funding you saw in the ’90s and early 2000s is not going to return,” Lytle told hundreds of attendees Tuesday. Consequently, “everything you sell to a school district is something that someone else did not sell. It’s a share-stealing market.”

Still, the Parthenon Group calculates that the instructional content market amounts to $8 billion a year. About 35 percent of that is spent on remediation and another 35 percent is used for supplemental classroom materials, he said. 

“The dollars are being expended to close performance gaps,” he said. 

No Consensus on Preferred Digital Content 

Teachers are being bombarded with change and the need to identify digital content to help students learn. In a  Bill & Melinda Gates Foundation-commissioned study released this year, 3,100 teachers identified 964 digital tools that they use in the classroom. Asked to name the top five tools, the teachers’ responses covered 53 percent of the products.

“When two-thirds of teachers say, ‘I had a really difficult time finding digital educational content, and when I found it, I had a difficult time knowing if it’s really good,’ that’s really bad,” said Lytle. “Teachers are a uniquely positive group of people.”

Lytle challenged the companies to do a better job of explaining what their products can accomplish. “Most of you selling into the digital space right now don’t articulate what your product does very well,” he said, adding that companies who are selling products with descriptions like “an Indivdiaulized personalized learning platform in a SaaS” (or software as a service) are not communicating their potential value to educators.

He urged businesses to be clear about what their products do, how they do it, and what results educators can expect from using those products.

Bridging Gaps

District leaders will continue to feel the pressure of being underfunded. That’s where education business leaders can step in with ways to help, according to Lytle.

“You have to communicate how your [product is] raising the performance of students in bridging the achievement gap,” he said. “If you can ‘t communicate that, you’re dead in the water.” Businesses should be in a position to provide the key performance indicators by which their product should be judged, he said

In the meantime, parents are starting to feel the impact of the programs that were lost in cutbacks, including classes in the arts, music, language, and sports.

“If you have products or services that can help districts economically provide those activities, I think you’ll find fertile grounds out there: the chess club, robotics club, language learning in elementary schools,” Lytle said. Those products will be likely to sell better if they can be priced at a low enough level that a building principal can make the purchasing decision.

Digital products that can help teachers prepare their lesson plans in a time of new standards also will be in great demand, he said.

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