On education as an asset class
Schools and education could be the logical extension of real estate investment
You may have noticed there’s a property boom in Australia - a long one with no real end in sight. And you may have also noticed that schools own a lot of large, prime sites in populated areas, serviced by public transport. On top of this, super funds are awash with cash, with an insatiable appetite for real estate. We live in a country where about 90% of the population live within 15 minutes of a major shopping mall, and where marquee tenants like David Jones and Myer are slowly dying from chronic irrelevance. If an organisation wanted to expand their real estate assets, schools would be the obvious choice.
We spend a lot of time projecting our anxieties about the future of work onto our students, with hand-wringing about the lack of creative and critical thinking skills being taught in schools. But we spend precious little time imagining alternative futures for the organisation of schooling itself. Creative, strategic or - God forbid -radical thinking is often shot down, even as teachers struggle under the weight of unprecedented workloads, as we have seen with the Grattan report. Don’t confuse these sentiments of mine with trite statements about the irrelevance of the industrial model. I still like desks and walls, and I still believe that mass education is achieved through consistency and economies of scale. But what if those economies of scale, and the efficiencies we have all been crying out for, came from the private sector?
Think about this as a proposition: many companies - think shopping centre conglomerates, super companies, investment houses with large real estate asset holdings - are looking for the next big thing. Many of these companies have all but exhausted most available real estate sectors. The idea of the ‘anchor’ store is becoming quaint and shopping centres are increasingly aiming to position and market themselves as the new town square. Schools are certainly growth industries, with demand in some areas of Sydney expected to double. Not only do many charge high fees, but investors can’t lose with an underlying property asset that will no doubt continue to climb in value.
I know already that there would be ideological opposition to any further privatisation of education. But because I feel strongly that a. something needs to change and b. something probably will change (but not due to teacher activism or government will), I’ve worked through the pros and cons of a scenario where schools, or even whole systems, are acquired by big business.
On the case against
Schools will be run as businesses. Just as with large bureaucracy, a vacuum of leadership vision would be uninspiring to say the least. Teacher buy-in is so essential in providing quality and impassioned teaching.
Existing entities may not be willing to ‘sell’ their vision to corporate in exchange for management and administrative services. Ultimately, if government is willing, the choice may not be theirs to make.
Building new assets as part of a charter style system could be a massive failure as it has been in some examples in the UK and US.
Funding could be messy - would this be proposed as a for-profit system, a partly government funded system as we have now, or a charter-style free school? And would all of the ideologies attached to this cause too much controversy for the proposition to even get off the ground?
On the case for
Schools will be run as businesses. With a network of schools, administration and maintenance could be centralised. Even student data and reporting could be centrally managed. Economies of scale could be achieved and a lot of the administrative work done by teachers could be completed by paraprofessionals and administrative staff. Performance pay could be offered to attract the best staff. A for-profit or non-government funded model would be possible, even desirable with greater flexibility and fewer compliance requirements. It’s been done in NSW.
Vision and context-specific approaches could be part of the business model. I think we are being a bit naive if we think that doesn’t already happen in the marketing of non-government schools. But it’s more than that. Teachers buy into local vision, so it makes good business sense to try to maintain a local ethos and approach on the ground.
There have been huge successes in the charter system, especially for previously under-served children. Think Michaela or Success Academy. These organisations provide high expectations and produce great outcomes, something I think is not happening for Australian students in the areas that need this most.
I actually think there’s something inevitable about a change to the structure and funding of schools. It’s an area that teachers are largely protected from thinking about, especially as a lot of decisions made about the direction of education don’t involve us. We’re certainly not going to be privy to any kind of lobbying that would affect our organisational makeup. It’s not just because both the UK and US have opened themselves up to alternative models, but I think we might be naive to think that schooling will look exactly as it does today in another 10 years. Big business is extremely powerful and asset-hungry. It may be time to imagine alternative futures and consider ways to get a seat at the table.