The Case for the Private Sector in School Reform

Innovative companies have improved nearly every area of public life. So why are ideologues trying to keep them away from education?

Apple Marketing chief Phil Schiller introduces a new digital textbook service at a news conference in New York on January 19, 2012. (Reuters)

Given the costly chasm between the educational performance of U.S. students and those in other countries—and the shameful gap between white students and their black and Latino counterparts here at home—you'd think school improvement would be an all-hands-on-deck imperative in which the best minds in the public, private, and philanthropic sectors came together to lift our children's prospects.

Yet such pragmatic problem,solving is threatened today by critics who condemn any private involvement in schools as a matter of "privatization," "profiteering," or worse. These ideological foes of business' contribution to the public good ignore history in their attempt to protect a failed status quo. If their campaign to quash educational innovation succeeds, the real losers will be our kids.

Here's the curious thing: Those who criticize recent private-sector interest in education never utter a peep about the billions that publishing houses and construction firms have earned through our schools over the decades.

A moment's reflection reminds us that business innovation has long been critical to public goals in sectors as diverse as health care, energy, and computing. In health care, pharmaceutical and medical device firms have worked closely with government partners to make America the acknowledged global leader in medical innovation. In energy, privately funded breakthroughs in gas exploration technologies hold the promise of liberating America from dependence on foreign oil. In computing, Google's privately funded search utility has democratized access to information in ways that improve countless lives.

The list could go on—encompassing communications, transportation, and more. In each instance, public and private actors play the roles to which they're best suited: Private firms compete to develop innovative products and services that deliver social benefits, while public authorities set goals, fund basic research, and police market abuses.

There will always be a need for government to regulate capitalism's excesses and protect the public interest—a role to which I'm deeply committed, having prosecuted several major antitrust cases when I served in the Department of Justice in the 1990s. But to argue that the profit motive somehow disqualifies business from making vast social contributions is more than merely a fallacy. It's to miss the basic economic lesson of the past two centuries—when innovations spawned by the entrepreneurial talent and capital of the private sector have been harnessed for public purposes to become the greatest force for human betterment in the history of the world. "Doing well by doing good" is a cliché for a reason.

In education, of course, private firms have always been integral to the daily life of schools. Pencils, paper, blackboards, books, desks, and schools themselves have been built and sold by for-profit companies since the 19th century. Food, janitorial, transportation, and training services have been more recent additions, along with software and computer products as the close of the 20th century.

Thoughtful observers have always understood that when public authorities contract with private firms and oversee their provision of certain products and services, that's a very different thing from "privatization." This only stands to reason, since apart from salaries and benefits for teachers, principals, and other school personnel, virtually every dollar spent on K-12 flows through private firms today.

Yet here's the curious thing: Those who criticize recent private-sector interest in boosting student achievement never utter a peep about the billions in profits that publishing houses and construction firms have (legitimately) earned through our schools over the decades. What accounts for their selective antipathy? In part, it's because these older firms have served the sector so long they've become part of the wallpaper.

But the deeper reason is that the current generation of private sector innovators want to challenge traditional ways of doing things in schools. They see a system that's failing to equip America's children with the skills to compete in a global age, and they believe passionately that innovative products and approaches could help the country do better. This determination to shake things up is seen as a threat by many who hold power over schools today, and who act as if the status quo is working just fine.

The public shouldn't be fooled by attempts to slander today's private sector innovators. Just as Edison knew he was onto something big—the idea that electricity and lighting could improve our lives—today's education entrepreneurs know they can harness emerging technologies to reimagine teaching and learning. It's a story as old as change itself. The candlemaker's union wasn't cheering Edison on. Make no mistake: The attack on new entrants into education has at least as much to do with power as with profit.

The real question for those of us concerned with improving public education should not be whether the private sector has a role—it always has and always will—but rather how best to tap what the private sector can contribute. At a moment when advances in both the science of learning and technology itself are making new educational breakthroughs possible, the short answer is that we urgently need to create a culture of public-private collaboration in research and development on behalf of our teachers and kids.

Why do I single out research and development? For too long, the education sector has suffered from a dearth of the R & D that has assured progress in every other sphere of human endeavor. Until recently, education entrepreneurs and innovators have largely steered clear of traditional public schools, deterred by their fragmentation as a market, as well as by the perception that decision-making seemed impenetrably "political."

It's been hard to justify such investments, after all, when the people making purchasing decisions (politicians and officials) may have different interests and perspectives than the ultimate consumers (teachers and students). As a result, education innovation has tended to concentrate in smaller markets, like homeschooling or charter schools, where it's been easier to introduce new ideas and reach these end-users. But the social impact innovators can have in such settings is obviously limited.

The good news is that the Common Core Standards, now adopted in 46 states, are creating incentives for innovation at the heart of the system. At last there's a common definition of what "good" looks like for students and teachers, at least in core subjects like math and English. This helps explain why venture capital is now flowing in record sums to startups seeking to serve K-12 schools—and why larger firms (like the one I lead) are for the first time assembling world class teams of educators, technologists, and designers to tackle these challenges.

There's no guarantee that many of these new entrants will succeed—that's the nature of capitalist innovation, in which many investment "bets" are made. But as radically more investment is devoted to enhancing teaching and learning, it raises the odds of breakthroughs that can demonstrably lift student outcomes.

As this investment ramps up, public and private sector leaders need to work together to make school-related R & D as effective as possible. Serious barriers still exist. Before making purchasing decisions, for example, schools and districts typically demand "proof" that new products or services will be efficacious. Traditionally, such evidence has been collected through randomized, controlled trials that take years to complete. Compare that to the average product development cycle for smartphones or apps, where better mousetraps appear every year (if not every few months) and "prove" their advantages to millions overnight.

My point: The timeframes governing education research are completely out of sync with the pace of technological change. If we don't find sensible ways to square this R & D circle, schools will inevitably lag behind.

A critical step would be to create more fluid partnerships between schools and firms in the design and development of new products. Today, firms working on new products to help teachers often can't test them with current public school teachers (and compensate them for their time), as many districts deem this a "conflict of interest." That's like telling GE it can't work with airlines and pilots to develop more efficient and effective navigation systems and jet engines.

We need to close the gap between developer and user so that products are not designed in a vacuum. Done right, such collaboration will shorten R & D cycles, lower costs, and offer safe, secure ways for educators to shape the next generation of pathbreaking ideas. To get there, we need private capital and know-how to cover the costs and forge a culture of innovation, combined with public support and oversight to foster trust.

To be sure, there are tricky issues to navigate in making this kind of public-private partnership work. But these are the real stakes now. Do we move forward and find sensible ways to capture the public benefits that private-sector innovation has brought to every other field? Or do we stay trapped in old ways of doing things that aren't meeting America's needs? When even a famously egalitarian society like Sweden is embracing private sector innovation to help improve schooling, our own path should be clear.

At bottom, the crusade to keep private-sector innovation out of education is about resisting such change. It's also a species of the same blind dogma that brands all profit-seeking as morally suspect. This is as mistaken as concluding that the shortcomings or corruption of certain public agencies or officials means we should deny ourselves the benefits of government.

In the 21st century, public schools need the kind of innovation that private firms like Google, Twitter, and Apple exemplify (just as there's room for innovation from non-profits like CK12 or Khan Academy). For the sake of our children, it's time to open our minds, move past ideology, roll up our sleeves together, and get to work.