What is education?

The education sector comprises institutes like schools, coaching centers, colleges, universities, and vocational training centers. The educational institutions are either private or public. The private institutes are owned and run by individuals or groups to maximize profit. On the other hand, the public ones are state-owned and controlled ‘not for profit’ institutes.

 

What is the nature of the education industry?

Education is a counter-cyclical industry. It means that when the economy is performing abysmally, more and more people lose their jobs. So they decide to upgrade their education. It is why we experience higher enrollment and increased profits at educational institutes during economic slumps. However, conventional undergraduate education for young people usually is cyclical. The performance of many educational institutes- like culinary arts schools- is mainly in sync with the broader economy.

 

How the sector generates profit?

The enrollment rates have improved in both traditional and online schools. The young students who graduated from high school prefer traditional schooling while working adults refer to learning via online classes in the evening or on the weekends. The online web-classes provide a higher margin for the number of students allowed to attend a particular course. A larger number of students can participate in such classes as there is no class size limitation. The reason why many working adults are seeking executive education is due to global outsourcing. The workers in the developed states feel an increased pressure to enhance their knowledge and skills.

What are the investment prospects?

Investment in the education services industry is a viable option. The enrollment rates are steadily on the rise, which would mean substantial revenue and earnings growth. The new student conversion rate (from inquiries to enrollment) has also improved many folds.