HBR is running a blog series on innovation in education. Be sure to check out Bruce Dixon's entry on gaming and Joanne Weiss's on smart capital.
Joanne's piece I found to be particularly thoughtful about how the the education market is broken. However, based on some of our survey research, I think misses some key elements contributing to the problem. Participants at theAspen Education Innovation Forum ranked the barriers as the following:
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Procurement rules and regulations at the state level (54%)
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Procurement processes at the local level (48%)
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Bias against for‐profit entities (48%)
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Structure of the marketplace (43%)
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Regulatory and statutory obstacles (43%)
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Insufficient investment opps (28%)
Download the whole report here (PDF)
I think Joanne is right that Common Core adoption will help in some ways, but mostly in lowering development costs. However, it doesn't change the complexity of the procurement processes that districts and states have set up. So a startup may not have to develop multiple versions of a product or service, but they still have to struggle with chasing lengthy and complicated RFPs with a small development team (sometimes only one or two people). Or the RFP process includes requirements that make it incredibly difficult for startups to compete, like performance bonds or state-based award preferences. One recent RttT RFP including this helpful guidance: "All respondent materials must be packaged so that each box of materials shipped to the Department does not exceed 25 pounds." Good to know we're cracking down on proposal obesity.
Another issue not mentioned is that policy often contributes to the market brokenness by favoring non-profit providers instead of creating a level playing field for both for-profit and non-profits. We see this reflected in the legislation that limited I3 eligibility only to non-profits and the proposed Gainful Employment regulation that only applies to for-profit higher ed institutions even though many community colleges and HBCUs would fair no better under the same metrics.
The policy and regulatory environment exacerbates the market brokenness instead of helping mitigate the risk for investors and innovators, the way we see the Department of Energy creating opportunities for cleantech startups through loan guarantees, tax credits, and grants. It isn't about giving for-profits an advantage as much as it is giving them the same opportunities as nonprofits to compete for funding.
I'm heading out to the ASU Innovation Summit where these issues will be discussed on several panels. Should be some thoughtful discussions and debates.
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