International Education - new role of business

The new role of business in global education

Around the world, companies are beginning to play a new role in education—one that improves learning outcomes while driving shareholder returns. Rather than viewing education solely as a matter of philanthropy or responsibility, these companies are also tackling education issues through their core business strategy and operations. In doing so, they are creating the power to scale solutions to our world’s greatest education problems far beyond what they could do with limited giving budgets.

This new approach leverages the concept of shared value to help companies find new ways to grow revenue and increase productivity by raising levels of student and workforce achievement. (See “Creating Shared Value,” Harvard Business Review, January 2011, by FSG co-founders Michael Porter and Mark Kramer.) In education, companies create shared value in two fundamentally different ways. First, companies that are in the business of selling products to the education sector (such as Pearson, Lego, and Intel) can create shared value by developing cost-effective products that improve learning outcomes and enable them to gain competitive advantage based on student success. Second, companies across all industries that are constrained by skills shortages can create shared value by sourcing and training the employees, suppliers, and customers they need to grow their business.

More and more companies have begun to create shared value over the last decade. Relatively few, however, have applied this approach to education, as it has historically been viewed as the realm of government and the timeline to see results can be long. Yet changing market dynamics—including disruptions in technology, a growing global middle class, and a rising demand for quality—are shifting traditional mindsets and opening new opportunities for business.

Of course, shared value cannot solve every problem facing our schools and workforce. Nor does this approach seek to devalue the ingenuity and dynamism of the non-profit sector. Governments, funders, and nonprofits will continue to play foundational roles in extending opportunity for learners and job-seekers worldwide. But shared value can define a renewed and much more productive way for business to contribute. When companies draw on their unique strengths as businesses, they can leverage resources and ingenuity that create a profound impact in the education sector. By creating smart incentives and partnerships, government and civil society can bring out the best abilities of business and encourage more companies to embrace shared value thinking.

This new paradigm holds tremendous promise for addressing our world’s educational challenges. When companies fully engage in education through shared value thinking, they will become essential, trusted partners for government and civil society. Companies will prove their value to education by delivering usable knowledge and skills at every stage of education from early childhood through the attainment of a meaningful career. By doing so, companies can rediscover their sense of purpose while creating value for themselves and society. More broadly, applying shared value to education can help spark opportunity for individuals and their communities while strengthening the links between school systems, jobs, and the revitalization of the global economy.

To learn more about how companies can create shared value in education, read FSG’s recent report: The New Role of Business in Global Education.

Kate Tallant
Director, FSG 

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