Few can deny that the right to education is important, but the rapid growth in the world's population is putting an increasing strain on public education systems. Not only are there more people to educate than ever before, but the difficult global economic climate has forced many governments to decrease rather than increase their public spending, leaving education sectors struggling to grow in line with demand.

It is against this backdrop that the global private education sector has been able to take off. At the start of 2012, US-based private equity firm Carlyle Group invested an undisclosed sum for a 48% stake in Bahcesehir Kolejleri – a Turkish private education operator that works across the nursery, primary and secondary school segments – drawing attention to the rapid growth in the global private education sector and the significant opportunities available to investors.

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Attendance records

According to Global Education Investments, a capital fund-raising and consulting firm focusing on the sector, the global education market is worth as much as $50bn, with opportunities concentrated in developing countries in Asia, the Middle East and South America. The growth in demand in these regions is largely down to expanding youth populations – in India half of the population is under 15 years of age – and the increasing wealth among middle-class families.

One of the key components of the growth in the private education offering is the increasing number of ‘English-medium’ international schools – that is schools where English is the language used to communicate and teach. According to ISC Research, part of the International School Consultancy Group, an independent organisation that maps the world’s international schools and analyses developments in the market, the number of pupils attending international schools has gone from 1 million in 2002 to 3 million in 2012.

According to Nicholas Brummitt, managing director of the International School Consultancy Group, this growth is showing no signs of abating. “We predict that the number of international schools will grow from 6000 today to 8000 by 2015. The number of students will grow from 2.6 million to 3.7 million [and] fee income will grow from $26bn to $37bn,” he says.

Whereas once English-medium schools were the domain of English-speaking expatriate children in non-English-speaking countries, now they are servicing the increasingly affluent local middle class in these countries. “The percentages bear this out: in 2002, 70% of children were expatriates and 30% from local wealthy families. Now, however, this has switched to 70% local and 30% expatriates," says Mr Brummitt.

Divided interests

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Coming on the back of this increased demand is the growth in the number and the size of global education providers such as GEMS Education and the Taaleem Group in Dubai, and UK-based Cognita, which operate networks of schools across the world. There is also a growing market for educational materials and supplies as well as for technological systems.

UK-based education and publishing company Pearson (the parent group of the Financial Times) recently purchased the learning systems division of a Brazilian education company, Sistema Educacional Brasileiro. According to John Fallon, chief executive of the company’s international education division, the investment will “provide a platform to build a more significant Latin American business”.

However, private education as a business venture has its problems, not least ideological ones. Governments have an ambiguous relationship with the private education sector, sometimes encouraging it and sometimes putting up barriers. Qatar's Education City – a 14-square-kilometre complex housing schools, universities and research facilities – is one example of the considerable developments that the private sector is capable of making in the sector.

But there are also instances where governments have introduced policies that deter private investment in education. For example, in June 2012, a law was passed in India that forces private schools to open their doors to pupils from poorer backgrounds. Regardless of the moral position of the new law, it will be seen as interference by the government, which many investors will not like on principle.

“Some investors [into the global education market] are concerned about government influence,” says Julien Navier, managing director at Global Education Investments.

Making the grade

Even if there is broad governmental support, starting up schools on foreign soil has a number of other challenges. “You need to research your market extensively in order to get through the tortuous waters of opening a new school." says Clive Pierrepont, director of communications at the Taaleem Group.

"The most important thing when you are moving into a new region is to find a local partner. Many countries mandate a local partner to help you navigate through the legislation of setting up a new operation in a new region. Even when moving within a country, from one region to another, requirements can be completely different. For example, [in] the United Arab Emirates, Dubai and Abu Dhabi require very different submissions, and the business plans will look totally different based on regional issues and stipulations.”

Another issue is labour. These schools need large numbers of very good, English-speaking teachers, says Andrew Wigford, the managing director of Teachers International Consultancy, an organisation that specialises in recruiting teachers for the international schools market.

“Currently, international schools have an extremely good reputation for the standard of their teaching and learning, which is one of the major reasons for their growth. But to maintain this reputation... standards have to remain high. This means that the selection process for new teachers and leaders has to continue to be extremely rigorous. New schools and those that are expanding cannot resort to filling spaces with inexperienced or poorly trained teachers. They have to keep standards high and to do that they need to offer packages that appeal,”  he says.

For Mr Wigford, appealing packages are not just about attractive salaries. "Career growth opportunities, formalised professional development, living and travel benefits, location and also the reputation of the school all play a major part in the decision-making process for a candidate,” he says.

These issues are not insurmountable, however, as proved by the increasing number of private investors taking advantage of the opportunities in this sector. And although state provision of education at primary and secondary school level means that the private education market does have its limits, the continued growth of the world's population means that there is still considerable room for private initiatives.