Five K-12 Trends for Investors to Consider in 2018

Forward Advisors
Jul 28, 2017 · 5 min read

As we have discussed before, in this new era of K-12 education, there many great things taking place in our schools that present unique opportunities for investors. While we could go on and on about the exciting things to come in the K-12 sector, this article outlines five trends to watch over the next year.

So, what major K-12 trends are we excited about? Let’s take a look.

1) Use of data: While school and district leaders use data for their ongoing improvement efforts in the same way that a business leader might, the use of data in education as we know it now is a relatively new phenomenon.

The passage of the No Child Left Behind law in 2001 ushered a new era of accountability to K-12 schools. While some leaders in education pushed back on the accountability (and many had good reason for doing so), new accountability measures brought new data-gathering requirements, including ways to measure the academic achievement of demographic sub-groups of students.

While accountability measures have been lessened in the newest reauthorization of the federal education law, states and local schools rely heavily on data for their improvement efforts and use it to focus on their bottom line: student achievement. In fact, as investors consider companies that are in the education space, a good question to ask is, “How will educational leaders measure the impact of this product or service?”

2) Personalization: Any of us who have more than one child know that children differ greatly. Some students struggle in one academic area but are successful in another, and all students differ in their areas of interest. With that in mind, much progress has been made in the last decade by educational leaders in their work to present a truly personalized learning plan to all students.

Think of the power of getting this right: every child in every classroom would receive a specific curriculum built around a set of learning materials that would build on that student’s current skills and interests. Moreover, their progress would be monitored and the curriculum adjusted as necessary.

While this level of personalization is not universal, it will be soon and presents one of the most interesting and exciting new trends in education. Investors, pay attention to this.

3) Micro-credentialing:We are currently preparing students for jobs that don’t yet exist … using technologies that haven’t been invented … in order to solve problems we don’t even know are problems yet.” That quote from former Secretary of Education Richard Riley is interesting for a number of reasons. First, it is important to note that Richard Riley was the secretary of education in the Clinton administration and left the Department of Education more than 16 years ago. To be sure, this quote was appropriate then, but it is even more so now, considering the rate of change in our society and economy.

In particular, this quote emphasizes the fact that an institution, K-12 education, or any form of schooling for that matter, can never become the be-all, end-all of education.

The focus of K-12 education is not in giving students the knowledge and skills for a future life of success, but in providing students with a knowledge foundation and the ability to learn and relearn as jobs and the economy changes. While a high school diploma or a graduate or postgraduate diploma is important now and will likely be so in the future, we must recognize that the economy will increasingly recognize specific skills.

Recognizing mastery of specific skills, or micro-credentialing, will prove to be important as companies focus on employees with a specific set of skills that is built on a sound, basic education.

Investors, be ready; this is an interesting facet of the education marketplace.

4) Standardization: Standardization as a general philosophy is not exciting, but in education and investing in education, standardization is important and worth our consideration. Let’s take a step back to consider the topic.

Nowhere in the U.S. Constitution is K-12 ever mentioned. K-12 education is, to be sure, a state-level effort. The problem is that, for generations, states differed greatly in what they expected students to learn and be able to do from grade to grade and subject to subject.

With the passage of the federal No Child Left Behind Act in 2001, the federal government extended a long arm into education and required states to have standards for student mastery and have tests that measured progress toward meeting benchmarks aligned with those standards. Because of the costs associated with textbooks and state tests, what was taught in the various subjects at specific grade levels became somewhat similar.

In 2009, work on the Common Core State Standard Initiative began. By 2015, most states had adopted most of the standards and the U.S. Department of Education began encouraging those that had not. While political pressure resulted in some states moving away from those standards, such moves are ultimately done in name only.

Whether you love the standards initiative or hate it — and there are many people on both sides of the issue — the fact remains that standardization has resulted in a situation where pedagogical and curricular products and services that have gained a foothold in one region can become a true national player. This should capture the imagination of investors who are looking to scale up a regional K-12 educational product or service provider.

5) Full focus on student outcomes: One of the hallmarks of education in the United States is that when we say all students are educated, educational leaders truly mean all. This includes students from every family, in every situation, and with all abilities. As I have said so many times, it is truly inspiring to see the effort by professional educators to serve all students.

While the “all means all” focus of education is thankfully a long-held principle, the ability to measure success toward that goal is, for many, a relatively new phenomenon, made possible with the availability of student data and the requirements for schools and districts to report academic success by demographic sub-groups. This created pressure on K-12 school and district leaders to improve their efforts in ensuring that all students are successful academically.

We see the “all means all” principle not only as one of the reasons we love education so much, but also as an opportunity for operators and investors to find success in the K-12 market.

While some see education as slow moving and stodgy, in reality it is fast moving and extremely dynamic. As educators from around the country prepare for a new school year, look for these trends. If you have any to add, we would love to hear from you!


Joe Donovan is the principal of Forward Advisors, a national private equity consulting firm that specializes in the K-12 educational marketplace. Joe can be reached at joe.donovan@forward-advisors.com or at (800) 393–5283.

Forward Advisors

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Forward Advisors is a national private equity consulting firm that specializes in the K-12 educational marketplace.

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