Ei-iE

Despite promises, Pearson's prospects for growth remain slim at best

published 2 November 2016 updated 2 November 2016

By Dr Anna Hogan, University of Queensland, Australia

A dramatic stock decline and profit far below expected levels are a blow to the education corporate giant's development plan, and a symptom that it has become a toxic brand in the eyes of many.

We often hear of Pearson’s unbridled success, summed up by its effective business strategy and its ever-growing stranglehold over global education policy and practice. And, it does make billions of dollars in sales each year. However, despite this apparent success, it is important to realise that for the past few years, the education market has not been kind to Pearson, or its shareholders. Since 2012 – about the time Pearson engaged in a £220 million restructure to focus entirely on its future as an education company – it has failed to make any significant headway. Its annual sales have plateaued and its adjusted operating profit has fallen.

Unfulfilled promises

In Pearson’s 2014 annual report, CEO, John Fallon, thanks shareholders for their patience with the company’s restructure and promises that in 2015, Pearson’s profits will start to “grow again” as the transition is completed and Pearson’s new education work stabilizes. Yet, in the recent release of its 2015 results, we see that this has not been the case.

Pearson has had four profit warnings in three years, and in 2015, it suffered a dramatic stock decline. Fallon recently announced a plan to cut 4,000 jobs, or 10 per cent of Pearson’s global workforce, to help generate £350 million in savings by 2018. He believes that Pearson has been working against “cyclical and policy-related factors” that have been “more pronounced and extended than we expected”. He suggests that these factors include the drop in U.S. college enrollments, changes in school accountability measures in England and Wales, and a significant reduction in textbook sales, especially in South Africa. And to be fair, these are genuine factors that have affected Pearson’s performance. However, a number of social commentators argue that even if these markets stabilize for Pearson, its brand has become so toxic that its prospects for future growth are slim.

Symptoms of a worldwide decline in reputation

Pearson claims it is having a positive impact on global education and helping to improve learner outcomes. In fact, it asserts its mission is to help ensure better learning outcomes “in individual classrooms, through broad partnerships with public and private education institutions and, in certain markets, by directly expanding capacity through our own schools and colleges”. However, commentators critique Pearson as a global education pariah that has a business strategy that works to undermine the very fabric of democratic education. The general consensus of these critiques is that Pearson has worked to influence education policy and practice for its own commercial agenda.

For example, in the Global North Pearson’s involvement in testing has helped facilitate the standardisation of schooling that has had reductive effects on curriculum and teaching and learning processes. Moreover, its assessment work is progressively plagued by controversies, including poorly constructed test items, the inappropriate monitoring of students on social media, as well as placing gagging provisions on teachers to prevent them speaking out about test errors. Increasingly, education systems are distancing themselves from Pearson and contracting other providers to do their assessment work.

Similarly, in the Global South, concern is expressed about the ethical implications of Pearson’s support for low-free private schools that seek to profit from some of the world’s poorest families. To make matters worse, these schools have been reported as low quality and they employ underqualified, lowly paid, non-unionised teachers. These schools have been challenged as contributing to a degradation of basic human rights given every individual deserves access to free, universal, high quality, public education; and these schools are allowing governments to shift responsibility for education provision to the private sector.

Civil society increasingly mobilised against Pearson

Interestingly, there is growing opposition to Pearson’s commercial activities. This movement is driven by traditional education activists in the form of teachers and teacher unions, but also extends to concerned parents, journalists, bloggers and other members of civil society. These actors are all turning their research, political gaze and activism to join together and collectively strategise how they can hold powerful and influential corporations like Pearson to account. Importantly, their voice is being heard, and it is clear education consumers (governments, systems, schools, teachers, parents and so on) are becoming more aware of, and more critical of, their complicit role in the expansion of education commercialisation.

By Pearson blaming cyclical factors for its recent performance, it seems to be underestimating the role of politically astute activists and the work they have been doing to educate civil society about education commercialisation. Through sharing information and organising movements against Pearson, these activists are working to gradually influence the reduction of exploitation and inequality in global education. Their achievements may not be obvious in the short term, but as long as concerned individuals embrace hope and the possibility for change, their activism will work to reshape the future and prevent the corporate takeover of public education.

The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.