Industry overview

The size of the global higher education sector - including all public and private expenditures at the tertiary level - is estimated to exceed one trillion dollars. After nearly one thousand years during which the delivery model ("sage on the stage") has remained virtually unchanged, higher education is undergoing transformative change. Structural shifts such as massification (access in Emerging Markets), globalization, technology (e.g. online, mobile), rise of private supply and system transformation (i.e., public-private partnerships) are disrupting traditional higher education and opening the door to a greater role for innovative private sector models.

The pace of change is accelerating as US and EU governments pursue fiscal austerity policies and reduce public higher education funding (to allocate scarce resources elsewhere) at varying speeds and degrees in each market. In the US, 70% of students attend state-subsidized institutions and half of state university systems reported funding cuts for fiscal 2012. In Europe, the UK is leading the way with vast changes including market-based pricing, increased competition for student among public institutions and dramatic cuts to higher education teaching budgets.

In sum, the world of Higher Education will change dramatically over the coming decades, creating enormous opportunities for entrepreneurs and investors to play a transformative role in improving the quality of higher education and resulting student outcomes in the U.S., Europe, and globally.

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