The situation on the market of private secondary education in Russia can be characterized as follows: so far, only a small part of schoolchildren are covered by private schools. At the same time, the demand for it is great and far exceeds the supply. However, there are factors that hold back the growth of the supply, due to which the market is not growing as fast as it could. The question is to what extent the education business will be able to find solutions to help it overcome these obstacles.
So, how many students go to private schools? A study by the Center for the Economics of Continuing Education of the Institute of Applied Economic Research of the Russian Academy of Sciences of the Russian Academy of Sciences reports that in 2023 there will be slightly more than 200,000, which is 1.14% of the total number of students in secondary educational institutions. According to the Higher School of Economics, there are about 900 school divisions in the country today. The founder of the project ONE! International School Maxim Natapov notes that in terms of the level of development of private education, Russia shows one of the lowest national indicators. Curiously, however, these low rates exist amid a general belief that private education is better.
The reason is simple: school districts, like any market structure, try to emphasize what the customer needs, in this case – children and parents. In the analytical report prepared by the Higher School of Economics “Private schools of Russia: state, trends and prospects of development”, it is noted that the most important difference of private educational institutions is their customer orientation, they try to take into account the request of parents for the quality of education. A survey of heads of private schools conducted by the Association of Non-Profit Educational Organizations (AsNOOR) showed that, according to school principals, a teacher in a private school should be more interested in the opinion of parents and periodically report to them.
Private schools expect an individual approach to students, more comfortable learning conditions and more in-depth study of the most important general education subjects. Managing partner of Rybakov PlaySchool network of private schools Irek Alayarov speaks of a huge public demand for quality education.
At the same time, the director of the Center for General and Further Education of HSE Sergei Kasaretskyi believes that precisely in Moscow, where there are many strong public schools, the advantages of the private sector are manifested primarily in deeper study of foreign languages, and in some cases – in preparation for admission to foreign universities.
First Deputy Chairman of the State Duma Committee on Education and Science, Deputy Oleg Smolin suggests that private schools are more open to educational innovation because they are less bureaucratized than public ones. The leading researcher of the Center for Economics of Continuing Education of IPEI RANHiGS agrees with him Aleksey Tishchenkowhich confirms that it is in private schools that personalized and proprietary teaching methods are widespread. According to the expert, private schools are less affected by the trend towards unification of education, characteristic of the public sector. Maksim Natapov attributes the ability to accurately balance the development of hard skills, soft skills and perspective in the educational process, as well as zero tolerance for bullying, among the good qualities of the best private schools. How does this good reputation of private education affect the growth of the segment?
According to RANHiGS, from 2016 to 2023, the number of students in Russian private schools has almost doubled. The researchers name Moscow, St. Petersburg, Tatarstan, Krasnodar Territory, Dagestan, Chechnya, and the Jewish Autonomous Oblast among the regions where particularly fast growth rates of this indicator are observed. According to the results of the survey conducted by the “Just Learn” portal, the revenue of St. Petersburg private schools increased from 2.9 billion rubles to 4.7 billion rubles from 2019 to 2022.
It would seem that the growth rate is quite high, and yet the demand is far from satisfied. Yes, in any case, Maksim Natapov (ONE! International School project) thinks. In the schools of the project ONE! there is a competition of 10-12 people for a place.
“We have no competition on the market, we have an extreme shortage of good private schools, and the shortage creates competition,” the expert notes.
Why is supply not keeping up with demand? An important specific problem of the education business is that it is difficult for a private school to recruit customers if it does not have a reputation and a brand, and gaining a reputation is a long process.
“Those entrepreneurs who enter education go through a difficult period of formation of understanding, standards, technologies and reputation,” says Maksim Natapov. – And, as in any business, up to 90% of startups in education do not survive the initial development period. We now know a lot of examples of schools and kindergartens that are closing. If you start working independently under your own brand, you will need 5-10 years to build a reputation, and in the conditions of the rapid development of new technologies, the project may simply lack the strength and resources to build effective management, and test new technological solutions, and achieve high educational results”.
Franchises are one of the solutions to this problem. If you believe the head of the catalog Franshiza.ru Anna Kolyadnayafor the past 5 years, children’s education franchises have been consistently among the most popular on the Russian market. The reasons for this are the high demand and the fact that a private school can be not only an object of investment, but also a niche for self-employment: people with pedagogical education or organizational skills can invest in a private school not only money, but also their work .
Although in the field of education, there are more franchises of kindergartens, as well as various courses and clubs, but there are also franchises of full-fledged educational schools, for example, “Smart School”, “Guarantee of Knowledge”, ONE! International School, “Maximum”. Buyers in such cases purchase a ready-made educational course, teaching methods, organizational consultations, sometimes, as in the ONE! project, – Unique digital tools for organizing the educational process using video analytics based on generative AI and a modern library of technologies with a digital analysis module.
A well-developed franchise can be a partial solution to other market problems: the shortage of qualified teaching staff and premises. The franchise of the most advanced educational projects provides access to digital tools that allow you to use the work and time of teachers more efficiently, and, if necessary, to organize distance learning.
“For those entering the market, I would recommend using it some kind which has proven itself as a technology and brand, thereby saving time, money and minimizing risks from activities in such a socially significant sphere,” says Maksim Natapov.
And the solution to the problem of the shortage of free spaces is that some schools can sometimes abandon the concept of a single campus, the premises of individual classes are in different places, but in this case it is important to fulfill all the requirements of the regulator.
As private education develops, competition between the private and public sectors for the best educators will undoubtedly increase. It is hoped that this will contribute to the modern development and improvement of the financial situation of teachers, which is an important outcome for all of us.