Pearson

This article is part of the Spinwatch privatisation of Schools Portal project.

Pearson is the world’s biggest educational company and a strong advocate of market-driven education reform.

It is also the world's leading book publisher.

Headquartered in London, it has 40,000 employees in 80 countries, although Pearson generates approximately 60% of its sales in North America. In 2014, it had revenues of $8.2 billion.

Research by ActionAid on company use of tax havens has shown that Pearson’s group structure includes 90 subsidiaries in recognised tax havens.

Pearson education business

Pearson provides a range of education products and services to institutions - schools, colleges and universities – and direct to individual learners, the 'retail' side of the business. It also has a 'wholesale' business selling education products and services to governments, such as testing services and examinations, and the management of education data.

It is organised into three main business groupings: Pearson School, Pearson Higher Education and Pearson Professional.

Pearson's reach in schools

Pearson publishes textbooks and digital technologies for teachers and students across school ages. Its brands include: Heinemann, Longman, BBC Active and Bug Club.

It also provides a vast amount of exams and tests (as well as practice assessments and online tutoring services aligned to tests). For example, Pearson owns Edexcel, which is the UK's largest and only for-profit awarding body. In the US, it produces standardised tests aligned with common core academic standards, and with the purchase of National Computer Systems in 2000 - for $2.5 billion, became the leading provider of test-scoring services with control of an estimated 60 per cent of the North American testing market.

It also provides assessments for teacher certification and teacher training around the world, as well as whole 'school improvement services'.

...too far?

Pearson's enormous reach in the schools market, particularly in the US, and the potential for conflicts of interests, has led to sustained criticism of the company.

As one US observer put it: 'Pearson has it all -- and all of it has a price. For statewide testing in Texas alone, the company holds a five-year contract worth nearly $500 million to create and administer exams. If students should fail those tests, Pearson offers a series of remedial-learning products to help them pass. Meanwhile, kids are likely to use textbooks from Pearson-owned publishing houses. Students who want to take virtual classes may well find themselves in a course subcontracted to Pearson. And if the student drops out, Pearson partners with the American Council on Education to offer the GED exam [high school equivalency credential] for a profit.'

Prominent education historian, Diane Ravitch has accused Pearson of 'acting as a quasi-government agency'. 'But it is not a quasi-government agency,' she said. 'It is a business that sells products and services.'

'What part of the field of education does Pearson not manage? At what point do conflicts of interest arise? Is it acting in the best interests of students, of the nation, or of its own business? These are questions that must be raised and answered,' said Ravitch.

Pushing data-driven, digital learning

Pearson is a vocal lobbyist and large investor in education technology. It believes:

'The future of learning is digital, personal and driven by data – and that it’s pretty much here already. We believe learning happens anywhere and everywhere, so we can’t focus all our efforts on the classroom. We believe literacy today is as much about code as it is learning to read and write.'

Pearson claims to have invested over $9bn in the digitisation and what it calls ‘creative destruction’ of education. 'By this I mean we’re intentionally tearing down an outdated, industrial model of learning and replacing it with more personalized and connected experiences for each student,' said Pearson Education's North American chief, Will Ethridge.

The company earns its revenue from the sale of digital content and online learning tools; student and teacher testing programs and services; data management systems, virtual schools and more.

It has achieved this digital shift by buying up education technology businesses and through partnerships with leading edtech firms. For example, it provides 'adaptive learning' products in partnership with Knewton - adaptive learning is where data and analytics are used to 'personalise' content, so that pupils can learn at their own pace. Another partnership it has entered into is with Apple, which sells iPads to schools preloaded with Pearson content (see controversy below).

Pearson digital education products and services include:

• Power School (www.powerschool.com): web-based student information system. It allows teachers to track pupils progress, as well as things like attendance and standards, and parents and students to monitor how well they are doing.
• Schoolnet (www.schoolnet.com): allows teachers to build and administer tests and collect data on student progress
• AIMSweb: helps teachers spot students needing additional help
• Fronter: a 'learning platform' designed to allow pupils to to learn 'whenever and wherever they choose'. Through it, pupils can: submit work, communicate with their teachers, and review personal study plans.
• TutorVista: provides online tutoring, homework help, test prep.

• Connections Education (www.connectionseducation.com): In 2011 Pearson bought Connections Education, a virtual public schooling provider. The deal made Pearson the second-largest operator of virtual schools in the US. As Tom Vander Ark commented, it signalled 'a more rapid move into school management than was anticipated' from Pearson. 'Historically, the line between supporting and operating schools has been one they did not want to cross given the special venom for private enterprise when it takes outcome responsibility,' he noted. In other words, Pearson knows the reputational risk from for-profit companies being fully responsible for pupils' education - when it merely supplies the materials and tests, the school can be blamed for poor standards.

Pearson also supports the development of edtech businesses through:

• Learn Capital: Pearson is the biggest partner in this US education venture capital firm that invests in education technology startups.
• 'Pearson Catalyst for Education' (catalyst.pearson.com) is an accelerator programme run by Pearson that matches edtech startups with Pearson brands to deliver pilot programs.

Selling private schooling to the poor

Over the past five years Pearson has grown its education business in emerging, fast growing economies. It has achieved this by buying companies in the space, such as the Chinese English language test preparation provider Global Education and Technology Group (acquired 2011), and Grupo Multi, Brazil’s largest network of adult English language schools (acquired 2013).

Among its investments are, what have been dubbed, low-cost, or low-fee private school chains.

Bridge International Academies

Bridge International Academies (BIA; www.bridgeinternationalacademies.com) claims to be the world’s largest chain of primary and pre-primary schools delivering low-cost private schooling across Kenya and Uganda.

The key to BIA’s rapid growth is the standardisation of its operating model; the company has developed an 'academy-in-a-box' model, which is reliant on the use of technology in both the running of the school and teaching: a single manager runs the school with all back office processes automated via a smartphone application; teaching is delivered via a scripted curriculum with everything from the delivery of lessons, to testing and pupil attendance tracked by headquarters via the use of teacher tablets.Teachers (all high school graduates) are provided with five weeks training before entering classrooms.

BIA was founded in 2009 with a $1.8 million investment from the Omidyar Network (founded by eBay founder Pierre Omidyar). It receives further funding and support from: the UK's Department for International Development (DFID); International Finance Corporation of the World Bank; Overseas Private Investment Corporation (OPIC; US government investment); Bill Gates; Mark Zuckerberg; Novastar Ventures; Khosla ventures; and Pearson, which invested in Bridge via the Learn Capital fund (see above).

President of the World Bank, Jim Yong Kim, praised Bridge in a recent speech for using new technology to help transform educational outcomes: 'Bridge International Academies uses software and tablets in schools that teach over 100,000 students in Kenya and Uganda. After about two years, students’ average scores for reading and math have risen high above their public school peers. The cost per student at Bridge Academies is just $6 dollars a month.' However, as a group of 100 civil society organisations pointed out in protest: Bridge provides technology only for teachers (as a way of reducing the need for qualified teachers and costs); the test scores cited were from a study financed by the company itself; and finally fees vary by grade, and the $6 mentioned in the speech is the lowest fee charged (Bridge also charges for exams, uniforms, and other expenses). In reality, costs per child range from $9 to $13 a month (plus an additional $7 per month per child for food).

Private schools damage the public good

Many in education and international development have criticised the model of low-cost private schooling of the type offered by Bridge. They argue that while it is understandable that parents want to send their children to private schools, often for lack of alternatives, it is poor public policy to promote them. Education privatisation increases inequality, provides no learning gains, and de-professionalises teachers. As Kishore Singh, the UN special rapporteur on the right to education writes:

'The cost of privatising education lies not just with school fees but also with the damage done to the public good. Fees, however small, hit the poorest and most vulnerable hardest. Sometimes, this means the oldest son receives an education while daughters stay at home. Inequalities in society grow when the poorest are excluded... The international development agenda must aim to eliminate private schools, not champion them.'

Pearson, however, sees low-fee private schools as a solution to an unmet need, and, more significantly, an opportunity to profit.

Pearson Affordable Learning Fund

Pearson launched the 'Pearson Affordable Learning Fund' (PALF; www.affordable-learning.com) in 2012 as a for-profit venture fund to invest in low-cost private schooling in emerging economies. The fund makes investments in for-profit companies 'to meet the demand for affordable education across the developing world,' it states. With an initial investment from Pearson of $15m, it is chaired by Pearson's Michael Barber and managed by Katelyn Donnelly.

PALF is part of Pearson’s business strategy of looking for and venturing into new markets and uncovering new market opportunities, which in the case of PALF, is the need and ambition of the poor in developing countries to give their children a good education. Pearson argues that access to education and student achievement represent a major challenge for education systems in developing countries, and that the public sector alone is not sufficient to tackle the problem. It will require a joint effort from both governments and the private sector, it says. Yet, as academic Stephen Ball notes, as well as having a social aim, the creation of PALF is a 'very decisive business commitment to education for the poor as a profit opportunity... and healthy returns on the fund’s investments are anticipated.'

To date, PALF's investments include:

• Omega Schools, a chain of Low Fee Private Schools operating in Ghana co-founded in 2009 by James Tooley. It operates on a ‘school-in-a-box’ model, allowing it to replicate more widely. The model involves the basic construction of a 12-classroom building, along with the initial materials and resources needed to run the private 'storefront' school. Beyond the start-up costs, the schools are financed on a daily-fee – or ‘pay-as-you- learn’ – payment system.
• Affordable Private Education Centres, a chain of low-cost secondary schools in the Philippines.

Pearson has also invested in broader, non-teacher based, commercial education ‘solutions’, including education technology business, such as:

• eAdvance, a company that manages the first South African blended learning low fee school chain called Spark schools.
• Zaya Learning Labs, a provider of blended (online) learning experiences to government and low-fee private schools in India.
• Avanti Learning Centres, a provider in India of college entrance exam preparation for students of low-income families based on peer-to-peer learning and self-study,

Due to limited investment opportunities in emerging markets, Pearson is also creating and developing strong 'enterprise ecosystems' in countries, and supporting earlier stage edu-businesses.

• Edupreneurs is a Pearson incubator business programme run in partnership with Village Capital operating in India and across Africa.

Lobbying for education reform

Pearson's shift from being mainly a publishing and media company to a global edu-business has been accompanied by an increase in lobbying and its involvement in policy debates.

As Alice Hunt, director of communications for Pearson's non-US operations explained in 2012:

'That [shift] created in us an awareness of education debates around the world and the need to contribute to them. We see our contribution to these debates as a really important part of the overall discussion, which embraces governments, other policymakers, civil society groups and so on.'

Stephen Ball, professor of the sociology of education at London University's Institute of Education and an expert on education business, has this to add:

'I think it's related to an overall strategy: they want to offer products and services in all areas of school practice: assessment, pedagogy, curriculum and management, and they want to create the possibility for that through policy work. They want to have indirect influence in policy to create opportunities for business expansion. It's a very well thought-out business strategy. I think we should be thinking about it, because a lot of it is going unnoticed.'

Pearson has implemented a sophisticated, global lobbying operation. It encompasses a number of different strategies, including:

• Building relationships with policy-makers at all levels.
• Lobbying through third parties, such as think tanks, campaign groups, teachers and pupils
• Producing research to develop a supportive evidence-base
• Sponsorship of education policy debates

Close relations with UK government

In the UK, Pearson has close ties to a number of government departments, developed through informal lobbying, which is helped by the movement of people between Pearson and government (the so-called revolving door); and through more transparent, official relationships.

What is obvious, is that the UK government and Pearson have a number of mutual interests and, more broadly, both are concerned with growing the market for educational products and services around the world.

Mutual interest in market reform of education in developing countries

• Since 2011, Pearson's Michael Barber has been the UK Department for International Development's (DFID) 'special representative in Pakistan. Barber has been drafted in (unpaid) to work on the reform of Pakistan's education sector with ex-McKinsey & Company colleague Katelyn Donnelly. Donnelly has acted as an adviser to the Punjab Education Reform Roadmap, launched in 2011, which is DFID’s flagship education project in Pakistan. Barber works with the Chief Minister of Punjab to provide strategic advice and political momentum to the Roadmap. One of the aims of the reforms is to expand low cost private schooling in the country. Pearson stated, however, that it has an explicit agreement with DFID to ensure that his role does not advantage Pearson, and that Pearson’s Affordable Learning Fund has no current investment in Pakistan and has made a point of not investing, to avoid a conflict of interest.

• DFID and Pearson have a shared interest in Bridge International Academies (see above). DFID’s Impact Fund – a 13 year project worth £75 million managed by CDC, DFID’s ‘principal mechanism for leveraging private sector investment’ in developing countries - invested in the venture fund, Novastar which has recently invested in Bridge International Academies. Pearson invested in Bridge via the Learn Capital fund (see above).

• DFID’s flagship education project, on which it is spending a massive £355 million during 2011-17, is the 'Girl’s Education Challenge', which is being managed by PwC on the department's behalf. Under the Girls Education Challenge, DFID is funding a project in Tanzania and Zimbabwe involving a partnership between Pearson and Camfed, an NGO which provides funds for children to attend school. Pearson will train and certify 'Learner Guides', young women who have graduated from secondary school with Camfed’s support.

• Pearson is also a member of the Funders Platform of the US based Centre for Education Innovations, a body set up and funded by DFID. This Funders Platform ‘allows donors, foundations, companies and investors to share information on their non-state education policies and programmes in developing countries’.

• (Pearson is also leading a team charged with delivering DFID's 'Global Learning Programme', which is a project to teach international development and global issues in UK schools).

Mutual interest in selling ‘Education UK’ abroad

The UK government's 'International Education Strategy' was launched from Pearson's London office in July 2013. The Strategy, jointly owned by the Department for Business, Innovation and Skills and the Department for Education, outlines the government's plans for capitalising on the export opportunities from international education.

Universities and Skills minister, David Willetts writes in the foreword:

'Quite rightly our education system is envied on many levels, stretching beyond our academic excellence. Other countries are attracted to the expertise that UK institutions and organisations can offer on governance models, on professional development and curricular design, on construction, on the international reputation of our qualifications and on management and finance. The attraction also extends to the innovative equipment and technology solutions that our educational suppliers are constantly developing.'

Welcoming the initiative, Pearson’s CEO John Fallon said that over the next twenty years, education will come to be seen as a one of the new global growth industries.

Pearson president Rod Bristow is also a member of the government's International Education Council, established at the same time with the remit to 'act as a champion and advocate for the ‘Education UK’ brand'; 'provide pragmatic leadership, co-ordination and strategic direction' to the government; and 'ensure effective communication and engagement with all parts of the sector, industry and government'

Lobbying local decision-makers in the US

The New York Times reported in 2011 that the Pearson Foundation, the now defunct nonprofit arm of Pearson, was paying to send school officials to international conferences where Pearson products were promoted and they met with Pearson executives.

Michael Winerip of the Times reports:

'In recent years, the Pearson Foundation has paid to send state education commissioners to meet with their international counterparts in London, Helsinki, Singapore and Rio de Janeiro. The commissioners stay in expensive hotels, like the Mandarin Oriental in Singapore. They spend several days meeting with educators in these places. They also meet with top executives from the commercial side of Pearson... Pearson would not say which state commissioners have gone on the trips, but of the 10 whom I was able to identify, at least seven oversee state education departments that have substantial contracts with Pearson.'

Pearson 'categorically refuted' any suggestion or implication that the arrangement was designed to enable Pearson to win contracts, and said that the trips are 'in pursuit of educational excellence'. Experts in tax law, quoted in a subsequent article, said that Pearson appears to be using its foundation to push its business interests. Another commentator compared the practice to pharmaceutical companies that run junkets for doctors or lobbyists who fly members of Congress to holiday getaways.

Lobbying through third parties

Think tanks: UK

Some think tanks are indistinguishable from commercial lobbying agencies, in that they provide the same services: they can provide funders with access to politicians and help them project their messages to the media. They also help corporations by providing a supportive, supposedly independent voice in policy debates.

Pearson has sponsored a number of influential UK think tanks in recent years, including:

• Policy Exchange: for example, Pearson funded an event in March 2015, which featured a speech from Blairite former minister, Alan Milburn on 'Education’s role in promoting social mobility'.

• Reform: for example, Reform collaborated with Pearson on its Leading on Standards 'consultation' in 2012. Reform moderated a series of seminars as part of the consultation process. The initiative came on the back of a review of standards by the regulator Ofqual, and a highly critical investigation by the Telegraph into exam boards, including Pearson's Edexcel.

• CentreForum: for example, Pearson sponsored a report in Jan 2015 by CentreForum on testing and tracking in primary schools called Progress matters in Primary too: Holding schools to account consistently. In the acknowledgments, CentreForum thanked Pearson for its support and particularly to Bob Osborne, its former Strategic Development Director and Julie McCulloch, Director of UK Policy & Thought Leadership at Pearson.

• Institute of Public Policy Research: the IPPR published a report in 2012 by Pearson's Michael Barber and Katelyn Donnelly called Oceans of Innovation: The Atlantic, the Pacific, global leadership and the future of education.The report, according to Barber, was 'the result of constant dialogue among the authors as we’ve worked together, first on education reform in Pakistan (in which we are still involved), and second as part of an innovative team at the heart of Pearson, where we are seeking to resolve the dilemmas of providing quality education to people of all ages on every continent'.

Education reform lobbyists: UK

Pearson also promotes its agenda through partnerships with organisations that lobby for education reform.

• Nesta: A 2014 report by UK charity Nesta and Pearson called for more evidence that education technology 'innovations' actually improve outcomes for students. From Good Intentions to Real Impact: Rethinking the role of evidence in education businesses argues that education businesses need to move away from 'conceptualising impact in terms of financial return', to a situation where the social impact can be robustly measured and understood. The report's foreword was by Pearson's Michael Barber. It is part of Pearson's 'Efficacy Framework', launched in 2013 (see below) with a promise to 'put the pursuit of efficacy and learning outcomes at the centre of our new global education strategy.' A previous report published by Nesta and authored by the Canadian school reformer, Michael Fullan, and Pearson's Katelyn Donnelly, was also concerned with the quality of digital innovations in education. Alive in the Swamp: assessing digital innovations in education (2013), argued that edtech founders, funders and teachers should look for edtech products that 'produce at least twice the learning outcome for half the cost of our current tools'.
• Teach First: Pearson teamed up with UK charity Teach First on MyEducation, a campaign launched in Parliament in November 2013 that 'aims to ensure young people's views on their education are listened to'. Pearson also ran a MyEducation 'invite-only' roundtable at the Conservative Party conference in October 2013.
• British Council: Pearson is also described as a 'client' of the British Council.

Education reform lobbyists: US

Education reform lobby groups in the US that Pearson has funded include:

• Foundation for Excellence in Education: Pearson is a corporate donor to Job Bush's education reform lobby group.
• New Leaders for New Schools (www.newleaders.org): in 2010 the Pearson Foundation donated $3m to New Leaders for New Schools, which runs school leadership programs, and lobbies for policies that support this work. It was founded by Jonathan Schnur, former education policy analyst for President Bill Clinton and Ben Fenton, former management consultant at McKinsey & Company.
• New Media Consortium (www.nmc.org): Pearson is described as a 'Marketing Partner' of the New Media Consortium, now known as NMC, which describes itself as an 'international community of experts in educational technology'
• America’s promise Alliance: Pearson is a donor to the America’s promise Alliance
• Digital Learning Alliance: Pearson was among a small group of companies that helped formulate the pre-launch planning and development of DLA

Sponsorship and participation in education debates

Pearson is a regular sponsor of education debates around the world. For example:

• Pearson are 'Gold sponsors' of the Education World Forum, dubbed ‘the largest gathering of education and skills ministers in the world'.
• Pearson is described as an 'industry partner' of the World Economic Forum.
• Michael Barber, Chief Education Advisor of Pearson, has spoken at the World Innovation Summit for Education.

Pearson: positioning and campaigning

Pearson has invested heavily in its positioning and messaging in recent years.

It portrays itself as having a positive, and measurable, impact on society. It has also positioned itself as an increasingly powerful global policy actor in education. Its 2012 annual report included a commitment to 'playing an active role in helping shape and inform the global debate around education and learning policy. Pearson states:

'When we talk about our social impact, we might point to the children in the poorest communities that are now in school for the first time in their lives. We might talk about the young innovative companies we’re helping to develop, or the global policy consensus we’re trying to forge.'

Pearson has executed a number of high profile campaigns that have introduced and reinforced this positioning, including:

• The Learning Curve: this database is designed, according to Pearson, to 'help governments, teachers and learners to identify the common elements of effective education'. It provides access to, for example, over 60 internationally-comparable datasets on educational input and output indicators.

• Open Ideas (which incorporated Pearson's own 'think tank') is a website created by Pearson to 'help make the best evidence and ideas about learning accesible to all, and to encourage open debate about what works in education'.

• Pearson’s Efficacy Framework. In November 2013, Pearson made a commitment to report publicly on the impact of its products and services as per external audit, by 2018. The Efficacy Framework is a tool that, Pearson says, 'uses a tried and tested method to help understand how products or services can achieve their intended outcomes or results'.

People

(As of August 2015)

Board of directors

• Glen Moreno, chair; he is due to step down in 2015.
• John Fallon, CEO since 2012
• Coram Williams, Chief financial officer
• Elizabeth Corley, non-exec director
• Vivienne Cox, non-exec director
• Joshua Lewis, non-exec director
• Linda Lorimer, non-exec director
• Harish Manwani, non-exec director
• Tim Score, non-exec director

Former board members

• Dennis Stevenson, former chair (to 2005)

Pearson's UK education business board

• Sir David Melville, chair
• Rod Bristow, President, Core Markets
• Mark Anderson, Managing Director, Pearson UK
• Catie Sheret, Associate General Counsel
• Lesley Davies, VP Quality, Standards and Research, Pearson UK
• Sharon Hague, VP Pearson Qualification Services
• Sally Johnson, SVP Finance
• Iain Mackinnon, non-exec director
• Stephen Grix, non-exec director
• Roger John Lloyd Murphy, non-exec director
• Margaret M Wilson, non-exec director
• Amarjit Basi, non-exec director
• Richard Price, co-founder BPP Group

Pearson Affordable Learning Fund

• Katelyn Donnelly, MD and co-founder, as well as an adviser on Pearson’s global strategy, efficacy, research and innovation agenda, and a consultant to governments on education system transformation and delivery. Donnelly is also a partner at Delivery Associates, a public sector reform consultancy led by Michael Barber; Donnelly was formerly a consultant at McKinsey & Company.
• Amar Kumar, Pearson’s Senior Vice President of efficacy; formerly working within McKinsey & Company's Education and high-tech practices

Lobbyists

• Michael Barber, Chief Education Adviser to Pearson and a vocal advocate of education reform around the world; formerly with McKinsey & Company; and before that was Head of Tony Blair’s Delivery Unit.
• Kate James: chief corporate affairs officer (from 2014); former spokesperson for the Bill & Melinda Gates Foundation.
• Dan Mullaney, director, government affairs (Washington).
• Martin O'Donovan, VP, government relations, UK & Europe; former director of the Parliamentary Labour Party (Oct 2007-Oct 2012).
• Sam Cunningham, corporate affairs director, Australia and Singapore; responsible for 'corporate reputation building through thought leadership campaigns'. Former Department for Education press officer (2007 - January 2011), Cunningham was press officer to current schools minister, Nick Gibb; he was before that private secretary to Lord Andrew Adonis, former Labour education minister.
• Natalie Whitty, VP, markets strategy, corporate affairs; Whitty says her role includes: ongoing, contentious (at times relentless) issues management with long term strategy development, working with the most senior leaders to further our contribution to education and strengthen our reputation.
• Steve Besley, head of UK education policy; former head of policy at Edexcel.
• Alice Hunt, director of communications for Pearson's non-US operations
• Jonathan Angliss, SVP corporate affairs for growth markets. Formerly of lobbying firm Weber Shandwick

Former lobbyists

• Tom Richmond, former associate director at 'Pearson Think Tank' (2013); current policy adviser to skills minister Nick Boles.

Lobbying firms

UK lobbying firms

• Blue Rubicon (to 2014)
• Weber Shandwick (to 2014)
• Hanover (to Dec 2011)
• Genesis Burson-Marsteller (India; 2011)
• Brunswick (reported in 2006)

US lobbying firms

• Bryan Cave LLP (to 2014)

Contacts

Head offices:

London: 80 Strand, London, WC2R 0RL

New York: 330 Hudson St, New York, NY 10013