How Pearson is making a mint in education

From The Sunday Times / February 11, 2007
A lesson for all media groups
Dominic Rushe in Texas on how Pearson is making a mint in education

LIKE many students, Alfred Mora had found concentrating in class difficult and the 17-year-old was in danger of failing history and not graduating. “Sometimes there just seemed to be too much going on,” he said.
But Mora didn’t seem to be having trouble finding his focus sitting at a computer terminal in a quiet classroom at Austin High School in Texas last week. Clicking through a series of questions about the first world war, he said: “I find it a lot easier to concentrate in here. It’s explained in a different way and I can go at my own speed.”
Mora is one of half a dozen students taking what the school calls Delta, and the scheme is making millions for the British media and publishing group Pearson. With Delta, lessons are taught online; pupils can flick back and forth to make sure they understand what they are being taught. They can catch up at their own pace and if they have any questions, there is a teacher on hand to help.
Like Mora, Mayra Barrios, 17, often finds classes “too distracting”. She is taking English, maths and psychology in Delta and hopes to study criminal justice.
“Students in here have failed for lots of different reasons and I’ll guarantee it’s not because they can’t do it,” said John Garcia, the teacher supervising the Delta students.
Austin High School may have more than the average number of famous alumni — including George Bush’s daughter Jenna and Kinky Friedman, the musician, politician and crime novelist — but it is a fairly typical school.
Its 2,200 pupils make up a diverse cross-section of Texas’s economic and social backgrounds. As is normal, two armed police officers patrol the grounds. And, like all US high schools, Austin is undergoing a teaching revolution.
Ever since the rise of Japan in the 1980s, America has been worried about losing its competitive edge.
Education has long been seen as the tool best suited to sharpening that edge and America spends $440 billion (£226 billion) a year on schooling. But until recently nobody has tried to measure how effective that spending has been.
Now, thanks to a combination of technology and legislation, the country is keeping tabs on it. And it is proving a bonanza for Pearson.

Educators talk of a “teach and learn cycle” that technology can create. The British government calls it “personalised learning”. Children can be taught, then tested and the results used to identify areas where individuals are having difficulty.
Austin pupils may know the course as Delta but it is known as Novanet to Pearson, which counts Penguin books and the Financial Times among its assets.

Novanet is part of a rapidly growing portfolio of high-tech education programs Pearson is selling to the US schools market.
Pearson now stores the school records of some 50% of US school students. Everything from age, race, sex and attendance to grades goes through its computers. Long a provider of text books, Pearson is remodelling itself as a “solutions provider”, hoping to combine its traditional text book content business with its high-tech test scoring and information-gathering arms.
It seems to be a winning formula. In California, the company recently won the contract to provide a new high-tech text book and computer program teaching kindergarten and junior school children history and social science. Alongside the book, inter-active computer programmes offer songs and video as well as options for teachers to conduct the lesson in Spanish or other languages. It is the first of its kind, and unlikely to be the last.

Even the exam marking is high-tech. Tests are scanned and then sent digitally to examiners, allowing more than one person to work on the test at the same time. Pearson has computer programmes that can assess essays — analysing content and style.

All this technology means education packages that were once stuck in one country, and perhaps even one state, could now make their way across the world.

This summer Pearson’s Ed-Excel, which marks GCSEs and A-levels, will start testing out computer marking as a back-up to the usual human-scored checks.

When the initiative was announced, Sir John Mortimer, the dramatist and Rumpole crea-tor, described computerised essay-marking as “lunacy”. “How can a computer listen to the sound of words? How can it decide whether ideas are original or not?” he said.

Somewhat later than their pupils, schools are embracing technology. But not for its own sake, said Darlene Westbrook, Austin’s chief education officer. Before Delta and other schemes were introduced, “we had too many kids dropping out simply because they hadn’t gained the [school] credits they needed to graduate,” she said. Austin’s school district is 57% Latino, and 20% are characterised as “English language learners”.

The first step to improving education in the area was to create standards for everyone and to test for them regularly, said Westbrook. “Our preference is not for a virtual school, it is to keep them in school,” she said.

But more than that, all these initiatives must be accountable, she said. “We are in a global economy. We produced 70,000 engineers last year, China produced 90,000. We have fewer kids than the Chinese. We are losing ground. If we are going to be a world leader we need to ask ourselves how long can we continue to be a country that doesn’t learn another language?”
“The US used to be No 1 in the percentage of kids that went to college, No 1 in college graduates and so on and so on,” said Steve Dowling, president and chief executive of Pearson School Companies. “Now we are No 14 in college graduates and we’ve dropped down the list in so many other areas.”

Before the terror attacks of 2001, George Bush’s ambition seemed to be to go down in history as “the education president”. Across America, poor children lag far behind their advantaged peers in school achievement, and the former Texas governor ran his presidential campaign pledging to close that gap. Six years on it seems unlikely history will remember Bush for his education reforms, but he has had a profound impact.

The No Child Left Behind Act of 2001 promotes testing and achievement with the promise of extra support to needy schools and students. NCLB’s effectiveness continues to be a matter of controversy, but it has brought the idea of accountability in education under the spotlight and is part of a wider movement towards measurable standards.

For Pearson the act came just in time. Dame Marjorie Scardino, Pearson’s Texan-born, London-based chief executive, has focused the British company on education in her 10-year tenure. In 1998, Pearson spent $4.6 billion to buy Simon & Schuster’s educational assets and in 2000 spent $2.5 billion on National Computer Systems (NCS). Some analysts criticised Pearson for overpaying in what was then the largest-ever UK rights issue.

Before the purchase “we weren’t a testing company”, said Scardino. “What we had was a lot of great content that we could only deliver in book form. We needed the ability to marry that content with student data to make it relevant for each child.”
The extent of Pearson’s testing ability is on show a few miles from Austin High School at NCS’s enormous test-marking site close to the airport. The facility is capable of handling 3m paper tests a day.

It is an impressive — and expensive — business. Analysts estimate Pearson’s education business will make an operating profit of £396m in 2006. In 2000, before the NCS acquisition, it made £237m and in 1998, before Pearson bought Simon & Schuster, the figure was £99m.

As American education is increasingly driven by technology and accountability, NCS’s ability to offer high-tech testing and measuring combined with Pearson’s skills in text books has proved a winning formula.

Pearson’s strategy has its risks. With all this investment, losing a big contract in Texas, Florida or California would be a serious blow. But, as many other media companies are finding, there is a greater risk in failing to embrace the future.
Educational publishers have “a stark choice: invest in technology and systems that power interaction ... or exit the business now while valuations remain attractive,” Dresdner Kleinwort analyst Usman Ghazi said recently.

This week Reed Elsevier releases its results, and its education business, Harcourt, is again expected to drag. There has been speculation that Reed may sell off its education assets. The company refused to comment.

Canadian giant Thomson is selling its higher-education business and Holland’s Wolters Klu-wer has also put its schools business on the block. And last year Dublin-based educational software maker Riverdeep bought America’s fourth-largest textbook publisher, Houghton Mifflin.

Just like the children they help to instruct, the world’s education businesses are undergoing a “teach and learn” cycle. If they can’t keep up with Alfred Mora, they may not make the grade.

2007

http://www.ethics.state.tx.us/tedd/conlob2007c.htm

Pearson Education
1 Lake Street Upper Saddle River, NJ 07458

Bryan, Beth Ann (00055189)
300 West 6th Street Suite 2100 Austin, TX 78701
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client - Start: 01/19/2007 Term Date: 12/31/2007

Carter, Janis L. (00039065)
401 Congress Avenue Suite 2100 Austin, TX 78701
Type of Compensation: Prospective
Amount: $10,000 - $24,999.99
Client - Start: 01/10/2007 Term Date: 12/31/2007

Foster, Wendy M. (00056685)
401 Congress Ste 2100 Austin, TX 78701
Type of Compensation: Prospective
Amount: $10,000 - $24,999.99
Client - Start: 01/22/2007 Term Date: 12/31/2007

Kress, B. Alexander (00032037)
300 West 6th Street Suite 2100 Austin, TX 78701
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client - Start: 01/08/2007 Term Date: 12/31/2007

Valenzuela, Joe D. (00050742)
401 Congress Ste. 2100 Austin, TX
Type of Compensation: Prospective
Amount: $10,000 - $24,999.99
Client - Start: 01/10/2007 Term Date: 12/31/2007

2007
http://www.ethics.state.tx.us/tedd/lobcon2007c.htm
Kress, B. Alexander (00032037)
(512)499-6200
300 West 6th Street Suite 2100 Austin, TX 78701

Akin Gump Strauss Hauer & Feld LLP
300 West 6th Street Suite 2100 Austin, TX 78701
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/08/2007
Client Term Date: 12/31/2007

D.H. Texas Development L.P.
c/o Darryl Hammond 326 Calhoun Plaza Port Lavaca, TX 77979
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/08/2007
Client Term Date: 12/31/2007

Early Care and Education Consortium
805 15th Street NW Suite 700 Washington, DC 20005
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/08/2007
Client Term Date: 12/31/2007

Edvance Research Inc.
9901 IH-10 West Suite 700 San Antonio, TX 78257
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/08/2007
Client Term Date: 12/31/2007

Governor's Business Council
515 Congress Avenue Suite 1780 Austin, TX 78701
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/08/2007
Client Term Date: 02/05/2007

MGT of America Inc.
2123 Centre Point Boulevard Tallahassee, FL 32308
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/08/2007
Client Term Date: 12/31/2007

Mobile Satellite Ventures L.P.
10802 Parkridge Boulevard Reston, VA 20191-4334
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/08/2007
Client Term Date: 12/31/2007

Pearson Education
1 Lake Street Upper Saddle River, NJ 07458
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/08/2007
Client Term Date: 12/31/2007

Texans for Excellence in the Classroom
515 Congress Avenue Suite 1780 Austin, TX 78701
Type of Compensation: Prospective
Amount: $25,000 - $49.999.99
Client Start Date: 02/05/2007
Client Term Date: 12/31/2007
2006
http://204.65.203.6/tedd/lobcon2006c.htm

Kress, B. Alexander (00032037)
(512)499-6200
300 West 6th Street Suite 2100 Austin, TX 78701

Akin Gump Strauss Hauer & Feld LLP
300 West 6th Street Suite 2100 Austin, TX 78701
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/27/2006
Client Term Date: 12/31/2006

D.H. Texas Development L.P.
c/o Darryl Hammond 326 Calhoun Plaza Port Lavaca, TX 77979
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 08/10/2006
Client Term Date: 12/31/2006

Early Care and Education Consortium
805 15th Street NW Suite 700 Washington, DC 20005
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 12/11/2006
Client Term Date: 12/31/2006

Governor's Business Council
515 Congress Avenue Suite 1780 Austin, TX 78701
Type of Compensation: Prospective
Amount: $10,000 - $24,999.99
Client Start Date: 04/07/2006
Client Term Date: 12/31/2006

Kaplan Inc.
888 7th Avenue New York, NY 10106
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 01/27/2006
Client Term Date: 12/31/2006

Mobile Satellite Ventures L.P.
10802 Parkridge Boulevard Reston, VA 20191-4334
Type of Compensation: Prospective
Amount: Less Than $10,000.00
Client Start Date: 08/10/2006
Client Term Date: 12/31/2006

Pearson Education
1 Lake Street Upper Saddle River, NJ 07458
Type of Compensation: Prospective
Amount: $10,000 - $24,999.99
Client Start Date: 01/27/2006
Client Term Date: 12/31/2006