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As Jim Johnson watches the pupils turn up at Union Independent School in Durham, North Carolina, he hopes that, one day, many schools will look like this. But he is not necessarily thinking about the red brick walls or the clean, bright classrooms. He is thinking about the business model – which, because it is replicable, could bring world-class education to economically distressed areas across the US.

Union Independent School, a new free school for about 70 children between kindergarten stage and second grade, is located in one of north-east central Durham’s poorest neighbourhoods – an area plagued by drugs and gang violence, and where 40 per cent of children are living in households whose income is lower than the federal poverty level.

In part, the school is the result of financing from a local church, Union Baptist Church, which put in $10,000 to build the 49,000 sq ft facility. However, the idea is to secure future funding from companies that will benefit from the findings of what will be a testing ground for new ideas and technologies in education and health.

This, Prof Johnson believes, will make the school’s model one that can be rolled out in other parts of the US by local authorities, churches and other organisations.

It is perhaps not surprising that Prof Johnson, a faculty member at University of North Carolina’s Kenan-Flagler Business School, is applying the techniques of entrepreneurship to the design of education.

The professor, who studies the causes and consequences of rising economic and social divisions in the US, spent his early school years in racially segregated schools, and so knows all too well the inequalities in the US education system – inequalities he believes persist. “Today, US public schools are probably more segregated and economically isolated than the year I was born,” he says.

Moreover, as a business school professor, he is well positioned to apply market-based techniques to education reform. Not only does he teach strategy and entrepreneurship to MBA students at the school, he is also director of the Urban Investment Strategies Centre at the Kenan Institute of Private Enterprise, the school’s economic development arm.

“Business schools are in the business of promoting innovation, creativity and new strategies for competitiveness,” he says. “And that’s what education needs – an injection of those kinds of ideas.”

The school has links to the MBA programme, too. Kenan-Flagler students can mentor children from the school, and recently a group of students held a training programme on financial literacy for children and their parents.

Union Independent School, which opened its doors in August this year, evolved from a programme developed in 1996 with the Reverend Ken Hammond, pastor at Union Baptist Church. Their Durham scholars programme – which is funded by the William R Kenan Jr Charitable Trust – has been offering local children after-school, weekend and summer sessions, as well as a six-week summer academy for 240 children from economically distressed neighbourhoods.

“What we learned was that after-school, weekend and summer programmes were necessary but not sufficient to catapult kids to where they can and should go,” says Prof Johnson. “Kids spent most of their time in other settings, where they were getting conflicting signals. We needed to narrow the ring so that kids were in a single setting with a consistent message and consistent set of expectations.”

That single setting is the school. But Prof Johnson has bigger ambitions. He intends this to be much more than a single school, but a model that will help, as he puts it, to “fix education”.

“If the US population is ageing, like all advanced industrial societies, the new majority are the kids that we’re concerned with here,” he says. “And if you leave them uneducated, we’ll have a major problem on our hands.”

The way he intends to do this is to make the school a laboratory in which to test new ideas that could transform education and society. Parents are invited to enter a lottery for places at the school (15 places go to the church, in recognition of its initial funding). Parents whose children do not get a spot are paid to let their children’s progress be studied.

“You have a built-in experimental design by definition,” explains Prof Johnson. “Unfortunately not every kid who applies can get it, so you have a programme group of those who get in and a control group out there who are not getting the treatments we’re talking about.”

Not only is the school able to explore pioneering new educational and social programmes – and test them against a control group – but also, given the data and intelligence this approach will produce, it has the potential to attract private sector funding.

And because the school is a registered non-profit, companies will get a tax deduction for their investments.

“We want to engage private sector players in mutually beneficial strategic alliances that lead to education reform,” says Prof Johnson.

A company might invest because, for example, it is interested in addressing obesity and understanding how to change the eating behaviours of inner-city children. Alternatively, technology companies might be interested in how the educational tools they are developing perform in a classroom setting, and the impact they have on pupils’ ability to learn. These can be tested out at the school. “So we’re doing all the work for them,” says Prof Johnson.

Corporate involvement in education has not been without controversy. Branded textbooks and educational material and schools named after companies have been labelled “schoolhouse commercialism”, and stand accused of being merely attempts to market to children.

However, Prof Johnson says that his model bears no resemblance to these programmes. “We don’t accept any company that comes to the table,” he says. “Our goal is to improve educational outcomes for poor children and transform public education.”

This, he says, is a form of enlightened self-interest for everybody involved – including companies that invest in the school. “Because if they don’t fix this problem, they’ll have no customers in the future.”


Improving maternity care in rural India

Fifty-two-year-old Radhika Vasanthakumar is certainly not your average MBA student, writes Della Bradshaw.

In spite of having a distinguished career as a gynaecologist, she chose to go back to the Indian School of Business in 2008, because she wanted to help women in rural parts of India with their maternity care.

“I always wanted to be an entrepreneur,” she says. She used her time on the course to develop a business plan with four other students – another doctor, an information technology specialist and two operations specialists, one with financial flair. The plan they developed was for a business that would give pregnant women in rural areas access to high-quality maternity care.

In a country where 80 per cent of the money spent on healthcare goes to the private sector – public sector healthcare is taken up by just the poorest patients – many women choose not to seek medical advice when they are pregnant, leading to potential complications.

Vasanthakumar’s plan is to set up a hub-and-spoke system of hospitals and clinics that will combine around 20 clinics in the countryside at a cost that the women can afford, with a city-centre hospital to which patients with difficulties can be referred as necessary. She believes it is a model that can easily be replicated in cities and rural areas across India.

The key is the city-centre hospital, she says, which is vital to ensure both that she can attract and retain good young doctors, who would not be prepared to work only in rural locations, and to support the local clinics.

She is not alone in her belief: the business plan won acclaim at business venture competitions in the US and at home in India. So much so that she received offers of financial support from venture capitalists.

However, the recession has meant that funding has been in tight supply and so far her proposed sponsors have been unable to fund the project. So since graduating from ISB in the middle of last year, she has been working as chief operating officer of Global Hospitals, a chain of privately financed hospitals in several cities in India.

But she is sticking to her dream, and has set herself a deadline of June 2010 to secure funding from the venture capitalist firms. After that, she will look elsewhere.

As the oldest MBA student ever to attend the ISB programme, she has proven that she is no quitter.


Resolving a taboo

One of the major issues in developing countries is to ensure that girls – and not just boys – get an education, says Linda Scott, professor of marketing at the Saïd Business School at the University of Oxford. “It’s a really key factor in international development.”

But for teenage girls, going to school is about more than just books and desks, writes Della Bradshaw. A shortage of sanitary products in rural areas has meant that girls often miss a week of schooling every month. Moreover, it is a topic that gets quietly swept under the carpet in most cultures. As Prof Scott puts it: “Menstruation is a taboo subject everywhere.”

Prof Scott hopes to change all that with a test project she has just completed in Ghana with the support of Procter & Gamble. In it, girls aged 12 and over in four villages – 183 girls in total – were supplied with sanitary pads over five to six months.

At the end of the six months, quantitative results showed the girls missed significantly less school than before the test. Indeed, in remote rural areas, the percentage of school days missed by the girls more than halved, dropping from 23.8 per cent to 10.1 per cent.

On an anecdotal level, almost all the teenagers involved in the survey (98.4 per cent) reported that they were better able to concentrate in school as a result of using the pads and all of them said they could help more at home. They were also happier carrying out other tasks, such as sport.

Prof Scott points out that the provision of sanitary products is only one factor in helping to sustain education for girls, and the overall situation is incredibly complex. The onset of puberty, for example, might put the girl under pressure to marry.

The task now for Prof Scott is to work out how to take the pilot scheme and replicate the model across Ghana and other regions – one of her key areas of research has been in analysing and evaluating rural distribution networks for consumer products in countries such as Bangladesh and South Africa. According to Prof Scott, only 7 per cent of women in Bangladesh use sanitary products, Although, she adds: “I’m now sure how anybody came up with those figures.”

Copyright The Financial Times Limited 2017. All rights reserved.
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