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Jun 17, 2011

English Classes are the New Goldrush

In my first job, as an English teacher in the Greek port of Piraeus, I discovered the students had found the key to the world of work. Jobs were easier to find than in the troubled Greece of today, but they knew that getting a position as a flight attendant, hotel receptionist or banker would be impossible without speaking English.

 

The outfit I worked for had an advantage over language schools in surrounding streets. Their teachers were Greeks. We were English speakers, flown over from London. Our school was almost, the free-wheeling principal told prospective students, the British Council.

 

The British Council is still a force, with nearly 500,000 students worldwide. Today it launches a report showing why so many want to learn English. The Benefits of the English Language for Individuals and Societies: Quantitative Indicators from Cameroon, Nigeria, Rwanda, Bangladesh and Pakistan is based on interviews with companies in the five countries. It shows that English speakers earn 25 per cent more than colleagues who don’t speak the language. This is the average. In Rwanda, in some jobs the difference can be 181 per cent.

 

Rwanda is a striking example of the drive for English. Almost everyone in the central African country speaks Kinyarwanda and 68 per cent speak French. Yet in 2008 the government switched the entire education system from French to English. It argued that it was a logical choice, given the country’s business links with Dubai, Malaysia, China and Japan.

 

You will notice these are not traditional English-speaking countries such as the US, UK or Australia. The majority of conversations in English today are between non-native speakers. English is the world’s lingua franca. In a 2006 report, the British Council forecast that 2bn people could be learning the language by 2020.

 

This should present huge opportunities for businesses. No one is quite sure what the English education market is worth. The British Council estimates that worldwide annual spending on teachers comes to about £50bn ($82bn). Kent Holiday, chief executive of Eleutian Technology, a US-based teaching company, thinks the state and private English sectors spend $100bn on teaching in China, Japan and South Korea alone.

 

Teaching is only one part of it. There is also publishing, both print and digital, as well as setting and administering the tests required for university entrance and immigration into English-speaking countries.

 

The English language teaching and testing market is, however, hugely fragmented and understudied. Pearson, owner of the Financial Times, is probably the leader, but only about one-third of its international education revenues of £1.2bn are thought to come from English-language activities.

 

There are no companies that dominate the sector the way giants such as China Mobile, Vodafone or NTT DoCoMo bestride the mobile telephone services business.

 

The comparison is particularly apt for Mr Holiday, who spent 20 years in the telecommunications and technology industries, 10 of them in Korea, before founding Eleutian. Based in the tiny town of Ten Sleep, Wyoming, Eleutian uses US school teachers to provide English classes over the web to students in China, Korea and Japan. He says broadband has opened up new ways of delivering lessons remotely. Eleutian recently won praise from President Barack Obama for insourcing rather than outsourcing US jobs.

 

Other companies are building operations on the ground in emerging markets. Walt Disney has opened a chain of English schools for children in China, featuring Mickey Mouse, the Little Mermaid and other characters. New Oriental, the China-based, New York Stock Exchange-listed company, teaches English to three-year-olds as well as adults.

 

John Fallon, Pearson’s international education head, says the merging of mobile and laptop technologies opens new prospects for commuters on the move and could allow schools to run classes with students from several countries at the same time.

 

English should be a 21st century gold rush. Some have already made their fortunes. Krishnan Ganesh, an Indian entrepreneur, has sold a 76 per cent stake in TutorVista, his six-year-old education and English teaching company, to Pearson for $139m.

 

SOURCE: The Financial Times