Many people have asked me about Pearson's response to the recent result of the UK's referendum on membership of the EU. Here is a note that I shared with Pearson's colleagues last Friday (06.24.16) immediately after the result.
I am writing to share some immediate thoughts in the light of the UK’s vote to leave the European Union.
These are clearly uncertain times for the UK and for Europe. Pearson’s view throughout the campaign was that the UK was better off within the EU. Of course we fully respect the democratic decision that has been taken and, for Pearson, we will now focus on forging a successful path in a new context.
Pearson is in a strong position. More than half of our revenues are from the US, in dollars. We have a solid balance sheet with low debt, and this will enable us to weather uncertainties.
Although we care deeply about the UK, we are the world’s learning company. We will continue to be advocates for a world that is more open and connected. It is vital that the UK’s world class universities should continue to attract the brightest young people from around the world to enrich our education community.
For now, the important thing for us all is to stay focused on our business and our customers. We will take our time and work through every implication for our business and our growth. We will also play our part in helping maintain the outward-looking United Kingdom and globally connected education community that are in the interests of us all.
As I travel the world talking to students and educators, the most urgent questions I hear are variations on the same themes: How do I create a better life for myself and my children? What is the social compact that gets us all there, and who is responsible for creating it? Those are questions fundamental to achieving the American dream—a dream that resonates worldwide.
These critical questions are also at the core of many Americans’ concerns that economic progress is out of reach and that the dream is fleeting now more than ever. These concerns have surfaced more urgently within the context of the Presidential campaign, and have been foundational to candidates’ views on both sides of the aisle.
To understand the dynamics that underlie these concerns, Pearson conducted a poll with Atlantic Media as part of their “Next America” series, seeking to examine Americans’ views on these issues. The results were revealing: More people than ever believe they don’t have a reasonable shot at creating opportunity in this country. Shockingly, and in contrast to the basic tenets core to the United States, fewer than half of all Americans—just 44%—believe that anyone who works hard has a fair chance to succeed.
When you start to break this down along demographic lines, faith in the promise of American opportunity becomes even more strained. Fewer than 40% of African Americans believe that someone who works hard has a fair chance to succeed. The research shows that Asian and Hispanic Americans are still hanging on to the American dream, but are only marginally more confident that they have a real shot at success.
While this data is discouraging, there is hope. The poll results evidenced a shared view in the promise of education and the belief that if people have access to education designed specifically to improve their skills, their views of the opportunity would improve. Almost three-quarters of Americans—72%—believe they would be able to get a better job or a higher paying job with more education or training.
Two-thirds of Americans believe the economy would improve by increasing the number of well-trained workers and people see investment in education as the best way to improve the economy.
It’s clear that people of all backgrounds see education as the gateway to a better life.
While educators, policymakers and employers are key in helping people prepare for the workforce, companies who are focused on education, like Pearson, have an important role to play. Building the tools to lead people to better jobs and a better life is fundamental to Pearson’s mission. We’re especially focused on closing the skills gap to give people more access to jobs and better opportunity. At schools like Texas Southmost College in the Rio Grande Valley, we are providing digital curriculum that prepares graduates for high tech and health care jobs in their local communities. Across the nation, we are working with colleges and universities to move degree programs online, often putting up the capital to get these programs off the ground. And, we are supporting adult learners with the GED and our professional testing services.
There are urgent educational and economic needs across this country. That is never more evident than when people feel opportunity is out of reach, and the American Dream is out of sight. Together we can meet these challenges and make sure that everyone has the opportunity to create a better life for themselves.
Here are some other highlights from the full poll results, which you can read in full here.
Now that the referendum on Britain's membership of the European Union has been set for June 2016, lots of organisations and people are asking what Pearson thinks about the issue.
First and foremost, we think this is a decision for the British people to make, and no doubt there will be a range of opinions within Pearson, as there are across the country. Each of us in the UK has a vote, and will use it as we see fit.
We have though been asked by some organisations on both sides of the debate what Pearson's position is and we think it's right to take a view.
Only a small proportion of Pearson's business relies directly on trade between the UK and the rest of the EU. Nonetheless, we have carried out analysis of how Britain leaving the EU would affect Pearson across a number of regulatory and financial aspects. This analysis has concluded that Pearson would be better served by the UK remaining part of the EU.
As part of Britain and Europe's education community, we see the considerable value that British membership of the EU brings to universities, colleges, schools, teachers, students and pupils.
As a global business based in the UK, we believe that Britain, its businesses and its people are, on the whole, better off as part of Europe.
One of the less visible victims of the Syrian conflict has been education. The war has left almost three million Syrian children out of school - those that have stayed and the refugees who have fled. As the crisis continues to worsen, we need to focus on how to educate these children before they become a "lost generation". I attended a discussion this morning in London as part of the Supporting Syria event led by the governments of the UK, Germany, Kuwait, Norway, and the United Nations. Education was, rightly, high on the agenda.
It is not enough to sit around and say that something must be done. It is not enough to leave it to governments, to hope the private sector will invest, or to rely on NGOs to bring assistance and order. It is not even enough for those of us with the power and responsibility to ‘act’. We have to act together to make the biggest impact we can.
For Pearson, that means sharing our expertise in delivering educational products and services at scale. We have the know-how - every year our products help many millions of teachers and students, of all ages, all over the world. But we have little experience of operating in conflict zones or refugee camps or dealing with the trauma of those who have been affected by war.
That’s why we launched “Every Child Learning” nearly a year ago - a three year partnership with Save the Children that’s increasing educational opportunities for Syrian refugees and their host communities. The partnership has already provided two education centres in Amman, Jordan which are educating 1,400 Syrian five to 13 year olds. We’ve also committed £1m to research, to understand the sort of learning experiences that are needed and will work on the ground.
If our partnership can have a positive impact for Syrian child refugees, we'll move on and see how we can help teach children affected by wars and emergencies in other parts of the world too.
Education in emergencies and conflicts remains the most underfunded of all humanitarian areas. According to UNESCO only 2% of global humanitarian aid was allocated to education in 2014. Yet improving the provision of quality education in these settings will often be the catalyst to peace and stability. The challenge may be great, but the prize is much greater.
All of us involved in education have a responsibility to ensure that there's no lost generation in Syria, or anywhere else in the world. At Pearson we’ll continue to work with others on all sorts of challenges - our allies in the Global Business Coalition for Education, our partners in Project Literacy, our business colleagues at the Pearson Affordable Learning Fund - anyone who believes like us that the best way to help people make progress in their lives is through access to quality education. It’s a responsibility that eclipses sectors or politics or ideologies. It is, very simply, a battle for the basic human right to learn.
In Kenya, many children who attend Bridge International Academies are getting results in the top 5% nationally. In India, what began as a single classroom helping children in slums to learn English has grown into 800 schools serving 200,000 students who outperform ‘traditional’ classrooms by between 20-60%. And over 3,000 children in the Philippines are benefitting from being at schools where teachers received a 100% pass rate on their licensure tests.
These are just some of the extraordinary outcomes being achieved by a new generation of education entrepreneurs around the world – entrepreneurs that Pearson has been helping to guide.
In recent years the debate around how to fix global education has shifted. It is no longer enough just to talk about getting every child into school (though alas not because that has been solved.) Just as important is what happens when they’re there. When the world pats itself on the back that 43 million more children now go to school than five years ago, someone needs to keep asking, “what next?”. In other words, is the increase in access leading to improvements in progress?
Through the Pearson Affordable Learning Fund (PALF) we are helping local entrepreneurs across Asia, Africa and Latin America to go further and faster in improving education in their local communities. From Ghana to India, our team has found brave innovators, exploring how new teaching and learning approaches can serve their communities. As my colleague Katelyn Donnelly, who heads up PALF, says: “It was clear everywhere we went—from Pakistan to Ghana to the Philippines—parents, students, and heads of state saw education and skill development as a critical gateway to a more prosperous life and a stronger economy. What was lacking was organization, knowledge and capital.”
Where governments are sometimes unable to take on risks, entrepreneurs and startups can focus on the most difficult challenges in education—job readiness, early childhood education or teacher training—and make a big difference in a short space of time, from which the public sector can eventually benefit.
Launched in May 2012 with an investment in Omega Schools in Ghana, PALF has now invested $15m in 10 education companies in five countries. With our partners we have helped educate 350,000 people, many of whom would not have had an education, let alone a good one. And importantly, they are all solutions that are based on sound business plans, so are sustainable, scalable and replicable.
By getting behind local entrepreneurs, with our money and our know-how, we’re also helping to stimulate thriving communities - not just business people, but teachers and parents and anyone who relishes the opportunity to take on the trickiest problems in education.
The late Professor C.K. Prahalad, a Pearson author and board member, said: “The big challenge for humanity is to get everybody, not just the elite, to participate in globalisation and avail its benefits.” The work of PALF is heavily influenced by that belief in inclusion, and in allowing everyone, not just those at the top of the pyramid, to have a chance.
My colleagues in PALF have just published their first report into the impact of the investments they have made. It is well worth a read.
Tomorrow will be the first time since 1957 that the Financial Times will not be published as part of Pearson.
As we complete the sale of the FT to new proprietors, Nikkei, it’s a good day to take stock of what Pearson and the FT have achieved together in those 58 years.
As Andrew Edgecliffe-Johnson pointed out in his eloquent analysis of the sale, when Pearson first bought the Pink ‘Un, the deal was described as “a sound, conservative investment”.
It went on to be so much more than that. The City of London’s house paper has become the indispensable guide to global finance, economics, politics and the business of technology for people with an interest in any of those fields. FT.com has continually redefined digital journalism – and has proven that people will pay for high quality content.
The FT’s principled approach to reporting “without fear or favour”, the breadth and depth of its coverage, and its unstinting high standards are all qualities to we have admired and sought to uphold throughout our ownership.
The FT’s commitment to finding and breeding the next generation of journalistic talent is also one from which many businesses could learn. Some of the most respected names in global journalism and public life are FT alumni – including current leaders at the BBC and Dow Jones. (It’s not every newspaper whose journalists go on to become government ministers, from Westminster to Ottawa, either).
So, why did we sell?
There is no doubt we’ve reached an inflection point in global media, involving new models for paid content and changing relationships between journalists, publications and their readers. The world of education, where Pearson is now putting 100% of our focus, is changing rapidly, too. I wrote about these phenomena after our sale was announced.
And in the face of these changes, Pearson could not divide attention between two such crucial efforts. Education was already 90% of our business, and the FT deserved to be at the heart of a business totally focused on the future of global media.
The FT will continue to define my morning agenda, whether that means reading Ed Luce and Janan Ganesh on US and UK politics, Andrew Hill on management, Martin Wolf on global economics, John Gapper and Gillian Tett on the intersection of business, politics and technology, or the many other journalists, editors and columnists whose expertise and way with words make the FT what it is.
We wish colleagues, at the FT and Nikkei, very well as they define the future together.
They will continue to make what Lionel Barber describes as “news for the new world”, and we will continue to cheer them on.
Meanwhile Pearson is now totally focused on our biggest opportunity – making global education more accessible and more effective, and meeting the needs of millions of students all over the world who seek a better life. It’s a long term opportunity, and a complex one too – but it’s an inspiring goal, and one which we are better equipped to fulfil than anyone else.
After years of enjoying a free subscription to the FT, I spent the weekend sorting out my own paid subscription. So, having sold the FT, I can now say with pride, that I buy it every day.
Prime Minister Modi’s visit to my home city of London last week is a reminder that in the race to build a world of better education, few places compare with India for the scale of the challenge and the ambition.
The Indian Prime Minister has rightly highlighted the problem of India’s “acute skills shortage”, and how this is hampering the pace of economic growth and undermining international competitiveness.
There are a number of reasons for this. Traditional rote-learning, for centuries the teaching style of choice, where students regurgitate knowledge, is increasingly out of sync with workplaces that value emotional intelligence and interpersonal skills. Team-building, conflict resolution, empathy, leadership, resilience – this is the stuff of the successful 21st century worker; but it is not the stuff that schools are sufficiently good at teaching.
The Pearson India team recently published our annual Voice Of The Teacher survey. They found that 57% of Indian teachers consider their students insufficiently prepared for employment on completing school. Three quarters of teachers want greater industry input into course content – a theme I also heard loud and clear when the Pearson board visited India last month. The full report has some fascinating insights on the state of play in Indian education.
Yet the infrastructure is there to make big improvements. Technology lets us learn what we want, when we want, at the pace we want. It can give us instant feedback and tell us where an individual – I – am going wrong and what I need to do to progress. And most importantly of all, it can do this for billions more people than the traditional classroom can. Not just access to learning - but also progress.
This skills challenge is not one of those great, intractable global issues. Solutions shouldn’t be hard to come by. It will require closer collaboration between educators, and employers. Nobody knows better than employers what sort of skills are needed for the workforce, and nobody knows better than teachers how to impart these skills onto young people. Governments need to put in place structures and incentives which encourage this collaboration.
Then there's the education providers like Pearson. We also have a vital role to play, through businesses we own like IndiaCan, which runs over 100 career coaching centres across India. My colleague Leah Jewell’s blog explains how we’ve helped 10,000 young people achieve their first taste of employment; people often left behind and let down by education when they were younger. Better employment outcomes are perhaps the ultimate measures of educational efficacy.
Free market forces and government policies may determine unemployment levels, but with the right education, nobody ever need be unemployable. I hope India continues to think outside the box when it comes to skilling up its population.
Get it right, and we all win: the school leaver gets the job, businesses get their talent, and a nation continues to lift itself up.
This article was originally published on LinkedIn.
Later this month, when world leaders meet at the United Nations in New York, they will announce their commitment to the new Global Goals for sustainable development, setting out their ambition for a more peaceful and prosperous world.
All 17 goals are important, but the fourth – “to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all” – makes many of the others that much more achievable, too. For education can slow and even reverse the vicious cycle of poverty, and give people the chance to improve their prospects, their communities and their lives. Education is a pathway to improved health, nutrition and wellbeing, particularly for women and children (goals 2, 3 and 4). A child born to a mother who can read is 50% more likely to survive past the age of 5. Education helps create ‘global citizens’ with the knowledge to promote responsible consumption and production patterns (goal 12) and aids the development of peaceful societies (goal 16). Education has an effect on nearly every aspect of the societies in which we work.
Just one vivid example of this: through the Sudiksha program in Hyderabad, India, which we invest in via our Pearson Affordable Learning Fund, local women are empowered to open and run neighbourhood branches of a low-cost preschool network under a profit-sharing model. Sudiksha trains and educates the women as teachers, and they are then able to teach students who otherwise would not be able to attend school. As the programme progresses, the risk of extreme poverty decreases for both the women and their students.
By putting efficacy at the heart of everything we do in education, Pearson has been contributing to a wider movement to focus much more on outcomes over inputs. So it’s encouraging that the new goals also focus on outcomes, such as expanding access to education, ensuring the success of students (measured by completion rates) and enabling them to progress in their lives (tracked by placement into jobs or further education). This is particularly important in a world of constrained resources, where everyone involved in education is trying to do more with less.
These goals, of course, are a vital means by which we fulfil Pearson’s own purpose – to empower people to progress in their lives through learning – which is reflected in the reach and impact of our people, products and services. But beyond our purpose, it is our responsibility as a learning company to support the Global Goals' focus on improved quality of life for the world’s poorest citizens, and to do so by using our expertise in teaching and learning.
Clearly, we can’t do this alone, and we know that the Global Goals themselves call for a robust network of partnerships to carry out this work (goal 17). So we will continue working with our partners Save the Children, Kiva and Camfed, and will step up the work we have started with a number of global education partners through Project Literacy. We will offer support in new ways as well.
Plans to give widespread international attention to the Global Goals this month include an initiative called the World’s Largest Lesson. Pearson will be playing an active role in promoting that lesson. You can help by learning all you can about the Global Goals at the link above, reading about the World’s Largest Lesson and sharing it on social media using #telleveryone and #globalgoals.
Everyone, no matter where they were born and under what circumstances, deserves an equal shot at a healthy, safe and fulfilling life. With these ambitious new goals, the world is setting out to achieve just that – and to do so in our lifetime. I look forward to all of us at Pearson being able to say that we played our part in making that happen.
No two classrooms are alike, but all students deserve access to a reliable learning infrastructure. Pearson CEO John Fallon speaks with students, teachers and local citizens on a panel discussion at Texas Southmost College about education in the Rio Grande Valley of Texas.
We have reached an inflection point in global media. The pace of disruptive change in new technology — in particular, the explosive growth of mobile and social media — poses a direct challenge to how leading media organisations produce and sell their journalism. They have a great opportunity — to reach more readers than ever before — but must also reimagine their business models.
Great brands will seize the moment and embrace the digital opportunity. But to do this effectively, organisations will need significant investment, a global brand and an unerring focus. Given the opportunities and challenges that lie ahead, the best way to ensure continuing success is to be part of a global, digital news organisation that is 100 per cent focused on making and selling journalism.
So, after much reflection and analysis over many months, we’ve decided the time is right for a new owner to take the FT forward. Nikkei shares our commitment to the FT’s editorial independence; it has proved that in its own journalism, equally published without fear or favour.
Pearson and the FT will continue to work together in areas like global business education and teaching English in countries such as China. Pearson is already the world’s largest provider of English language learning, reaching more than 33m students worldwide. But we’re still only meeting a fraction of the global demand — over a billion people will be learning English as a foreign language by 2020.
The world of education is now changing profoundly, through globalisation, the emerging middle class in countries including India, China and Brazil, and the revolution of digital technology. The number of students going to university around the world is expected to triple over the next 20 years.
And that is what the future of Pearson is about: the ever-growing global demand for better education — whether that means learning real skills that lead to a career, access to better teachers and learning resources, or more affordable and effective higher education. It is a big and fragmented sector — annual global spending on education is estimated at about £3tn. As a business that currently makes around £5bn in annual sales, that is a lot of space for Pearson to grow.
We are accelerating our investment in digital learning and fast-growing economies — in the past five years we have invested in some of the most dynamic education businesses in the US, China, Brazil and South Africa. We are designing innovative digital technologies and new business models to help reduce barriers to learning and contribute to solving the world’s most pressing education challenges.
Fifty-eight years ago when Pearson bought the FT, the spread of authoritative reliable news helped democracies to form and markets to function. While that need remains crucial today, I believe it is now the promise of education, not just information, that can be the world’s greatest path to equality of opportunity. Parents the world over say that the single most important goal for their children is to gain the skills that will help them forge successful careers and lives. This is the promise of education — and the future of Pearson.
The writer is chief executive of Pearson, the proprietor of the Financial Times and the world’s largest education company