Moving Toward New Heights
Deloitte Education Industry Report 2017
"Moving Toward New Heights- 2017 Deloitte Education Industry Report" was compiled by Deloitte Education Industry and Deloitte Research team. This report mainly talks about the topic of China's education industry: Policy, capital, technology and social concept, as the key factors in driving steady growth of education market for a long time, will bring China's education industry toward six "new heights".
Viewpoints / key findings
- Height one: sub-sectors are showing "full blossom".
Different from the imbalanced development situation over the past few years, this year each segment of education industry will gain broader space for development. For preschool education, domestic early childhood education organizations spring up and more kindergarten brands are being established; leading private training organizations engaged in K12 education will invest in multiple sectors and enhance standardization; regarding vocational education, increasing academic education organizations are developing toward collectivization and school-enterprise cooperation encouraged by a series of policies under the 13th Five Year Plan, and organizations engaged in non-academic education have reformed traditional teaching methods by embracing new technologies; enterprises will make cross-sector investments into international schools more frequently, such asset-light mode may be widely adopted in the future. In addition, new Non-state Education Promotion Law of the People’s Republic of China (Non-state Education Promotion Law) will accelerate education asset securitization and promote the transformation of private education organizations to a higher level of development.
- Height two: capital market is gaining ground by hitting new records in the scale of M&A and asset securitization.
Capital market is gaining ground by hitting new records in the scale of M&A and asset securitization. Due to the pressing transformation needs of listed enterprises, the scale of M&A soared and peaked in 2016; the listing boom of education enterprises on the New Third Board has made the amount of securitized education assets reach a new high; moreover, educational technology sector has become a new investment hot spot.
- Height three: STEAM (Science, Technology, Engineering, Arts and Mathematics) education ushers in a golden age.
Backed by governmental policies and capitals, STEAM education expands rapidly in first-tier cities and out-of-school training organizations will become the major force of STEAM education with the influx of social capitals. As the support of government and social powers increases, first and second-tier cities will see vigorous growth of STEAM education and become the major markets of education organizations.
- Height four: "going global" trend is continuing to heat up.
Driven by policies under the OBOR Initiative, China's education industry is taking on the trend of "going global", especially vocational schools and higher education institutes. Specifically, as Chinese enterprises have technology advantages with higher cost performance, the export of digital education infrastructure will have the biggest impact.
- Height five: educational real estate expands rapidly and the collaboration between real estate and education further deepens.
Educational real estate is developing toward cross-sector cooperation. Based on the degree of correlation, such cooperation can be classified as three categories: sponsorship and affiliation, cooperative school running, and independent school running. As the integration of education and real estate deepens constantly, a new mode of education complex will come into being, under which, education will occupy a more important place in real estate.
- Height six: technology redefines education and education industry will experience unprecedented transformations.
Transformational new technologies such as artificial intelligence, digital technology, virtual reality technology, etc. will shape four trends for education industry: intelligentization, digitalization, three-dimension, and flatization, and create a new personalized and full-immersive education mode with the participation of parents, schools and teachers.