No Test Left Behind
How Pearson Made a Killing on the US Testing Craze
Three days after taking office, George W. Bush unveiled his signature domestic policy, No Child Left Behind. The bill would triple the number of exams the federal government required of students, while dangling stiff penalties over struggling schools. For many educators it felt like a depth charge.
The mood was different at Pearson Education, a division of the London-based conglomerate Pearson PLC. As the education community was still absorbing the shock in February 2001, Pearson Education chief executive Peter Jovanovich spoke to a group of Wall Street investment analysts. He pointed them to the proposed annual testing requirements and school report cards. “This,” Jovanovich said, “almost reads like our business plan.”
Pearson Education was a relative newcomer to the education market. Three years earlier, Pearson PLC had paid $4.6 billion to buy the textbook wing of publishing house Simon & Schuster. In 2000, the company acquired a leading standardized test provider. Now Pearson’s stars had aligned.
“Content has been king,” Marjorie Scardino, Pearson’s top executive, said at the time. “But now we'll have the ability to put content and applications together and that will really allow us to be king.” With a hand in both delivering curriculum and testing students over that curriculum, Pearson would capitalize on America’s newfound school accountability kick.
Pearson Education’s profits increased 175 percent in the decade following No Child Left Behind. The company, whose properties included Penguin Books and the Financial Times, soon derived most of its profits from American education. Test sales jumped fivefold between 2000 and 2006. “Our assessment businesses are in the sweet spot of education policy,” Scardino told investors in 2005 – a year when more than 60 percent of American school kids lived in states giving Pearson tests.
Since 2000, the testing market has roughly tripled in size, to nearly $4 billion a year, with annual achievement tests spawning a range of more frequent tracking assessments. As testing has flourished, more and more functions of the school publishing industry the have fallen into fewer and fewer hands. In 1988, ten publishers shared 70 percent of the textbook market. Today, the “Big Three” —McGraw-Hill, Houghton Mifflin Harcourt and the juggernaut Pearson—control at least 85 percent of the market. These lucky few have since expanded their offerings; Pearson hawks everything from student data trackers to online credit-recovery courses to ADHD diagnostic kits.No Test Left Behind: How Pearson Made a Killing on the US Testing Craze: