In 2018, 1.3 billion children, adolescents and young people - 4 out of 5 - were enrolled in school worldwide. The development of education has many benefits. On the one hand, it generates positive effects on the economy because education helps to reduce poverty, increase average incomes and stimulate economic growth. And on the other hand, education has social virtues by reducing child mortality, spreading peace, strengthening democracy, restricting early marriage, increasing life expectancy, promoting gender equality and reducing the number of sick people.
Education is a powerful lever for accelerating the development of States. Each additional year of schooling increases average annual GDP growth by 0.37%. Secondary education for all would more than halve the number of people living below the poverty line, from 840 million to 420 million. Educating people is also a positive factor for peace. Educated people are more likely to participate in the democratic process and exercise their civil rights. Each year of education reduces the risk of conflict by about 20%. More generally, better education has virtuous social and economic effects.
Governments have understood the beneficial effects of education. In 10 years, thanks to reforms such as free schooling in developing countries, the number of out-of-school children of primary school age has almost halved, from 102 million in 2000 to 58 million in 2012. In 2016, 38% of children were enrolled in pre-schools compared to 19% in 2002. In the SME partner countries alone*, 77 million more children were enrolled in school than in 2002.
Demand is mainly driven by the highly populated countries which have both high and rapidly changing enrolment rates. This is the case of China and India, which are currently the two most populous countries in the world. The United Nations predicts that by 2050, there will be 1.66 billion Indians and 1.41 billion Chinese on earth. Enrolment rates are over 99% in India and China for primary school, 73% in India and 88% in China for secondary school, and 28% in India and 51% in China for post-secondary school. The number of children in school is increasing, as is the average number of years of study. The proportion of students continuing their studies in China after secondary school is twice as high as it was 10 years ago.
Education is not only for young people. Whether they want to change professions, improve their skills in their work or obtain an additional diploma, a desire for lifelong learning is emerging with adult education.
The education market has strong potential, in developed and developing countries alike, for young people and adults alike. To give you investment ideas, you can browse this themed selection, which includes companies providing general education, support services, educational services and textbook publishing.
Sources: UNESCO, *Global Partnership for Education, UNICEF
Notes: Enrolment ratios (Gross Enrolment Ratio in %) in primary school in India are 2017 and 2018 and in China 2010 and 2018.