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The Education Industry Association’s Annual Washington Meeting (II)

Yesterday I attended parts of the Education Industry Association’s annual Washington policy conference:

• The keynote address by Republican Congressman Buck McKeon, ranking member on the House Education and Labor Committee, and this year’s recipient of the trade group’s “Friend of the Education Industry Award.”
• A panel on the experience of special education providers with their various government clients - primarily school districts.
• A panel on the intersection of research, development, evaluation, and the sale of “innovative” products, programs and services.

My Observations:

Expanding EIA’s practical focus beyond SES providers. While it not only seemed that (Supplemental Education Services) SES providers dominated the meeting’s attendance, and many participants prefaced their remarks in ways that emphasized that perception, It’s fair to say that Executive Director Steve Pines made real efforts to expand the agenda. The special education session was substantively quite different from others in the meeting, but the problems had a similar ring (for example, school districts as both clients and competitors; the problem of “bad apples spoiling the whole bushel.”) – and the providers were clearly grateful for the opportunity to contribute to, and be recognized by, the association.

I would much prefer to see a consolidation of school improvement providers into one trade group, but coordinated action is the next best thing. The second session was the result of a cooperative relationship with Knowledge Alliance. I think it was a bit theoretical to most of the audience, but most of the audience stayed to listen. That’s a good sign.

NCLB Reauthorization. Rep. McKeon gave unambiguous warning of an oncoming business crisis for the school improvement industry, and especially SES providers. There will be no reauthorization until after the next election, nor will there be a new education budget. In the worst likely scenario, if the Democrats win the White House, and hold onto the House and the Senate, McKeon told the audience “you will be laying off people.” If the best plausible scenario, if Republicans win the White House NCLB will still look something like the current Miller draft.

McKeon offered two reasons for the industry to hope for something better than one of those two outcomes:

First, the fact that things happen in politics and maybe one of those things will happen between now and a reauthorization vote that will lead to a more favorable outcome. Reliance on luck is not a very good basis for business planning.

Second, moderate Democrats. McKeon was clear that he felt Chairman Miller was personally in favor of compromises that would leave the industry in a reasonable position, but that he was too far out on a limb with the party as a whole. McKeon also pointed out the success teachers unions had in electing Democrats to Congress in 2006 on anti-NCLB platforms.

In my view, this suggests the focus for industry lobbying activities between now and the 2009 reauthorization vote - the moderate Democrats in the House and Senate who voted for NCLB in 2001. Republicans are mostly on the industry’s side. Were I in charge of EIA lobbying, I would go to the NEA and AFT Congressional Report Cards, and identify those Democrats who voted with the union less than 75-80 percent. I would then identify all the industry interests in their districts and start lobbying them. At the national level, I would focus on the one agreement that I think will sway moderates as a block – results. I would also not hesitate to point out that the industry supports higher spending to support NCLB. With higher spending, the market impact of less favorable provisions on AYP, differentiated consequences, and specific SES provisions may be easier for the industry to survive.

Make no mistake about this - we are talking about the difference between a reauthorized NCLB in which the industry survives to fight another day on Capitol Hill, and a law that makes the industry unsustainable. No investor who heard McKeon will be putting new money into firms whose business is based on NCLB any time soon. The question is whether firms can hang in long enough fto profit from a turn around a few years out.

The intersection of research, development, evaluation, and sales.
Too much of this discussion had the tone of a graduate seminar – conceptual and theoretical, plus “inside baseball”: What is innovation; how much should government and the private sector spend on k-12 R&D; veiled references to internal politics about What Works Clearinghouse reviews and the role of ideology in evaluation under Reading First. I enjoy that kind of talk, but I was surprised that most attendees stuck it out. Maybe on this one the audience is ahead of the wonks.

The practical discussion revolved around setting a standard for what will be allowed into an NCLB market that is supposed to be confined to Scientifically Based Research, or for SES providers Research Based services. It’s clear that the industry needs a simple, clear standard that firms, investors and buyers can understand and rely upon. That standard needs to 1) encourage new firms with innovative products to enter a market dominated by the brands of major publishers – and investors in those firms; 2) assure some floor of efficacy for school districts purchasing these products, services and programs; and 3) not set the bar so high that almost no one can enter the NCLB-funded market. That central question for the industry was not one the panel addressed, nor am I sure it’s one the community of stakeholders has the capacity or will to grapple with effectively. One test of this on the industry side will be the attention it pays to the reauthorization of the Institute for Education Sciences Reform Act.

I’ve offered EIA a chance to post its own review of the conference, and encourage others to make comments.

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