Education facilities industry

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Education Facilities Industry A center of economic activity with annual spend of approximately $300 billion in the United States. This is approximately the size of the Gross Domestic Product of Denmark and twice the annual revenue of General Electric.


The US Education Industry

Education in the United States was a $1.1 trillion industry in 2007. In 2013 it was estimated to be $1.2 trillion – or 8 percent of US Gross Domestic Product. This includes salaries and benefits of instructional and administrative staff. Because facilities component only supports the primary teaching and research enterprises of education industry it does not track as well as other marquee issues in the academy. After home-building and road-building, the largest construction expenditure in the US lies in schools, colleges and universities. According to the US Census Bureaunew construction spending in the education industry occurs at a rate of about $80 billion.

According to UNESCO United Nations Educational Scientific and Cultural Organization there are 5,758 individual institutions in the U.S. alone.

Background

The necessity of tracking annual spend in the education facilities industry was given impetus by a consortia of educational institutions led by the University of Michigan that became engaged in technical standards development processes in 1995. Despite hundreds of 501(c)(3) non-profit organizations supporting the $1.2 trillion annual spend, not one of them had an assertive advocacy enterprise that fully leveraged the $300 billion economic footprint of the US education facilities industry to create a market for improved product and service delivery for campus infrastructure.


Total Cost of Ownership

In recent years, the education facilities industry has undertaken a number of initiatives to bring its costs under control; the term of art -- "total of of ownership" -- emerging as a useful way to convey its engagement in a number of activities -- largely administrative -- to exert downward pressure on rising product, service and complexity cost. Its ability to control these costs is limited by the business models of the nearly fifty 501(c)(3) non-profit trade associations that claim to represent its interest. While these business models work well as "gathering places" where the atmospherics of experience exchange and vendor contact are possible, the model does not accommodate meaningful engagement with suppliers in the standards setting area. These 501(c)(3) organizations depend upon the revenue stream of opposing stakeholders in the technical standards development processes administered by the American National Standards Institute (ANSI).

Trustees are often elected in order to get the education industry in their state “acting like a business”. With gathering pace, college and university presidents are being measured – and placed -- according to their private industry experience. But unlike GE this new cadre of presidents that trustees are placing at the helm of our largest institutions lack an important resource. General Electric is one of about 400 members that fund a $20 million 501(c)(3) non-profit organization – The Association of Electrical Equipment and Medical Imaging Manufacturers (NEMA) – by providing a platform for the development of technical standards that support the financial goals of the $120 billion electrical equipment industry.

An industry less half the size of the US education facilities industry spends $20 million per year on lobbying – a fair amount of it spent on making markets for its funding members by driving demand for their products and services into public law – either directly through federal legislation or through the American national standards development processes which are then made available to state and local governments to support their safety and sustainability ambitions. There are at least one hundred non-profit 501(c)(3) organizations in the education space – most of them based in the Washington DC area – but none of them are tooled up for moving infrastructure markets at the scale necessary to track in balance sheets of their supporting member institutions.

The only enterprise that works at the scale necessary to track in the facility balance sheets of US colleges and universities is an enterprise that began at the University of Michigan in 1997. See: "Leading practice discovery"


References


Other Sources

IBIS Reports http://www.ibisworld.com/

US Department of Commerce Census Bureau http://www.census.gov/construction/c30/c30index.html

American School and University http://asumag.com/

College Planning & Management http://webcpm.com/Home.aspx

Chronicle of Higher Education https://chronicle.com/section/Home/5

Engineering-News Record McGraw-Hill Construction Research http://construction.com/dodge/

National Center for Education Statistics https://nces.ed.gov/

Condition of America's Public School Facilities http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2014022