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Description explain carrots, sticks, and sermons how policy shapes educational entrepreneurship.
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Carrots, Sticks, and Sermons:
How Policy Shapes Educational Entrepreneurship
By Ashley Jochim
Center on Reinventing Public Education, University of Washington
RESEARCH PAPER: JUNE 24, 2015
Papers for this conference are available online at www.aei.org/feature/education-
entrepreneurship-papers/
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Public policy profoundly shapes the prospects for entrepreneurship in education. Not only
does government inject billions of dollars into both public and private providers of
educational services, but federal, state, and local entities regulate who can deliver
services and how services can and cannot be provided.
Compared to recent history, the policy landscape has made education more open
to entrepreneurs than ever before. Policy changes at the federal, state, and local level
have expanded parents’ options and service providers’ freedom of action. At the same
time, the evolution of test-based accountability and common standards has put new
pressures on entrepreneurs working within and outside of the traditional public school
system.
This essay begins by considering how different kinds of policy tools – “carrots,
sticks, and sermons” – shape entrepreneurship. It then considers how changes to the post-
No Child Left Behind policy landscape, including Common Core, charter schools, teacher
evaluation, and test-based accountability, have influenced the opportunities and obstacles
entrepreneurs face, including their access to resources, demand for their services, and
oversight of their work. It concludes with recommendations about how public policy can
more effectively encourage entrepreneurship in education.
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HOW POLICY SHAPES ENTREPRENEURSHIP
“Public policy almost always attempts to get people to do things that they
might not otherwise do; or it enables people to do things that they might not have
done otherwise.”
–Anne Schneider and Helen Ingram, 1990
1
Public policy is the result of government actions (and inactions) intended to shape the
behavior of public and private actors.
2
Public policy can take many forms, including
laws, regulations, court decisions, and programs.
Entrepreneurship is any activity related to the development of new organizations,
methods, or products that challenge or improve upon existing ways of doing business.
3
Entrepreneurship can be undertaken in both the public and private sector. As described by
Patrick McGuinn,
4
public entrepreneurship includes efforts by teachers and
administrators employed by public agencies to experiment with new ideas and methods
while private entrepreneurship involves similar efforts by individuals and organizations
working in the for-profit and nonprofit sectors.
Public policy shapes entrepreneurship in three ways: (1) prescribing action
through regulation; (2) incentivizing action through grants or subsidies; and (3)
encouraging action by providing information. Colloquially, these different approaches to
shaping individual and organizational behavior are known as “carrots, sticks, and
sermons.”
Perhaps the most traditional means of shaping entrepreneurship is through
regulation. Regulation impacts entrepreneurs by requiring certain processes to be
followed. In the public sector, regulations limit the kinds of individuals who can become
teachers, how students may be assigned to schools, the number of students allowed to be
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served by a single teacher, the types of curriculum that can be used, and the length of the
school day and year. These rules about how schools are organized and staffed can open or
foreclose opportunities for entrepreneurs looking to employ new methods of instruction
(e.g., competency-based learning), make use of untapped labor pools (e.g., local artists or
museum staff to provide enrichment), or make tradeoffs between people and technology
(e.g., by using resources dedicated to hiring a teacher to instead purchase software and
instructional aides). While regulation typically imposes costs on entrepreneurs, it can also
open opportunities. Common instructional standards, for example, can lower barriers to
entry to entrepreneurs and expand potential markets for goods and services.
Regulation also dictates how and what kinds of services districts and state
education agencies demand from the private sector, thereby shaping the prospects for
entrepreneurship by nonprofit and for-profit organizations. For example, a byzantine
procurement process within a district central office can make it impossible for smaller
firms to offer products and services to districts; rules meant to prevent collusion between
educators, district staff, and for-profit firms often mean that entrepreneurs cannot have
access to the consumers that would enable them to tailor their products to better meet the
needs of educators and schools.
5
Government can also affect entrepreneurship by incentivizing desired behaviors.
Providing grants, subsidies, and other resources encourages public and private entities to
engage in preferred activities. For example, the Obama administration’s Race to the Top
(RTTT) program offered states the possibility of securing millions in grant dollars in
return for passing favored policies around teacher evaluation and Common Core
standards.
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Just like regulation, incentives can open and foreclose opportunities for
entrepreneurs. In the case of Race to the Top, the grant program was a boon to those
entrepreneurs providing Common Core aligned professional development and
curriculum, enabling them to vastly expand their market base as states rushed to adopt the
standards. It was less promising to providers of alternative materials and supports.
Public policy can also work by persuading individuals to act. Unlike regulation or
incentives, persuasion is not coercive and its effectiveness relies entirely on the voluntary
actions of target groups. It includes marketing campaigns (e.g., the “Just Say No”
campaign against drug use), reports that provide recommended actions (e.g., A Nation at
Risk), or policies that seek to improve information available to individuals or
organizations (e.g., quality ratings). Among the most significant uses of information as a
policy instrument in education is the effort by government agencies to create report cards
that provide information to families on school performance. Report cards do not directly
require or incentivize actions but they do influence school and parent behavior.
Of course, public policy can also have unintended effects on entrepreneurs. Test-
based accountability policies aimed to drive improvements in the quality of education but
had unintended impacts, including a narrowing of curriculum and reduced attention to
children well above or below the proficiency threshold set by states.
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The Policy Landscape and Its Implications for Entrepreneurship in K-12
The last decade has brought a number of changes to the policy landscape that greatly
reshaped the prospects for educational entrepreneurship in the United States. This section
considers how four prominent reforms – Common Core, charter schools, teacher
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evaluation, and post-NCLB accountability – have shaped opportunities for entrepreneurs
operating both within the public system and outside of it.
Common Core
In 2009, the National Governors Association and the Council of Chief State School
Officers launched an effort to develop common standards in English and mathematics to
ensure that "all students, regardless of where they live, are graduating high-school
prepared for college, career, and life" (Common Core State Standards Initiative, 2015).
By 2011, one year after the standards had officially been released, 45 states plus the
District of Columbia had signed on.
Common Core, like all education standards, is a regulatory reform that aims to shape
what teachers teach and students learn. Unlike previous iterations of standards-based
reform, Common Core provides a content framework that is shared across a diverse
group of states. Because Common Core aligns content across millions of schools, it has
the potential to fundamentally disrupt the market for instructional materials by lowering
barriers to entry for instructional content providers, who will no longer have to tailor their
products to 50 states’ standards.
7
Yet, for the same reason, it could circumscribe
opportunities to innovate in curriculum and school design, as a “one-size-fits-all”
approach comes to dominate K-12 education.
The “big three” publishers – Pearson, McGraw-Hill, and Houghton-Mifflin—have
long dominated the marketplace for instructional content (textbooks, but also
supplementary materials like lesson plans, workbooks, and supporting software) and
control 85 percent of the $3.2 billion K-12 market.
8
Entering the industry was nearly
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impossible for a small-scale entrepreneur given 50 states with 50 different requirements
for instructional content in math, English language arts, and history.
Common Core has the potential to greatly improve the profitability of new
instructional content, since providers will be able to market content to multiple states. At
the same time, publishers are transitioning towards digitally based instructional content,
which may create an opportunity for new entrants to gain a foothold in the marketplace
by producing products that are cheaper without the investments required in a traditional
publishing environment.
Early results suggest that new entrants are gaining a foothold in the market. In New
York, an invitation by the State Education Department for new Common Core aligned
curriculum required all bids to put their materials online for free. According to journalist
Sarah Garland, the big three publishers “balked,” enabling four nonprofits to secure the
$8 million bid.
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Early reviews of the materials, branded EngageNY, have been positive
and their reach has extended well beyond the borders of the state, with about half of all
downloads coming from outside of New York.
10
A report from the Center on Education Policy in 2014 suggests that fewer than four in
10 districts reported using curriculum materials produced by for-profits and about half
reported relying on for-profits for professional development.
11
Non-profits, arguably
smaller and less established in the provision of instructional content, were providing
curriculum content for 14 percent of districts and professional development for 35
percent of districts.
12
Importantly, having common standards has enabled niche nonprofits to find new
audiences for their particular brand of education reform. As discussed by Garland,
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Expeditionary Learning, an organization that advocates for project-based curriculum,
won contracts from Teach For America, KIPP charter schools, and the state of Delaware
to train teachers in the new standards.
13
Another nonprofit, Core Knowledge, which
advocates a back to basics approach to reading comprehension, was one of the four
groups to secure contracts from New York State to develop curriculum in English
language arts.
14
In addition to private investment and new entrants into the market for digital
instructional content, Common Core has also enabled the expansion of repositories for
digital instructional materials like Share My Lesson. Since 2012 when Share My Lesson
was launched by the American Federation of Teachers and TES Connect, the site has
generated over 300,000 free teaching resources. While these repositories could exist
without Common Core, their potential impact is much more significant in a world in
which a teacher in Utah can share instructional materials with a teacher in Maryland.
In contrast to the implications for content developers, changes to the testing landscape
have thus far largely favored the largest testing companies: Pearson, McGraw-Hill, and
the Educational Testing Service. While in previous years smaller companies may have
been able to compete by specializing in a given state, the reach of the new assessments
have significantly expanded the scope of the work, thereby privileging the testing
industry’s largest players.
15
Of course, changes in the membership composition of the two main consortia
developing Common Core-aligned assessments could greatly affect the marketplace. In
early 2015, 18 states remained committed to the Smarter Balanced Assessment
Consortium (SBAC).
16
Just ten states plus D.C. remained in the Partnership for
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Assessment of Readiness for College and Careers.
17
Twenty-one other states were relying
on other tests developed by other vendors.
How the new tests affect teaching and learning is a key concern. Some critics worry
that the Common Core will lead to a narrowing of curriculum and limit opportunities for
innovation in schools. As Robin Lake and Tricia Maas observe, charter leaders have
expressed concern that the standards “could end up taking away…teachers’ freedom to
use diverse options to meet student needs by forcing schools to teach certain standards in
certain grades, at certain times of the year, or eventually, by prescribing a curriculum.”
As Frederick Hess and Michael McShane discuss, given the standards increased attention
to scope and sequencing of content, Common Core may prove problematic for newer
school models, like Carpe Diem or Summit Academies, which utilize competency-based
learning models that enable students to progress at their own pace.
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While it remains to be seen whether implementing the standards will result in a “one-
size-fits-all” approach to student learning, as critics fear, it is well recognized that
standards-based reforms can and often do foreclose certain kinds of entrepreneurialism
and make individuals who work in schools more averse to investing in activities that do
not payoff in terms of improved student achievement in covered subjects. Much has been
written about how high stakes tests can crowd out learning in areas that are not directly
tested (e.g., civics, history, science)
19
and that test preparation activities do not generalize
to the broader areas of learning tests are intended to measure.
20
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Teacher Evaluation
Efforts to improve the quality of the teaching workforce are as old as public
education and have varied in their focus from managing what kinds of educational
experiences teachers must have before they enter the workforce, shaping the professional
development of teachers already in the workforce, and most recently, refashioning how
teachers are evaluated on the job to inform decisions about recruitment, retention, and
development.
The Obama administration’s RTTT competitive grant program and Elementary
and Secondary Education Act (ESEA) Flexibility waivers, favored states who put in
place evaluation systems that used multiple measures, including student achievement.
The results of these pressures have been extensive changes to the teacher evaluation
landscape. The National Council on Teacher Quality (NCTQ) reported that between 2009
and 2013, 26 states changed their policy on teacher evaluation. By 2013, 41 states plus
the District of Columbia required student achievement to be a “significant factor” in
teacher evaluations, 26 states differentiated levels of performance, and 39 states used
classroom observations.
21
Reforms to teacher evaluation shape the entrepreneurial landscape in three ways:
(1) generating demands for new evaluation tools and rubrics; (2) opening up
opportunities for entrepreneurs providing professional development services and
supports; and (3) changing the market for teacher preparation programs.
Teacher evaluation reform has resulted in states and districts in search of
evaluation models, tools, and rubrics, and billions of dollars invested in designing and
implementing teacher evaluation systems. While much of the controversy over teacher
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evaluation has focused on the use of student achievement data, a key feature of reform
efforts was the inclusion of multiple measures of effectiveness, including classroom
observations and student feedback.
These investments created an opportunity for entrepreneurs to offer new tailored
evaluation tools well suited to the needs of the schools and districts that used them but
evidence suggests the reforms to date have favored a few providers. According to the
Center for Great Leaders and Teachers, twenty-three states either recommend or require
the use of Charlotte Danielson’s Framework for Teaching while another nine use
Marzono’s Teacher Evaluation Model.
22
In the vast majority of other states, locally-
developed models dominate (e.g., the Minnesota Performance Standards for Teacher
Practice), suggesting either a lack of appetite or demand for more specialty evaluation
products.
The lack of innovation in evaluation tools and rubrics is problematic given
important differences in what effective teaching looks like in different contexts. As
discussed by Hess and McShane, the current landscape of teacher evaluation may
underappreciate the kinds of skills that are important for classroom management and
lesson planning in online schools or schools that rely on a blend of technology and people
to guide instruction.
23
For example, the teacher evaluation tools in place at Summit
Public Schools, a charter management organization with 9 schools, rely less on high
touch observation and more on data generated from common assessments, which are
tailored to tap the skills and content knowledge school leaders have identified as key to
student success.
24
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There are three factors that may have dampened opportunities for innovation in
teacher evaluation tools and rubrics. One is that teacher evaluation reform has largely
been undertaken from the statehouse, resulting in systems that are prescribed and apply to
all districts. According to the National Council on Teacher Quality, 12 states have a
single statewide system and another 10 have “presumptive models,” which prescribe a
method but allow districts to opt out.
25
Even states that allow districts to select from an
pre-approved list may inadvertently curtail innovative approaches to evaluation or
evaluation models tailored to particular kinds of schools (e.g., blended learning models).
Another factor is because teacher evaluation reform spread rapidly, it favored
organizations already working in this area and those who could ramp up rapidly to
provide tools and rubrics to states and districts. Charlotte Danielson’s Framework for
Teaching, which is among the most widely used models for judging teacher effectiveness,
was developed in 2007. A final factor is the byzantine procurement systems that are in
place in many state education agencies and school districts. As discussed by Tricia Maas
and Robin Lake, complicated procurement systems often favor large firms with
established working relationships with education bureaucracies.
26
A second way in which teacher evaluation could shape the landscape for
entrepreneurs is by generating demand for professional implementation support. Reforms
to teacher evaluation required investments in the design of statistical models, training for
principals and other evaluators, and support for district and state education agency staff
who are charged with overseeing implementation.
The Obama Administration’s RTTT program as well as new state appropriations
to support implementation efforts injected billions of dollars reforming teacher
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evaluation. A report by the American Institutes for Research and RAND found that the
three studied districts spent between $6.4 million and $24.8 million to support the
development and implementation of teacher evaluation.
27
According to a 2011 review by the Hechinger Report, a range of non-profit and
for-profit groups are benefiting from the demand for support and the infusion of cash.
28
The American Institutes for Research and Houghton Mifflin Harcourt won large contracts
from Florida to develop classroom observation methods and statistical models for grading
teachers based on student achievement.
29
The New Teacher Project, the American
Federation of Teachers, the Charlotte Danielson Group, Mathematica, and the National
Institute for Excellence in Teaching have all had a hand in designing or supporting
implementation of teacher evaluation in districts and states across the country.
30
While states and the federal government have invested considerably in developing
and purchasing appropriate professional supports, these have not been reliably associated
with improved implementation. Failures to distinguish levels of effectiveness through
observations, the disconnect between observations and value-added measures of
effectiveness, and declining support for evaluations from both school leaders and teacher,
have been documented in states, like Tennessee, that invested considerably in
implementation supports.
A final impact of teacher evaluation is on the landscape for teacher preparation
programs, which are dominated by traditional schools of education but also increasingly
operating in a competitive environment with newer, non-traditional providers such as
Teach For America and High Tech High. Teacher evaluation reform has generated new
data by which different kinds of teacher preparation programs can be evaluated. Not only
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can evaluation data be used to identify and potentially phase out weak teacher preparation
program, but it can also be used to validate newer, non-traditional models of teacher
preparation. As reported in a 2013 report by the National Council of Teacher Quality,
three states – Louisiana, North Carolina, and Tennessee – have pioneered the use of
teacher evaluation data to rate teacher preparation programs.
31
It remains to be seen
whether these rating programs will influence consumer demand for different types of
teacher preparation programs.
Charter Schools
Charter schools aim to create new regulatory spaces for entrepreneurship by providing
entrepreneurs opportunities to create new schools, and indirectly, by creating demand for
new services and supports traditionally provided by the district central office.
Charter schools are publicly funded but privately managed and they enable
individuals and groups with new ideas about how to organize schools – e.g., a longer
school day or different curriculum – the opportunity to put their ideas into practice free
from many of the regulatory constraints that limit what traditional public schools can do.
In exchange for their wider freedom of action, charter schools are typically held to higher
performance standards than traditional public schools and face closure if they feel to meet
those standards.
In 1991, Minnesota became the first state in the nation to authorize the creation of
charter schools. Since then, 43 states plus the District of Columbia have charter laws on
the books. In the 2014-2015 school year, 6,700 charter schools were operating, serving
more than 2.9 million students.
32
In several urban school systems, including New
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Orleans, Washington, D.C., Detroit, Philadelphia, Cleveland, and Indianapolis, charter
schools serve a quarter or more of all public school students.
33
Charter schools are an increasingly significant tool for state education agencies
and their supporters in state legislatures and governor’s offices seeking to intervene in
low-performing schools.
34
The first “recovery school district” began in Louisiana after
Hurricane Katrina devastated New Orleans but has since spread to Tennessee, Michigan,
and Georgia, with several other states considering similar measures. Unlike previous state
takeover efforts, these state-managed districts reconstituted low-performing schools as
charters, arguably enabling new people and ideas to be drawn some of the nation’s most
struggling schools and providing them with extensive flexibility to improve outcomes for
students.
One way in which charter schools have shaped entrepreneurship is by stimulating
demand for services traditionally provided by a district central office. For-profit and non-
profit organizations have emerged to provide a range of services including back office
services (e.g., EdTec), professional development for teachers (e.g., BloomBoard), data
management (e.g., Illuminate Education), food services (e.g., 4
th
Sector Solutions),
substitute teachers (e.g, EnrichED), special education services (e.g., Seneca), and
supports for at-risk students (Success Highways). While the extent of growth driven by
demand from charter schools is difficult to track, there is little doubt that the expansion of
the charter sector has created opportunities for new service providers to enter the market.
State policies shape the size of the charter sector. While the number of charter
schools serving students has grown tremendously over the last decade, in many states
growth is constrained by caps that limit the number of charter schools allowed to operate.
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Twenty-three states and the District of Columbia impose caps on the number of charter
schools allowed.
35
Other state policies can restrict the growth of charters by limiting the number and
type of entities allowed to authorize charter schools. In seven states (Wyoming, Iowa,
Virginia, Maryland, Alaska, Kansas, and Oregon), local education agencies are the only
entity authorized to sponsor charter schools. Of course, because charter schools are in
competition with district schools for students, they typically have few incentives to
regularly authorize schools. While 90% of the nation’s 1,045 authorizers are school
districts, LEA authorized schools account for just over half of the total sector. State
education agencies, independent charter boards, municipal government, and nonprofits
are much more likely to be large authorizers with portfolios of 10 or more schools.
36
These policies are important because a primary way in which charter schools can shape
entrepreneurialism is by eliminating the monopoly over public education and creating
competition that in theory can benefit families and students.
Federal, state, and local financial support for charter schools can also affect the
size and quality of the sector. A report produced by the School Choice Demonstration
Project at the University of Arkansas found that charter schools typically receive $3,814
less in funding than their traditional peers, a difference of 28.4 percent.
37
While this gap
is substantial, significant variability was found across states: in Tennessee, charter
schools and district schools received nearly equal per pupil funding while in Louisiana,
charter schools receive half as much as their peers in districts.
In addition to different per pupil allotments, charter schools also typically lack
access to capital improvement funds to support buying and/or renovating facilities. As
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detailed by the Charter School Facilities Initiative, the lack of capital funding means that
charter schools typically have smaller facilities and lack kitchens, gymnasiums, computer
labs and other specialized instructional spaces.
38
Increases in federal funding have helped to mitigate the effects of limits on state
and local funding. The U.S. Department of Education’s Charter Schools Program
provides financial support to create and scale high quality charter schools.
39
In 2012, the
program provided over $14 million in funding to support expansion efforts of large non-
profit charter management organizations like Democracy Prep and KIPP. In early 2015,
the Obama Administration’s budget included a 48 percent increase for the charter school
program, totaling over $253 million.
40
In addition to access to facilities and funding, the regulatory environment
critically shapes the ways in which charter schools can operate. When freed from typical
constraints over hiring, use of time and technology, and curriculum, charter schools have
an opportunity to experiment with new approaches to teaching and learning. According to
the Education Commission of the States, states vary considerably in whether charter
schools qualify for a waiver from most regulatory requirements
41
and in many cases,
operational autonomy is constrained by requirements that charter schools participate in
state teacher evaluation systems or local collective bargaining agreements, or by
requirements that they negotiate with state education agencies for any needed waivers.
42
One of the most significant changes the regulatory environment for charter
schools has been the increased focused on accountability and public oversight. The
National Association of Charter School Authorizers was established in 2000 and works to
disseminate best practices in charter school authorizing. In 2012, they initiated their “One
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Million Lives Campaign” in an effort to pressure authorizers and state policymakers to
adopt best practices for authorizers.
43
One consequence of these efforts have been new
policies that establish guidelines for charter authorizing and renewal, automatic closure
policies for charter schools facing academic or financial mismanagement, and efforts to
strengthen state oversight of authorizers. In states like Ohio and Michigan, whose large
charter sectors are not as high performing as counterparts elsewhere, legislation
tightening rules on authorizers has support from both Republicans and Democrats.
44
While the increased focus on quality authorizing has improved the quality of the
charter sector nationwide, unintended consequences may serve to limit innovation in the
sector moving forward.
45
One factor is raising barriers to entry for new operators.
Applications for charters are increasingly lengthy, a trend that no doubt favors large,
established charter management organizations to the detriment of smaller, community-
based non-profits.
46
Another is providing disincentives for risk-taking and
experimentation, a key motivation for establishing charters.
47
According to 2014 data
from the Center on Education Reform, the most popular educational approach amongst
surveyed charters was college preparatory (30 percent), a 17 percent increase compared
to similar data reported in 2002. Technology-based approaches were used by a small
minority of surveyed charters (6% reported using blended learning and 2% were fully
virtual).
48
These trends suggest that while charter schools provide educators with much
more flexibility to innovate in school organization, curriculum, and talent management,
they also face regulatory pressures that constrain their actions in unintended ways.
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Post-NCLB Accountability
In public education, test-based accountability is a regulatory reform that aims to shift the
focus from specifying what schools do to instead making schools accountable for what
they achieve. In theory, the shift in focus from inputs to outputs should enable
entrepreneurship by providing schools and those that support them with additional
flexibility and incentives to achieve desired aims. Yet, because the public objectives for
K-12 education are broad and multi-faceted, including such equivocal concepts as
“citizenship” and “college readiness,” test-based accountability has been hotly contested
and had unintended negative consequences. Even when implemented well, accountability
pressures can crowd out ideas and people who excel in areas that are not measured and
limit risk taking and experimentation for fear of failure.
The experiences of states with No Child Left Behind Act offers a case in point of
the unintended consequences associated with test-based accountability. Because NCLB
focused on raw proficiency levels, it provided an incredibly crude yardstick for judging
the effectiveness of different educational programs and resulted in a variety of perverse
consequences, including a weakening of state standards, narrowing of curriculum, and a
focus on “bubble kids” on the cusp of meeting proficiency.
49
The law also vastly over-
identified the number of failing schools, with nearly 50 percent of the nation’s public
schools failing to make AYP in the 2010-2011 school year.
50
Dissatisfaction with NCLB led to a series of programs and reforms that aimed to
improve accountability and provide the incentives and support needed to turnaround low
performing schools. The administration’s signature initiative came in 2009 when
Department of Education announced a new approach to dealing with the nation’s
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persistently lowest-achieving schools. The program used $3.5 billion from the American
Recovery and Reinvestment Act (ARRA) to expand the budget of Title I School
Improvement Grants (SIG) and make the award of funding competitive. The SIG
program offered state education agencies and districts additional flexibility for
identifying low-performing schools but made the funds contingent on implementing one
of four prescribed turnaround models, including closure and staff replacement.
The program generated important opportunities for entrepreneurs working in both
the public and private sectors. The influx of funding, which typically included
investments of up to $2 million per year per school for up to three years, enabled the
purchase of targeted supports and materials as well as provided opportunities to design
innovative school models featuring expanded learning time and greater personalization.
51
Schools were also typically granted additional flexibility through regulatory waivers and
freedom from typical staffing constraints.
Available research on how these funds were deployed suggests that private
support providers won a significant share of dollars. A Denver Post analysis found that
amongst states that tracked funds going to outside groups, the average was 25 percent of
awarded dollars. In Colorado, consultants won a 35 percent share of the $26.6 million
awarded to the state between 2010 and 2012, which went to purchase instructional
coaches for teachers, leadership coaches for principals, analysts to review data, and
professional development for school staff.
52
Evidence about the effectiveness of these providers is generally lacking. The
aforementioned review by the Denver Post found lackluster performance by the New
York City-based Global Partnership Schools, which took over six schools in Pueblo,
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Colorado (the company also operates SIG schools in Baltimore and Bridgeport,
Connecticut). A U.S. Government Accountability Office report found “inconsistent
review of contractors” and a general lack of accountability for results amongst districts,
schools, and contractors.
53
These findings generally echo those from the larger SIG
program: nearly as many schools exhibited gains as saw declines, despite the fact that
they received millions in federal funds.
54
These discouraging outcomes likely have their roots in several factors. One is that
states, districts, and schools were often not well positioned to oversee contractors or the
larger school improvement plan. Compliance offices in state education agencies and
school districts were developed to ensure grantees and contractors submitted the right
paperwork and followed other procedural requirements. They are not generally well
equipped to hold grantees and contractors accountable for performance. As a testament to
this fact, studies have documented the lack of oversight of the program, with few states
using student achievement data to make grant renewal decisions.
55
Indeed, a 2012
Department of Education audit found that many schools did not follow through with
planned efforts to expand learning time or hire new staff and neither the state nor district
had followed through to approve changes to their turnaround plan.
56
The lack of effective oversight was likely exacerbated by the speed with which
the program was launched and then concluded – schools had just three years to design
and implement their turnaround plan, including the expenditure of all awarded funds.
According to an Education Week series documenting schools’ experiences with the SIG
program, the time crunch seriously impeded the success of the program, leaving districts
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with little time to make the staffing changes required by the program’s approved
turnaround models.
A final factor was the lack of attention to the need for reforms to state and district
operating systems, which in many cases created barriers to engaging in effective
oversight, identifying internal and external supports for schools, and implementing and
sustaining different turnaround models. For example, expanding learning time was a key
component of the SIG program but many schools bumped into teacher collective
bargaining agreements that limited what they could do on this front.
These challenges hold important lessons for policymakers seeking to leverage
funds to stimulate entrepreneurship. For funding to be an effective shaper of
entrepreneurial effort, outcomes need to be clearly specified and overseen. In the case of
the SIG program, guidance was far more prescriptive on what schools should do and less
prescriptive on what they needed to achieve, flipping the conventional wisdom of
performance-based contracting, in which outcomes are clearly specified and means are
left to decision-makers who have the required skills and expertise.
POLICY AND THE FUTURE OF ENTREPRENEURSHIP
Compared to recent history, public education in the United States remains more open to
entrepreneurs than ever before. Education is more transparent and focused on results, due
in no small part to reforms like teacher evaluation, Common Core, and test-based
accountability. School districts no longer hold a monopoly on operating schools and
many cities and states, charter schools are a large and growing provider of public
education.
DRAFT: Do not cite without permission from the author.
22
But challenges remain. Education persists as a highly regulated enterprise that is
resistant to new sources of talent and ways of organizing schools. While some of these
regulations are important for protecting children and taxpayers, many are artifacts of
previous eras that persist due to the power of inertia and politics.
At the same time, the structures in place to oversee both public and private
ventures in education remain weak. State education agencies and districts often lack the
capacity to oversee grants and contracts in ways that will incentivize entrepreneurialism.
In the absence of good oversight, millions of public funds are spent with little to show for
it.
The movement towards performance-based regulation, including teacher
evaluation and test-based accountability, sought to create clear metrics for evaluating
quality and incentives to drive the actions of educators. In theory, these reforms provided
a basis for moving away from prescribing inputs to instead focusing on performance. Yet,
the changes to the reform landscape that have unfolded over the last decade have done
little to address the scope of compliance responsibilities laid upon administrators,
principals, and teachers or to bolster the capacity of the compliance office to move
towards performance-based oversight.
In the wake of the lessons emerging from the previous decade of reform, federal and
state policymakers can take a variety of concrete steps that greatly shape entrepreneurs
opportunities to innovate. Federal, state, and local policymakers looking to encourage
entrepreneurialism in public education ought to leverage their authority and unique
policymaking roles to:
DRAFT: Do not cite without permission from the author.
23
? Reform procurement processes: In public education, government is a huge
consumer of products and services in the private sector. This gives government
leverage to stimulate entrepreneurship through its purchasing power. Yet,
regulation of contracting and procurement create unnecessary barriers to entry and
limit the diffusion of innovative practices. As discussed by Tricia Maas and Robin
Lake, state and local policymakers can leverage their existing investments in
entrepreneurship by eliminating barriers that favor large firms and focusing
procurement systems on end-users (whether they are families, principals, or
teachers).
57
? Refashion the compliance office: While procurement processes keep private
sector organizations from contributing to public goods, the compliance office
often works against public sector employees seeking to try out new ideas or tweak
routines. While state and district officials can and should refashion the
compliance office by eliminating outdated regulatory requirements, these reforms
should be coupled with efforts to improve the capacity and skill of individuals
working within the compliance office.
58
Taking these steps will ensure that
compliance officers are willing to help educators interested in finding ways to
innovate within existing regulatory frameworks. At the same time, it is important
that efforts to reform the compliance office do not result in weakened agencies
that are incapable of holding grantees and contractors accountable for outcomes.
As revealed by the weaknesses in the SIG program, the solution to failures in the
public sector is not simply to channel funds into the private sector. Contracting
DRAFT: Do not cite without permission from the author.
24
and grant-making is difficult work and requires investments in capacity building
to ensure desired outcomes are achieved.
? Invest in research: Federal and state policymakers devote little to education
research, especially when compared to investments in other areas. While the
National Institute for Health spent over $30 billion in health research in FY2014,
the Institute for Education Sciences (IES) invested just $600 million. This
difference is all the more remarkable given the considerable investments private
companies make in health research and development. Investing in research serves
two purposes. First, it can directly produce or contribute to innovations in
education. Second, investments in research can help schools and districts be smart
consumers of the many products, services, and improvement strategies that are
offered. One notable example of an effective federal effort to invest in research is
the Investing in Innovation (i3) fund. Originally created through the American
Reinvestment and Recovery Act, i3 is a competitive grant program managed by
the Department of Education that aims to help grantees develop and scale
innovative practices that address common challenges. While many grant programs
discourage partnerships with philanthropy and the private sector, i3 aimed to
capitalize on collaborations across sectors. As Martin West discusses, i3 differed
from the other competitive grant programs launched through Race to the Top in
that it was much less prescriptive and more focused on evidence.
59
States looking
for evidence about what works in their own backyards could launch similar
programs to draw attention to and learn from innovation that’s already happening.
DRAFT: Do not cite without permission from the author.
25
? Encourage transparency in reporting student outcomes: Most states have invested
in longitudinal data systems that enable tracking of school performance over time
and by subgroup. Yet few have worked to disseminate this information in formats
that are easy to digest and understand. Federal policymakers should encourage
greater transparency by requiring states to report disaggregated student outcomes
in an easily digestible format. Transparency is a powerful, if underutilized, tool
for government to pursue public objectives without the heavy hand of regulation.
It addresses a key market failure by improving the information available to
families choosing among schools. And it can provide a basis for conversations
about what communities are not being well served by existing schools.
While these reforms are far less provocative than the ones that have reshaped the
policy landscape over the last decade, they could have tremendous impact on
entrepreneurship. Through a thoughtful mix “carrots, sticks, and sermons,” policymakers
can ensure taxpayers are protected, children benefit, and public education advances in the
next era.
DRAFT: Do not cite without permission from the author.
26
1
Anne Schneider and Helen Ingram, 1990, “Behavioral Assumptions of Policy Tools,” The Journal of
Politics 52(2): 510-529.
2
For a review of definitions, see Thomas A. Birkland, An Introduction to the Policy Process: Theories,
Concepts, and Models of Public Policy Making, (New York: M.E. Sharpe, 2011).
3
Entrepreneurship in this sense is not the same as innovation. Innovation is more disruptive;
entrepreneurship can disrupt but may also simply improve upon existing practice.
4
Patrick McGuinn, “The Policy Landscape of Educational Entrepreneurship,” in Frederick Hess, ed.,
Educational Entrepreneurship: Realities, Challenges, and Possibilities, (Cambridge: Harvard Education
Press, 2006).
5
Digital Promise and IDEO, Evolving Ed-Tech Procurement in School Districts (Washington, DC: Digital
Promise, 2013). See also Tricia Maas and Robin Lake, A Blueprint for Effective and Adaptable School
District Procurement (Seattle, WA: Center on Reinventing Public Education, 2015).
6
Jennifer Booher-Jennings, 2005. “Below the Bubble: “Educational Triage” and the Texas Accountability
System,” American Education Research Journal 42(2): 231-268.
7
In a posthumous biography, CEO Steve Jobs labeled the textbook industry “ripe for destruction.” Quoted
in Steven R. Strahler, “Textbook case of a dying biz,” Chicago Business, March 3, 2012.
8
Strahler, March 3, 2012.
9
Sarah Garland, “Common Core standards shake up the education business,” Hechinger Report October
15. 2013.
10
Robert Pondiscio, “Common Core’s first breakout hit?” Education Next June 10, 2015.
11
Diane Stark Rentner and Nancy Kober, Common Core State Standards in 2014: Curriculum and
Professional Development at the District Level (Washington, DC: Center for Education Policy, 2014).
12
Ibid.
13
Garland October 15, 2013.
14
Ibid.
15
Sean Cavanagh, “Common-Common Core Testing Contracts Favor Big Vendors,” Education Week
September 30, 2014.
16
Sean Cavanagh, “Amplify Insight Wins Contract From Common-Core Testing Consortium,” Education
Week March 14, 2013.
17
Catherine Gewertz, “A Map of States’ 2015 Testing Plans: The Dust Has Finally Settled,” Education
Week February 4, 2015.
18
Frederick M. Hess and Michael Q. McShane, Common Core Meets Education Reform: What It All
Means for Politics, Policy, and the Future of Schooling (Cambridge, MA: Harvard Education Press, 2013).
19
Brian A. Jacob, 2005, “Accountability, Incentives, and Behavior: The Impact of High-Stakes Testing in
the Chicago Public Schools,” Journal of Public Economics 89(5-6): 761-796.
20
Daniel M. Koretz, Robert L. Linn, Stephen B. Dunbar, and Lorrie A. Shepard, “The Effects of High
Stakes Testing on Achievement,” Paper presented at the Annual Meetings of the American Educational
Research Association (Chicago, IL, April 3-7, 1991).
21
Just 10 states (Alabama, California, Idaho, Iowa, Montana, Nebraska, New Hampshire, North Dakota,
Texas, and Vermont) have no formal policy requiring teacher evaluations to take student achievement into
account. See National Council on Teacher Quality, State of the States 2013, Connect the Dots: Using
Evaluations of Teacher Effectiveness to Inform Policy and Practice, (Washington, DC: NCTQ, 2014).
22
Center for Great Teachers and Leaders, American Institutes for Research, Databases on State Teacher
and Principal Evaluation Policies, “Measures of Teacher Performance (Observation).” Accessed June 6,
2015.
23
Frederick M. Hess and Michael Q. McShane, Teacher Quality 2.0: Toward a New Era of Education
Reform, (Cambridge, MA: Harvard Education Press, 2014).
24
TNTP, Reimagining Teaching In A Blended Classroom, (Washington, DC: TNTP, 2014).
25
Fordham Institute, “Traversing the Teacher Evaluation Terrain,” November 18, 2013. Washington, DC.
26
Maas and Lake 2015.
27
Jay Chambers et al. How Much Are Districts Spending to Implement Teacher Evaluation Systems? Case
Studies of Hillsborough County Public Schools, Memphis City Schools, and Pittsburg Public Schools.
(Washington, DC: RAND and American Institutes for Research, 2013).
28
Sarah Garland, “Companies, nonprofits making millions off teacher effectiveness push,” Hechinger
Report October 25, 2011.
DRAFT: Do not cite without permission from the author.
27
29
Ibid.
30
Ibid.
31
National Council on Teacher Quality, Teacher Preparation Program Student Performance Data Models:
Six Core Design Principles, (Washington, DC: NCTQ, 2013).
32
National Alliance for Public Charter Schools, Estimated Number of Public Charter Schools and Students,
2014-2015, (Washington, DC: NAPCS, 2014). Accessed February 12, 2015:
http://www.publiccharters.org/wp-content/uploads/2015/02/open_closed_FINAL.pdf.
33
National Alliance for Public Charter Schools, A Growing Movement: America’s Largest Charter School
Communities (Washington, DC: NAPCS, 2013). Accessed February 12, 2015:
http://www.publiccharters.org/wp-content/uploads/2014/01/2013-Market-Share-Report-
Report_20131210T133315.pdf.
34
See, for example, Nelson Smith, The Louisiana Recovery School District: Lessons for the Buckeye State,
(Washington, D.C.: The Thomas B. Fordham Institute, 2012). See also Robin Baker, Kellly Hupfeld and
Pasul Teske, Turnarounds in Colorado: Partnering for Innovative Reform in a Local Control State,
(Denver: Buchner Institute of Government, University of Colorado Denver, 2013).
35
The Public Charter Schools Dashboard, National Alliance for Public Charter Schools, 2009-2010.
Accessed February 12, 2015: http://dashboard.publiccharters.org/dashboard/policy/page/cap/year/2010
36
National Association of Charter School Authorizers, The State of Charter School Authorizing: A Report
on NACSA’s Authorizer Survey, (Washington, DC: NACSA, 2013).
37
Meagan Batdorff, Larry Maloney, Jay F. May, Sheree T. Speakman, Patrick J. Wolf, and Albert Cheng,
Charter School Funding: Inequity Expands, (Fayetteville, AR: School Choice Demonstration Project,
Department of Education Reform, University of Arkansas, 2014).
38
Charter School Facilities Initiative, Initial Findings From Ten States (2013), Accessed February 15,
2015: http://www.facilitiesinitiative.org/media/3080/csfinationalsummary-fnl_april2013_.pdf.
39
Office of Innovation and Improvement, U.S. Department of Education, “Charter Schools Program,”
Accessed February 16, 2015: https://www2.ed.gov/about/offices/list/oii/csp/index.html?exp=7.
40
Ariana Prothero, “Obama’s Budget Aims to Boost Charter School Funding,” Education Week, February
2, 2015. Accessed February 15, 2015:
http://blogs.edweek.org/edweek/charterschoice/2015/02/obamas_budget_proposes_boosts_charter_school_
funding.html.
41
Education Commission of the States, “Charter Schools – What Rules Are Waived For Charter Schools?”
(Washington, DC: ECS, 2014), Accessed February 16, 2015:
http://ecs.force.com/mbdata/mbquestNB2?rep=CS1419.
42
National Alliance for Public Charter Schools, “Measuring Up: Automatic Exemption From Many State
and District Laws and Regulation,” Accessed February 16, 2015: http://www.publiccharters.org/law-
database/automatic-exemptions-state-district-laws-regulations/.
43
National Association for Charter School Authorizers, “One Million Lives in Action,” Accessed February
16, 2015: http://www.qualitycharters.org/one-million-lives/one-million-lives-in-action.html.
44
For Ohio, see Catherine Candisky and Jim Siegel, “GOP plan would increase accountability for Ohio
charter schools,” The Columbus Dispatch January 29, 2015. For Michigan see Kyle Feldscher, “Democrats
Announce Charter School Reforms That Would Increase Transparency,” MLive.com October 21, 2014,
Accessed February 17, 2015: http://www.mlive.com/lansing-
news/index.ssf/2014/10/democrats_announce_proposed_ch.html.
45
See for example Center for Research on Education Outcomes, National Charter School Study, (Stanford,
CA: CREDO, 2013).
46
Michael Q. McShane, Jenn Hatfield, and Elizabeth English, The Paperwork Pile-Up: Measuring the
Burden of Charter School Applications, (Washington, DC: American Enterprise Institute, 2015).
47
Some critics allege that the laser-like focus on quality in New Orleans has led to uniformity in the sector.
See Cowen Institute, The State of Public Education in New Orleans (New Orleans, LA: Tulane University,
2014).
48
Ted Regarber and Alison Consoletti Zgainer (eds.), The Essential Guide to Charter School Operations:
Survey of America’s Charter Schools, (Washington, DC: Center for Education Policy, 2014).
49
Jennifer Booher-Jennings, 2005. “Below the Bubble: “Educational Triage” and the Texas Accountability
System,” American Education Research Journal 42(2): 231-268.
50
Center for Education Policy, States’ Perspectives on Waivers: Relief from NCLB, Concern About Long-
term Solutions, (Washington, DC: Center on Education Policy, 2013).
DRAFT: Do not cite without permission from the author.
28
51
Jennifer Brown, “Cost doesn’t spell success for Colorado schools using consultants to improve
achievement,” Denver Post February 19, 2012.
52
Ibid.
53
Government Accountability Office, School Improvement Grants: Education Should Take Additional
Steps to Enhance Accountability for Schools and Contractors, (Washington, DC: GAO, 2012).
54
Alyson Klein, “School Improvement Grant Program Gets Mixed Grades in Ed. Dept. Analysis,”
Education Week November 21, 2013.
55
GAO 2012.
56
Office of School Turnaround Monitoring, Department of Education, accessed December 15, 2012,
http://www2.ed.gov/programs/sif/monitoring/index.html.
57
Tricia Maas and Robin Lake, A Blueprint for Effective and Adaptable School District Procurement,
(Seattle, WA: Center on Reinventing Public Education, 2015).
58
Frederick M. Hess, Cage-Busting Leadership, (Cambridge, MA: Harvard Education Press).
59
Martin R. West, Preserving the Federal Role in Encouraging and Evaluating Education Innovation,
(Washington, DC: Brookings Institution, 2015).
doc_561001527.pdf
Description explain carrots, sticks, and sermons how policy shapes educational entrepreneurship.
DRAFT: Do not cite without permission from the author.
0
Carrots, Sticks, and Sermons:
How Policy Shapes Educational Entrepreneurship
By Ashley Jochim
Center on Reinventing Public Education, University of Washington
RESEARCH PAPER: JUNE 24, 2015
Papers for this conference are available online at www.aei.org/feature/education-
entrepreneurship-papers/
DRAFT: Do not cite without permission from the author.
1
Public policy profoundly shapes the prospects for entrepreneurship in education. Not only
does government inject billions of dollars into both public and private providers of
educational services, but federal, state, and local entities regulate who can deliver
services and how services can and cannot be provided.
Compared to recent history, the policy landscape has made education more open
to entrepreneurs than ever before. Policy changes at the federal, state, and local level
have expanded parents’ options and service providers’ freedom of action. At the same
time, the evolution of test-based accountability and common standards has put new
pressures on entrepreneurs working within and outside of the traditional public school
system.
This essay begins by considering how different kinds of policy tools – “carrots,
sticks, and sermons” – shape entrepreneurship. It then considers how changes to the post-
No Child Left Behind policy landscape, including Common Core, charter schools, teacher
evaluation, and test-based accountability, have influenced the opportunities and obstacles
entrepreneurs face, including their access to resources, demand for their services, and
oversight of their work. It concludes with recommendations about how public policy can
more effectively encourage entrepreneurship in education.
DRAFT: Do not cite without permission from the author.
2
HOW POLICY SHAPES ENTREPRENEURSHIP
“Public policy almost always attempts to get people to do things that they
might not otherwise do; or it enables people to do things that they might not have
done otherwise.”
–Anne Schneider and Helen Ingram, 1990
1
Public policy is the result of government actions (and inactions) intended to shape the
behavior of public and private actors.
2
Public policy can take many forms, including
laws, regulations, court decisions, and programs.
Entrepreneurship is any activity related to the development of new organizations,
methods, or products that challenge or improve upon existing ways of doing business.
3
Entrepreneurship can be undertaken in both the public and private sector. As described by
Patrick McGuinn,
4
public entrepreneurship includes efforts by teachers and
administrators employed by public agencies to experiment with new ideas and methods
while private entrepreneurship involves similar efforts by individuals and organizations
working in the for-profit and nonprofit sectors.
Public policy shapes entrepreneurship in three ways: (1) prescribing action
through regulation; (2) incentivizing action through grants or subsidies; and (3)
encouraging action by providing information. Colloquially, these different approaches to
shaping individual and organizational behavior are known as “carrots, sticks, and
sermons.”
Perhaps the most traditional means of shaping entrepreneurship is through
regulation. Regulation impacts entrepreneurs by requiring certain processes to be
followed. In the public sector, regulations limit the kinds of individuals who can become
teachers, how students may be assigned to schools, the number of students allowed to be
DRAFT: Do not cite without permission from the author.
3
served by a single teacher, the types of curriculum that can be used, and the length of the
school day and year. These rules about how schools are organized and staffed can open or
foreclose opportunities for entrepreneurs looking to employ new methods of instruction
(e.g., competency-based learning), make use of untapped labor pools (e.g., local artists or
museum staff to provide enrichment), or make tradeoffs between people and technology
(e.g., by using resources dedicated to hiring a teacher to instead purchase software and
instructional aides). While regulation typically imposes costs on entrepreneurs, it can also
open opportunities. Common instructional standards, for example, can lower barriers to
entry to entrepreneurs and expand potential markets for goods and services.
Regulation also dictates how and what kinds of services districts and state
education agencies demand from the private sector, thereby shaping the prospects for
entrepreneurship by nonprofit and for-profit organizations. For example, a byzantine
procurement process within a district central office can make it impossible for smaller
firms to offer products and services to districts; rules meant to prevent collusion between
educators, district staff, and for-profit firms often mean that entrepreneurs cannot have
access to the consumers that would enable them to tailor their products to better meet the
needs of educators and schools.
5
Government can also affect entrepreneurship by incentivizing desired behaviors.
Providing grants, subsidies, and other resources encourages public and private entities to
engage in preferred activities. For example, the Obama administration’s Race to the Top
(RTTT) program offered states the possibility of securing millions in grant dollars in
return for passing favored policies around teacher evaluation and Common Core
standards.
DRAFT: Do not cite without permission from the author.
4
Just like regulation, incentives can open and foreclose opportunities for
entrepreneurs. In the case of Race to the Top, the grant program was a boon to those
entrepreneurs providing Common Core aligned professional development and
curriculum, enabling them to vastly expand their market base as states rushed to adopt the
standards. It was less promising to providers of alternative materials and supports.
Public policy can also work by persuading individuals to act. Unlike regulation or
incentives, persuasion is not coercive and its effectiveness relies entirely on the voluntary
actions of target groups. It includes marketing campaigns (e.g., the “Just Say No”
campaign against drug use), reports that provide recommended actions (e.g., A Nation at
Risk), or policies that seek to improve information available to individuals or
organizations (e.g., quality ratings). Among the most significant uses of information as a
policy instrument in education is the effort by government agencies to create report cards
that provide information to families on school performance. Report cards do not directly
require or incentivize actions but they do influence school and parent behavior.
Of course, public policy can also have unintended effects on entrepreneurs. Test-
based accountability policies aimed to drive improvements in the quality of education but
had unintended impacts, including a narrowing of curriculum and reduced attention to
children well above or below the proficiency threshold set by states.
6
The Policy Landscape and Its Implications for Entrepreneurship in K-12
The last decade has brought a number of changes to the policy landscape that greatly
reshaped the prospects for educational entrepreneurship in the United States. This section
considers how four prominent reforms – Common Core, charter schools, teacher
DRAFT: Do not cite without permission from the author.
5
evaluation, and post-NCLB accountability – have shaped opportunities for entrepreneurs
operating both within the public system and outside of it.
Common Core
In 2009, the National Governors Association and the Council of Chief State School
Officers launched an effort to develop common standards in English and mathematics to
ensure that "all students, regardless of where they live, are graduating high-school
prepared for college, career, and life" (Common Core State Standards Initiative, 2015).
By 2011, one year after the standards had officially been released, 45 states plus the
District of Columbia had signed on.
Common Core, like all education standards, is a regulatory reform that aims to shape
what teachers teach and students learn. Unlike previous iterations of standards-based
reform, Common Core provides a content framework that is shared across a diverse
group of states. Because Common Core aligns content across millions of schools, it has
the potential to fundamentally disrupt the market for instructional materials by lowering
barriers to entry for instructional content providers, who will no longer have to tailor their
products to 50 states’ standards.
7
Yet, for the same reason, it could circumscribe
opportunities to innovate in curriculum and school design, as a “one-size-fits-all”
approach comes to dominate K-12 education.
The “big three” publishers – Pearson, McGraw-Hill, and Houghton-Mifflin—have
long dominated the marketplace for instructional content (textbooks, but also
supplementary materials like lesson plans, workbooks, and supporting software) and
control 85 percent of the $3.2 billion K-12 market.
8
Entering the industry was nearly
DRAFT: Do not cite without permission from the author.
6
impossible for a small-scale entrepreneur given 50 states with 50 different requirements
for instructional content in math, English language arts, and history.
Common Core has the potential to greatly improve the profitability of new
instructional content, since providers will be able to market content to multiple states. At
the same time, publishers are transitioning towards digitally based instructional content,
which may create an opportunity for new entrants to gain a foothold in the marketplace
by producing products that are cheaper without the investments required in a traditional
publishing environment.
Early results suggest that new entrants are gaining a foothold in the market. In New
York, an invitation by the State Education Department for new Common Core aligned
curriculum required all bids to put their materials online for free. According to journalist
Sarah Garland, the big three publishers “balked,” enabling four nonprofits to secure the
$8 million bid.
9
Early reviews of the materials, branded EngageNY, have been positive
and their reach has extended well beyond the borders of the state, with about half of all
downloads coming from outside of New York.
10
A report from the Center on Education Policy in 2014 suggests that fewer than four in
10 districts reported using curriculum materials produced by for-profits and about half
reported relying on for-profits for professional development.
11
Non-profits, arguably
smaller and less established in the provision of instructional content, were providing
curriculum content for 14 percent of districts and professional development for 35
percent of districts.
12
Importantly, having common standards has enabled niche nonprofits to find new
audiences for their particular brand of education reform. As discussed by Garland,
DRAFT: Do not cite without permission from the author.
7
Expeditionary Learning, an organization that advocates for project-based curriculum,
won contracts from Teach For America, KIPP charter schools, and the state of Delaware
to train teachers in the new standards.
13
Another nonprofit, Core Knowledge, which
advocates a back to basics approach to reading comprehension, was one of the four
groups to secure contracts from New York State to develop curriculum in English
language arts.
14
In addition to private investment and new entrants into the market for digital
instructional content, Common Core has also enabled the expansion of repositories for
digital instructional materials like Share My Lesson. Since 2012 when Share My Lesson
was launched by the American Federation of Teachers and TES Connect, the site has
generated over 300,000 free teaching resources. While these repositories could exist
without Common Core, their potential impact is much more significant in a world in
which a teacher in Utah can share instructional materials with a teacher in Maryland.
In contrast to the implications for content developers, changes to the testing landscape
have thus far largely favored the largest testing companies: Pearson, McGraw-Hill, and
the Educational Testing Service. While in previous years smaller companies may have
been able to compete by specializing in a given state, the reach of the new assessments
have significantly expanded the scope of the work, thereby privileging the testing
industry’s largest players.
15
Of course, changes in the membership composition of the two main consortia
developing Common Core-aligned assessments could greatly affect the marketplace. In
early 2015, 18 states remained committed to the Smarter Balanced Assessment
Consortium (SBAC).
16
Just ten states plus D.C. remained in the Partnership for
DRAFT: Do not cite without permission from the author.
8
Assessment of Readiness for College and Careers.
17
Twenty-one other states were relying
on other tests developed by other vendors.
How the new tests affect teaching and learning is a key concern. Some critics worry
that the Common Core will lead to a narrowing of curriculum and limit opportunities for
innovation in schools. As Robin Lake and Tricia Maas observe, charter leaders have
expressed concern that the standards “could end up taking away…teachers’ freedom to
use diverse options to meet student needs by forcing schools to teach certain standards in
certain grades, at certain times of the year, or eventually, by prescribing a curriculum.”
As Frederick Hess and Michael McShane discuss, given the standards increased attention
to scope and sequencing of content, Common Core may prove problematic for newer
school models, like Carpe Diem or Summit Academies, which utilize competency-based
learning models that enable students to progress at their own pace.
18
While it remains to be seen whether implementing the standards will result in a “one-
size-fits-all” approach to student learning, as critics fear, it is well recognized that
standards-based reforms can and often do foreclose certain kinds of entrepreneurialism
and make individuals who work in schools more averse to investing in activities that do
not payoff in terms of improved student achievement in covered subjects. Much has been
written about how high stakes tests can crowd out learning in areas that are not directly
tested (e.g., civics, history, science)
19
and that test preparation activities do not generalize
to the broader areas of learning tests are intended to measure.
20
DRAFT: Do not cite without permission from the author.
9
Teacher Evaluation
Efforts to improve the quality of the teaching workforce are as old as public
education and have varied in their focus from managing what kinds of educational
experiences teachers must have before they enter the workforce, shaping the professional
development of teachers already in the workforce, and most recently, refashioning how
teachers are evaluated on the job to inform decisions about recruitment, retention, and
development.
The Obama administration’s RTTT competitive grant program and Elementary
and Secondary Education Act (ESEA) Flexibility waivers, favored states who put in
place evaluation systems that used multiple measures, including student achievement.
The results of these pressures have been extensive changes to the teacher evaluation
landscape. The National Council on Teacher Quality (NCTQ) reported that between 2009
and 2013, 26 states changed their policy on teacher evaluation. By 2013, 41 states plus
the District of Columbia required student achievement to be a “significant factor” in
teacher evaluations, 26 states differentiated levels of performance, and 39 states used
classroom observations.
21
Reforms to teacher evaluation shape the entrepreneurial landscape in three ways:
(1) generating demands for new evaluation tools and rubrics; (2) opening up
opportunities for entrepreneurs providing professional development services and
supports; and (3) changing the market for teacher preparation programs.
Teacher evaluation reform has resulted in states and districts in search of
evaluation models, tools, and rubrics, and billions of dollars invested in designing and
implementing teacher evaluation systems. While much of the controversy over teacher
DRAFT: Do not cite without permission from the author.
10
evaluation has focused on the use of student achievement data, a key feature of reform
efforts was the inclusion of multiple measures of effectiveness, including classroom
observations and student feedback.
These investments created an opportunity for entrepreneurs to offer new tailored
evaluation tools well suited to the needs of the schools and districts that used them but
evidence suggests the reforms to date have favored a few providers. According to the
Center for Great Leaders and Teachers, twenty-three states either recommend or require
the use of Charlotte Danielson’s Framework for Teaching while another nine use
Marzono’s Teacher Evaluation Model.
22
In the vast majority of other states, locally-
developed models dominate (e.g., the Minnesota Performance Standards for Teacher
Practice), suggesting either a lack of appetite or demand for more specialty evaluation
products.
The lack of innovation in evaluation tools and rubrics is problematic given
important differences in what effective teaching looks like in different contexts. As
discussed by Hess and McShane, the current landscape of teacher evaluation may
underappreciate the kinds of skills that are important for classroom management and
lesson planning in online schools or schools that rely on a blend of technology and people
to guide instruction.
23
For example, the teacher evaluation tools in place at Summit
Public Schools, a charter management organization with 9 schools, rely less on high
touch observation and more on data generated from common assessments, which are
tailored to tap the skills and content knowledge school leaders have identified as key to
student success.
24
DRAFT: Do not cite without permission from the author.
11
There are three factors that may have dampened opportunities for innovation in
teacher evaluation tools and rubrics. One is that teacher evaluation reform has largely
been undertaken from the statehouse, resulting in systems that are prescribed and apply to
all districts. According to the National Council on Teacher Quality, 12 states have a
single statewide system and another 10 have “presumptive models,” which prescribe a
method but allow districts to opt out.
25
Even states that allow districts to select from an
pre-approved list may inadvertently curtail innovative approaches to evaluation or
evaluation models tailored to particular kinds of schools (e.g., blended learning models).
Another factor is because teacher evaluation reform spread rapidly, it favored
organizations already working in this area and those who could ramp up rapidly to
provide tools and rubrics to states and districts. Charlotte Danielson’s Framework for
Teaching, which is among the most widely used models for judging teacher effectiveness,
was developed in 2007. A final factor is the byzantine procurement systems that are in
place in many state education agencies and school districts. As discussed by Tricia Maas
and Robin Lake, complicated procurement systems often favor large firms with
established working relationships with education bureaucracies.
26
A second way in which teacher evaluation could shape the landscape for
entrepreneurs is by generating demand for professional implementation support. Reforms
to teacher evaluation required investments in the design of statistical models, training for
principals and other evaluators, and support for district and state education agency staff
who are charged with overseeing implementation.
The Obama Administration’s RTTT program as well as new state appropriations
to support implementation efforts injected billions of dollars reforming teacher
DRAFT: Do not cite without permission from the author.
12
evaluation. A report by the American Institutes for Research and RAND found that the
three studied districts spent between $6.4 million and $24.8 million to support the
development and implementation of teacher evaluation.
27
According to a 2011 review by the Hechinger Report, a range of non-profit and
for-profit groups are benefiting from the demand for support and the infusion of cash.
28
The American Institutes for Research and Houghton Mifflin Harcourt won large contracts
from Florida to develop classroom observation methods and statistical models for grading
teachers based on student achievement.
29
The New Teacher Project, the American
Federation of Teachers, the Charlotte Danielson Group, Mathematica, and the National
Institute for Excellence in Teaching have all had a hand in designing or supporting
implementation of teacher evaluation in districts and states across the country.
30
While states and the federal government have invested considerably in developing
and purchasing appropriate professional supports, these have not been reliably associated
with improved implementation. Failures to distinguish levels of effectiveness through
observations, the disconnect between observations and value-added measures of
effectiveness, and declining support for evaluations from both school leaders and teacher,
have been documented in states, like Tennessee, that invested considerably in
implementation supports.
A final impact of teacher evaluation is on the landscape for teacher preparation
programs, which are dominated by traditional schools of education but also increasingly
operating in a competitive environment with newer, non-traditional providers such as
Teach For America and High Tech High. Teacher evaluation reform has generated new
data by which different kinds of teacher preparation programs can be evaluated. Not only
DRAFT: Do not cite without permission from the author.
13
can evaluation data be used to identify and potentially phase out weak teacher preparation
program, but it can also be used to validate newer, non-traditional models of teacher
preparation. As reported in a 2013 report by the National Council of Teacher Quality,
three states – Louisiana, North Carolina, and Tennessee – have pioneered the use of
teacher evaluation data to rate teacher preparation programs.
31
It remains to be seen
whether these rating programs will influence consumer demand for different types of
teacher preparation programs.
Charter Schools
Charter schools aim to create new regulatory spaces for entrepreneurship by providing
entrepreneurs opportunities to create new schools, and indirectly, by creating demand for
new services and supports traditionally provided by the district central office.
Charter schools are publicly funded but privately managed and they enable
individuals and groups with new ideas about how to organize schools – e.g., a longer
school day or different curriculum – the opportunity to put their ideas into practice free
from many of the regulatory constraints that limit what traditional public schools can do.
In exchange for their wider freedom of action, charter schools are typically held to higher
performance standards than traditional public schools and face closure if they feel to meet
those standards.
In 1991, Minnesota became the first state in the nation to authorize the creation of
charter schools. Since then, 43 states plus the District of Columbia have charter laws on
the books. In the 2014-2015 school year, 6,700 charter schools were operating, serving
more than 2.9 million students.
32
In several urban school systems, including New
DRAFT: Do not cite without permission from the author.
14
Orleans, Washington, D.C., Detroit, Philadelphia, Cleveland, and Indianapolis, charter
schools serve a quarter or more of all public school students.
33
Charter schools are an increasingly significant tool for state education agencies
and their supporters in state legislatures and governor’s offices seeking to intervene in
low-performing schools.
34
The first “recovery school district” began in Louisiana after
Hurricane Katrina devastated New Orleans but has since spread to Tennessee, Michigan,
and Georgia, with several other states considering similar measures. Unlike previous state
takeover efforts, these state-managed districts reconstituted low-performing schools as
charters, arguably enabling new people and ideas to be drawn some of the nation’s most
struggling schools and providing them with extensive flexibility to improve outcomes for
students.
One way in which charter schools have shaped entrepreneurship is by stimulating
demand for services traditionally provided by a district central office. For-profit and non-
profit organizations have emerged to provide a range of services including back office
services (e.g., EdTec), professional development for teachers (e.g., BloomBoard), data
management (e.g., Illuminate Education), food services (e.g., 4
th
Sector Solutions),
substitute teachers (e.g, EnrichED), special education services (e.g., Seneca), and
supports for at-risk students (Success Highways). While the extent of growth driven by
demand from charter schools is difficult to track, there is little doubt that the expansion of
the charter sector has created opportunities for new service providers to enter the market.
State policies shape the size of the charter sector. While the number of charter
schools serving students has grown tremendously over the last decade, in many states
growth is constrained by caps that limit the number of charter schools allowed to operate.
DRAFT: Do not cite without permission from the author.
15
Twenty-three states and the District of Columbia impose caps on the number of charter
schools allowed.
35
Other state policies can restrict the growth of charters by limiting the number and
type of entities allowed to authorize charter schools. In seven states (Wyoming, Iowa,
Virginia, Maryland, Alaska, Kansas, and Oregon), local education agencies are the only
entity authorized to sponsor charter schools. Of course, because charter schools are in
competition with district schools for students, they typically have few incentives to
regularly authorize schools. While 90% of the nation’s 1,045 authorizers are school
districts, LEA authorized schools account for just over half of the total sector. State
education agencies, independent charter boards, municipal government, and nonprofits
are much more likely to be large authorizers with portfolios of 10 or more schools.
36
These policies are important because a primary way in which charter schools can shape
entrepreneurialism is by eliminating the monopoly over public education and creating
competition that in theory can benefit families and students.
Federal, state, and local financial support for charter schools can also affect the
size and quality of the sector. A report produced by the School Choice Demonstration
Project at the University of Arkansas found that charter schools typically receive $3,814
less in funding than their traditional peers, a difference of 28.4 percent.
37
While this gap
is substantial, significant variability was found across states: in Tennessee, charter
schools and district schools received nearly equal per pupil funding while in Louisiana,
charter schools receive half as much as their peers in districts.
In addition to different per pupil allotments, charter schools also typically lack
access to capital improvement funds to support buying and/or renovating facilities. As
DRAFT: Do not cite without permission from the author.
16
detailed by the Charter School Facilities Initiative, the lack of capital funding means that
charter schools typically have smaller facilities and lack kitchens, gymnasiums, computer
labs and other specialized instructional spaces.
38
Increases in federal funding have helped to mitigate the effects of limits on state
and local funding. The U.S. Department of Education’s Charter Schools Program
provides financial support to create and scale high quality charter schools.
39
In 2012, the
program provided over $14 million in funding to support expansion efforts of large non-
profit charter management organizations like Democracy Prep and KIPP. In early 2015,
the Obama Administration’s budget included a 48 percent increase for the charter school
program, totaling over $253 million.
40
In addition to access to facilities and funding, the regulatory environment
critically shapes the ways in which charter schools can operate. When freed from typical
constraints over hiring, use of time and technology, and curriculum, charter schools have
an opportunity to experiment with new approaches to teaching and learning. According to
the Education Commission of the States, states vary considerably in whether charter
schools qualify for a waiver from most regulatory requirements
41
and in many cases,
operational autonomy is constrained by requirements that charter schools participate in
state teacher evaluation systems or local collective bargaining agreements, or by
requirements that they negotiate with state education agencies for any needed waivers.
42
One of the most significant changes the regulatory environment for charter
schools has been the increased focused on accountability and public oversight. The
National Association of Charter School Authorizers was established in 2000 and works to
disseminate best practices in charter school authorizing. In 2012, they initiated their “One
DRAFT: Do not cite without permission from the author.
17
Million Lives Campaign” in an effort to pressure authorizers and state policymakers to
adopt best practices for authorizers.
43
One consequence of these efforts have been new
policies that establish guidelines for charter authorizing and renewal, automatic closure
policies for charter schools facing academic or financial mismanagement, and efforts to
strengthen state oversight of authorizers. In states like Ohio and Michigan, whose large
charter sectors are not as high performing as counterparts elsewhere, legislation
tightening rules on authorizers has support from both Republicans and Democrats.
44
While the increased focus on quality authorizing has improved the quality of the
charter sector nationwide, unintended consequences may serve to limit innovation in the
sector moving forward.
45
One factor is raising barriers to entry for new operators.
Applications for charters are increasingly lengthy, a trend that no doubt favors large,
established charter management organizations to the detriment of smaller, community-
based non-profits.
46
Another is providing disincentives for risk-taking and
experimentation, a key motivation for establishing charters.
47
According to 2014 data
from the Center on Education Reform, the most popular educational approach amongst
surveyed charters was college preparatory (30 percent), a 17 percent increase compared
to similar data reported in 2002. Technology-based approaches were used by a small
minority of surveyed charters (6% reported using blended learning and 2% were fully
virtual).
48
These trends suggest that while charter schools provide educators with much
more flexibility to innovate in school organization, curriculum, and talent management,
they also face regulatory pressures that constrain their actions in unintended ways.
DRAFT: Do not cite without permission from the author.
18
Post-NCLB Accountability
In public education, test-based accountability is a regulatory reform that aims to shift the
focus from specifying what schools do to instead making schools accountable for what
they achieve. In theory, the shift in focus from inputs to outputs should enable
entrepreneurship by providing schools and those that support them with additional
flexibility and incentives to achieve desired aims. Yet, because the public objectives for
K-12 education are broad and multi-faceted, including such equivocal concepts as
“citizenship” and “college readiness,” test-based accountability has been hotly contested
and had unintended negative consequences. Even when implemented well, accountability
pressures can crowd out ideas and people who excel in areas that are not measured and
limit risk taking and experimentation for fear of failure.
The experiences of states with No Child Left Behind Act offers a case in point of
the unintended consequences associated with test-based accountability. Because NCLB
focused on raw proficiency levels, it provided an incredibly crude yardstick for judging
the effectiveness of different educational programs and resulted in a variety of perverse
consequences, including a weakening of state standards, narrowing of curriculum, and a
focus on “bubble kids” on the cusp of meeting proficiency.
49
The law also vastly over-
identified the number of failing schools, with nearly 50 percent of the nation’s public
schools failing to make AYP in the 2010-2011 school year.
50
Dissatisfaction with NCLB led to a series of programs and reforms that aimed to
improve accountability and provide the incentives and support needed to turnaround low
performing schools. The administration’s signature initiative came in 2009 when
Department of Education announced a new approach to dealing with the nation’s
DRAFT: Do not cite without permission from the author.
19
persistently lowest-achieving schools. The program used $3.5 billion from the American
Recovery and Reinvestment Act (ARRA) to expand the budget of Title I School
Improvement Grants (SIG) and make the award of funding competitive. The SIG
program offered state education agencies and districts additional flexibility for
identifying low-performing schools but made the funds contingent on implementing one
of four prescribed turnaround models, including closure and staff replacement.
The program generated important opportunities for entrepreneurs working in both
the public and private sectors. The influx of funding, which typically included
investments of up to $2 million per year per school for up to three years, enabled the
purchase of targeted supports and materials as well as provided opportunities to design
innovative school models featuring expanded learning time and greater personalization.
51
Schools were also typically granted additional flexibility through regulatory waivers and
freedom from typical staffing constraints.
Available research on how these funds were deployed suggests that private
support providers won a significant share of dollars. A Denver Post analysis found that
amongst states that tracked funds going to outside groups, the average was 25 percent of
awarded dollars. In Colorado, consultants won a 35 percent share of the $26.6 million
awarded to the state between 2010 and 2012, which went to purchase instructional
coaches for teachers, leadership coaches for principals, analysts to review data, and
professional development for school staff.
52
Evidence about the effectiveness of these providers is generally lacking. The
aforementioned review by the Denver Post found lackluster performance by the New
York City-based Global Partnership Schools, which took over six schools in Pueblo,
DRAFT: Do not cite without permission from the author.
20
Colorado (the company also operates SIG schools in Baltimore and Bridgeport,
Connecticut). A U.S. Government Accountability Office report found “inconsistent
review of contractors” and a general lack of accountability for results amongst districts,
schools, and contractors.
53
These findings generally echo those from the larger SIG
program: nearly as many schools exhibited gains as saw declines, despite the fact that
they received millions in federal funds.
54
These discouraging outcomes likely have their roots in several factors. One is that
states, districts, and schools were often not well positioned to oversee contractors or the
larger school improvement plan. Compliance offices in state education agencies and
school districts were developed to ensure grantees and contractors submitted the right
paperwork and followed other procedural requirements. They are not generally well
equipped to hold grantees and contractors accountable for performance. As a testament to
this fact, studies have documented the lack of oversight of the program, with few states
using student achievement data to make grant renewal decisions.
55
Indeed, a 2012
Department of Education audit found that many schools did not follow through with
planned efforts to expand learning time or hire new staff and neither the state nor district
had followed through to approve changes to their turnaround plan.
56
The lack of effective oversight was likely exacerbated by the speed with which
the program was launched and then concluded – schools had just three years to design
and implement their turnaround plan, including the expenditure of all awarded funds.
According to an Education Week series documenting schools’ experiences with the SIG
program, the time crunch seriously impeded the success of the program, leaving districts
DRAFT: Do not cite without permission from the author.
21
with little time to make the staffing changes required by the program’s approved
turnaround models.
A final factor was the lack of attention to the need for reforms to state and district
operating systems, which in many cases created barriers to engaging in effective
oversight, identifying internal and external supports for schools, and implementing and
sustaining different turnaround models. For example, expanding learning time was a key
component of the SIG program but many schools bumped into teacher collective
bargaining agreements that limited what they could do on this front.
These challenges hold important lessons for policymakers seeking to leverage
funds to stimulate entrepreneurship. For funding to be an effective shaper of
entrepreneurial effort, outcomes need to be clearly specified and overseen. In the case of
the SIG program, guidance was far more prescriptive on what schools should do and less
prescriptive on what they needed to achieve, flipping the conventional wisdom of
performance-based contracting, in which outcomes are clearly specified and means are
left to decision-makers who have the required skills and expertise.
POLICY AND THE FUTURE OF ENTREPRENEURSHIP
Compared to recent history, public education in the United States remains more open to
entrepreneurs than ever before. Education is more transparent and focused on results, due
in no small part to reforms like teacher evaluation, Common Core, and test-based
accountability. School districts no longer hold a monopoly on operating schools and
many cities and states, charter schools are a large and growing provider of public
education.
DRAFT: Do not cite without permission from the author.
22
But challenges remain. Education persists as a highly regulated enterprise that is
resistant to new sources of talent and ways of organizing schools. While some of these
regulations are important for protecting children and taxpayers, many are artifacts of
previous eras that persist due to the power of inertia and politics.
At the same time, the structures in place to oversee both public and private
ventures in education remain weak. State education agencies and districts often lack the
capacity to oversee grants and contracts in ways that will incentivize entrepreneurialism.
In the absence of good oversight, millions of public funds are spent with little to show for
it.
The movement towards performance-based regulation, including teacher
evaluation and test-based accountability, sought to create clear metrics for evaluating
quality and incentives to drive the actions of educators. In theory, these reforms provided
a basis for moving away from prescribing inputs to instead focusing on performance. Yet,
the changes to the reform landscape that have unfolded over the last decade have done
little to address the scope of compliance responsibilities laid upon administrators,
principals, and teachers or to bolster the capacity of the compliance office to move
towards performance-based oversight.
In the wake of the lessons emerging from the previous decade of reform, federal and
state policymakers can take a variety of concrete steps that greatly shape entrepreneurs
opportunities to innovate. Federal, state, and local policymakers looking to encourage
entrepreneurialism in public education ought to leverage their authority and unique
policymaking roles to:
DRAFT: Do not cite without permission from the author.
23
? Reform procurement processes: In public education, government is a huge
consumer of products and services in the private sector. This gives government
leverage to stimulate entrepreneurship through its purchasing power. Yet,
regulation of contracting and procurement create unnecessary barriers to entry and
limit the diffusion of innovative practices. As discussed by Tricia Maas and Robin
Lake, state and local policymakers can leverage their existing investments in
entrepreneurship by eliminating barriers that favor large firms and focusing
procurement systems on end-users (whether they are families, principals, or
teachers).
57
? Refashion the compliance office: While procurement processes keep private
sector organizations from contributing to public goods, the compliance office
often works against public sector employees seeking to try out new ideas or tweak
routines. While state and district officials can and should refashion the
compliance office by eliminating outdated regulatory requirements, these reforms
should be coupled with efforts to improve the capacity and skill of individuals
working within the compliance office.
58
Taking these steps will ensure that
compliance officers are willing to help educators interested in finding ways to
innovate within existing regulatory frameworks. At the same time, it is important
that efforts to reform the compliance office do not result in weakened agencies
that are incapable of holding grantees and contractors accountable for outcomes.
As revealed by the weaknesses in the SIG program, the solution to failures in the
public sector is not simply to channel funds into the private sector. Contracting
DRAFT: Do not cite without permission from the author.
24
and grant-making is difficult work and requires investments in capacity building
to ensure desired outcomes are achieved.
? Invest in research: Federal and state policymakers devote little to education
research, especially when compared to investments in other areas. While the
National Institute for Health spent over $30 billion in health research in FY2014,
the Institute for Education Sciences (IES) invested just $600 million. This
difference is all the more remarkable given the considerable investments private
companies make in health research and development. Investing in research serves
two purposes. First, it can directly produce or contribute to innovations in
education. Second, investments in research can help schools and districts be smart
consumers of the many products, services, and improvement strategies that are
offered. One notable example of an effective federal effort to invest in research is
the Investing in Innovation (i3) fund. Originally created through the American
Reinvestment and Recovery Act, i3 is a competitive grant program managed by
the Department of Education that aims to help grantees develop and scale
innovative practices that address common challenges. While many grant programs
discourage partnerships with philanthropy and the private sector, i3 aimed to
capitalize on collaborations across sectors. As Martin West discusses, i3 differed
from the other competitive grant programs launched through Race to the Top in
that it was much less prescriptive and more focused on evidence.
59
States looking
for evidence about what works in their own backyards could launch similar
programs to draw attention to and learn from innovation that’s already happening.
DRAFT: Do not cite without permission from the author.
25
? Encourage transparency in reporting student outcomes: Most states have invested
in longitudinal data systems that enable tracking of school performance over time
and by subgroup. Yet few have worked to disseminate this information in formats
that are easy to digest and understand. Federal policymakers should encourage
greater transparency by requiring states to report disaggregated student outcomes
in an easily digestible format. Transparency is a powerful, if underutilized, tool
for government to pursue public objectives without the heavy hand of regulation.
It addresses a key market failure by improving the information available to
families choosing among schools. And it can provide a basis for conversations
about what communities are not being well served by existing schools.
While these reforms are far less provocative than the ones that have reshaped the
policy landscape over the last decade, they could have tremendous impact on
entrepreneurship. Through a thoughtful mix “carrots, sticks, and sermons,” policymakers
can ensure taxpayers are protected, children benefit, and public education advances in the
next era.
DRAFT: Do not cite without permission from the author.
26
1
Anne Schneider and Helen Ingram, 1990, “Behavioral Assumptions of Policy Tools,” The Journal of
Politics 52(2): 510-529.
2
For a review of definitions, see Thomas A. Birkland, An Introduction to the Policy Process: Theories,
Concepts, and Models of Public Policy Making, (New York: M.E. Sharpe, 2011).
3
Entrepreneurship in this sense is not the same as innovation. Innovation is more disruptive;
entrepreneurship can disrupt but may also simply improve upon existing practice.
4
Patrick McGuinn, “The Policy Landscape of Educational Entrepreneurship,” in Frederick Hess, ed.,
Educational Entrepreneurship: Realities, Challenges, and Possibilities, (Cambridge: Harvard Education
Press, 2006).
5
Digital Promise and IDEO, Evolving Ed-Tech Procurement in School Districts (Washington, DC: Digital
Promise, 2013). See also Tricia Maas and Robin Lake, A Blueprint for Effective and Adaptable School
District Procurement (Seattle, WA: Center on Reinventing Public Education, 2015).
6
Jennifer Booher-Jennings, 2005. “Below the Bubble: “Educational Triage” and the Texas Accountability
System,” American Education Research Journal 42(2): 231-268.
7
In a posthumous biography, CEO Steve Jobs labeled the textbook industry “ripe for destruction.” Quoted
in Steven R. Strahler, “Textbook case of a dying biz,” Chicago Business, March 3, 2012.
8
Strahler, March 3, 2012.
9
Sarah Garland, “Common Core standards shake up the education business,” Hechinger Report October
15. 2013.
10
Robert Pondiscio, “Common Core’s first breakout hit?” Education Next June 10, 2015.
11
Diane Stark Rentner and Nancy Kober, Common Core State Standards in 2014: Curriculum and
Professional Development at the District Level (Washington, DC: Center for Education Policy, 2014).
12
Ibid.
13
Garland October 15, 2013.
14
Ibid.
15
Sean Cavanagh, “Common-Common Core Testing Contracts Favor Big Vendors,” Education Week
September 30, 2014.
16
Sean Cavanagh, “Amplify Insight Wins Contract From Common-Core Testing Consortium,” Education
Week March 14, 2013.
17
Catherine Gewertz, “A Map of States’ 2015 Testing Plans: The Dust Has Finally Settled,” Education
Week February 4, 2015.
18
Frederick M. Hess and Michael Q. McShane, Common Core Meets Education Reform: What It All
Means for Politics, Policy, and the Future of Schooling (Cambridge, MA: Harvard Education Press, 2013).
19
Brian A. Jacob, 2005, “Accountability, Incentives, and Behavior: The Impact of High-Stakes Testing in
the Chicago Public Schools,” Journal of Public Economics 89(5-6): 761-796.
20
Daniel M. Koretz, Robert L. Linn, Stephen B. Dunbar, and Lorrie A. Shepard, “The Effects of High
Stakes Testing on Achievement,” Paper presented at the Annual Meetings of the American Educational
Research Association (Chicago, IL, April 3-7, 1991).
21
Just 10 states (Alabama, California, Idaho, Iowa, Montana, Nebraska, New Hampshire, North Dakota,
Texas, and Vermont) have no formal policy requiring teacher evaluations to take student achievement into
account. See National Council on Teacher Quality, State of the States 2013, Connect the Dots: Using
Evaluations of Teacher Effectiveness to Inform Policy and Practice, (Washington, DC: NCTQ, 2014).
22
Center for Great Teachers and Leaders, American Institutes for Research, Databases on State Teacher
and Principal Evaluation Policies, “Measures of Teacher Performance (Observation).” Accessed June 6,
2015.
23
Frederick M. Hess and Michael Q. McShane, Teacher Quality 2.0: Toward a New Era of Education
Reform, (Cambridge, MA: Harvard Education Press, 2014).
24
TNTP, Reimagining Teaching In A Blended Classroom, (Washington, DC: TNTP, 2014).
25
Fordham Institute, “Traversing the Teacher Evaluation Terrain,” November 18, 2013. Washington, DC.
26
Maas and Lake 2015.
27
Jay Chambers et al. How Much Are Districts Spending to Implement Teacher Evaluation Systems? Case
Studies of Hillsborough County Public Schools, Memphis City Schools, and Pittsburg Public Schools.
(Washington, DC: RAND and American Institutes for Research, 2013).
28
Sarah Garland, “Companies, nonprofits making millions off teacher effectiveness push,” Hechinger
Report October 25, 2011.
DRAFT: Do not cite without permission from the author.
27
29
Ibid.
30
Ibid.
31
National Council on Teacher Quality, Teacher Preparation Program Student Performance Data Models:
Six Core Design Principles, (Washington, DC: NCTQ, 2013).
32
National Alliance for Public Charter Schools, Estimated Number of Public Charter Schools and Students,
2014-2015, (Washington, DC: NAPCS, 2014). Accessed February 12, 2015:
http://www.publiccharters.org/wp-content/uploads/2015/02/open_closed_FINAL.pdf.
33
National Alliance for Public Charter Schools, A Growing Movement: America’s Largest Charter School
Communities (Washington, DC: NAPCS, 2013). Accessed February 12, 2015:
http://www.publiccharters.org/wp-content/uploads/2014/01/2013-Market-Share-Report-
Report_20131210T133315.pdf.
34
See, for example, Nelson Smith, The Louisiana Recovery School District: Lessons for the Buckeye State,
(Washington, D.C.: The Thomas B. Fordham Institute, 2012). See also Robin Baker, Kellly Hupfeld and
Pasul Teske, Turnarounds in Colorado: Partnering for Innovative Reform in a Local Control State,
(Denver: Buchner Institute of Government, University of Colorado Denver, 2013).
35
The Public Charter Schools Dashboard, National Alliance for Public Charter Schools, 2009-2010.
Accessed February 12, 2015: http://dashboard.publiccharters.org/dashboard/policy/page/cap/year/2010
36
National Association of Charter School Authorizers, The State of Charter School Authorizing: A Report
on NACSA’s Authorizer Survey, (Washington, DC: NACSA, 2013).
37
Meagan Batdorff, Larry Maloney, Jay F. May, Sheree T. Speakman, Patrick J. Wolf, and Albert Cheng,
Charter School Funding: Inequity Expands, (Fayetteville, AR: School Choice Demonstration Project,
Department of Education Reform, University of Arkansas, 2014).
38
Charter School Facilities Initiative, Initial Findings From Ten States (2013), Accessed February 15,
2015: http://www.facilitiesinitiative.org/media/3080/csfinationalsummary-fnl_april2013_.pdf.
39
Office of Innovation and Improvement, U.S. Department of Education, “Charter Schools Program,”
Accessed February 16, 2015: https://www2.ed.gov/about/offices/list/oii/csp/index.html?exp=7.
40
Ariana Prothero, “Obama’s Budget Aims to Boost Charter School Funding,” Education Week, February
2, 2015. Accessed February 15, 2015:
http://blogs.edweek.org/edweek/charterschoice/2015/02/obamas_budget_proposes_boosts_charter_school_
funding.html.
41
Education Commission of the States, “Charter Schools – What Rules Are Waived For Charter Schools?”
(Washington, DC: ECS, 2014), Accessed February 16, 2015:
http://ecs.force.com/mbdata/mbquestNB2?rep=CS1419.
42
National Alliance for Public Charter Schools, “Measuring Up: Automatic Exemption From Many State
and District Laws and Regulation,” Accessed February 16, 2015: http://www.publiccharters.org/law-
database/automatic-exemptions-state-district-laws-regulations/.
43
National Association for Charter School Authorizers, “One Million Lives in Action,” Accessed February
16, 2015: http://www.qualitycharters.org/one-million-lives/one-million-lives-in-action.html.
44
For Ohio, see Catherine Candisky and Jim Siegel, “GOP plan would increase accountability for Ohio
charter schools,” The Columbus Dispatch January 29, 2015. For Michigan see Kyle Feldscher, “Democrats
Announce Charter School Reforms That Would Increase Transparency,” MLive.com October 21, 2014,
Accessed February 17, 2015: http://www.mlive.com/lansing-
news/index.ssf/2014/10/democrats_announce_proposed_ch.html.
45
See for example Center for Research on Education Outcomes, National Charter School Study, (Stanford,
CA: CREDO, 2013).
46
Michael Q. McShane, Jenn Hatfield, and Elizabeth English, The Paperwork Pile-Up: Measuring the
Burden of Charter School Applications, (Washington, DC: American Enterprise Institute, 2015).
47
Some critics allege that the laser-like focus on quality in New Orleans has led to uniformity in the sector.
See Cowen Institute, The State of Public Education in New Orleans (New Orleans, LA: Tulane University,
2014).
48
Ted Regarber and Alison Consoletti Zgainer (eds.), The Essential Guide to Charter School Operations:
Survey of America’s Charter Schools, (Washington, DC: Center for Education Policy, 2014).
49
Jennifer Booher-Jennings, 2005. “Below the Bubble: “Educational Triage” and the Texas Accountability
System,” American Education Research Journal 42(2): 231-268.
50
Center for Education Policy, States’ Perspectives on Waivers: Relief from NCLB, Concern About Long-
term Solutions, (Washington, DC: Center on Education Policy, 2013).
DRAFT: Do not cite without permission from the author.
28
51
Jennifer Brown, “Cost doesn’t spell success for Colorado schools using consultants to improve
achievement,” Denver Post February 19, 2012.
52
Ibid.
53
Government Accountability Office, School Improvement Grants: Education Should Take Additional
Steps to Enhance Accountability for Schools and Contractors, (Washington, DC: GAO, 2012).
54
Alyson Klein, “School Improvement Grant Program Gets Mixed Grades in Ed. Dept. Analysis,”
Education Week November 21, 2013.
55
GAO 2012.
56
Office of School Turnaround Monitoring, Department of Education, accessed December 15, 2012,
http://www2.ed.gov/programs/sif/monitoring/index.html.
57
Tricia Maas and Robin Lake, A Blueprint for Effective and Adaptable School District Procurement,
(Seattle, WA: Center on Reinventing Public Education, 2015).
58
Frederick M. Hess, Cage-Busting Leadership, (Cambridge, MA: Harvard Education Press).
59
Martin R. West, Preserving the Federal Role in Encouraging and Evaluating Education Innovation,
(Washington, DC: Brookings Institution, 2015).
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