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THE FUTURE OF PRIVATE EDUCATION IN SWEDEN BY A D R I A N B O S T R O M A N D C A R L M I C H A E L T I D E B AC K (S TO C K H O L M S C H O O L O F EC O N O M I C S ’ 1 1 )

S

weden’s 2010 general election

enrolled.

other

of education in Sweden. In their view,

produced a historic outcome:

industries, independent school groups

as financial buyers aim to maximize

the

Alliance

offer very predictable forms of income,

profits, they have an incentive in the

was the fi rst non-Social Democratic

making them a very desirable target for

shorter term to minimize the amount of

government

in

private equity firms who are typically

teachers per student and maximize the

Swedes

highly dependent on projects with

number of students per classroom. For

seem to approve of the coalition’s

stable cash flow streams. Today, with

example, some independent school

attempts to cut income taxes and

one exception, all privatized schools

groups boast an educational system

Swedish

centre-right to

modern

be

reelected

history.

In

comparison

to

state-heavy

with a focus on students working on

social welfare system. For example,

projects in their spare-time, reducing

the government saw through the

the

privatization

Significant synergies arise from a larger

liberalize

Sweden’s

of

the

educational

need

for

teacher

system at a faster rate than any

organization

other European country. In the past

work can be streamlined and facilities

fi ve years, the amount of students

can be shared across schools. Today,

attending independent schools has

the

more than doubled. The system has

equity-owned

produced a plethora of heavily niched

groups

schools

three in

where

assistance.

most

administrative

dominant

independent

Sweden

have

private school acquired

everything

several competitors in the field, and

from sports to computer sciences

are expected to further consolidate the

or religious teachings and has, as

industry. This development could serve

far as students’ freedom of choice is

to undermine the incentives of owners

concerned, been a success. Britain’s

to focus on the quality of education, as

specializing

pre-election

debate

in

on

it limits students’ possibilities to exit

education

less well-managed schools.

saw the Tories drawing heavily upon

with a compound annual growth rate

the Swedish experience of education

(CAGR) over 10% and an EBITDA-

The debate about whether to

reform. However, the Swedish debate

margin above 12% are private equity-

privatize educational systems or not

has shifted away from whether free

owned. Some argue that these owners

has been extensive in scope and

schools provide adequate education

have strong incentives to establish an

diff erences in opinions. The success

toward the ownership structures that

efficient and competitive educational

of this endeavor is key to Sweden’s

are emerging after more than 15 years

system within Sweden as schools need

move toward a more liberal society

of relatively lax regulation.

to be well run in order to attract students

and so it is in the interest of all parties

Revenues for independent school

- their only form of income. Others

that reform is not undermined by

groups in the region are paid by local

point to the fact that, in the longer

destructive short-term interests. iBR

authorities and consist of a fixed

term, the monetization of students is

monetary contribution per student

likely to significantly reduce the quality

FA L L 2 0 1 0

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I N T E R N AT I O N A L B U S I N E S S R E V I E W

29

11/27/2010 3:13:10 PM

Profile for Daniel Hellwig

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

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