Putting Your Billions Where Your Priorities Are

A recent weekend Wall Street Journal featured an essay from Amanda Ripley's new book, "The Smartest Kids in the World -- and How They Got That Way" (2013). Some of the world's smartest kids are trained in South Korea's hagwans-- think of them as tutoring labs on steroids. The WSJ story featured a rather satisfied looking Kim Ki-Hoon, "a rock-star" teaching entrepreneur, called the "Four-Million Dollar Teacher" because of his hagwan business revenue. I really don't have salary-envy. I give him credit for successfully and profitably creating an education business model that works. What worried me in the Ripley essay was the resulting comparison between South Korea and the US.

"In 2012, (Korean) parents spent more than $17-billion on (online hagwan) services. This is more than the $15-billion spent by Americans on video games that year, according to the NPD Group, a research firm."

Gulp. OK, let's try to put this in perspective. Granted American parents may be putting in a lot of time and dollars in their child's education which is not included in this statistic, granted putting money into an effort does not always guarantee success, granted out children have more interests than just school, granted South Korean students many also be buying video games (though I'm not sure when they are going to play them since they have long, long school days in addition to night and weekend hagwan duties), granted Kim Ki-Hoon's hagwans may be a little pricey and each unit of hagwan is more expensive than a single Call to Duty purchase. Granted, granted, granted.

Still. It's a basic concept of economics that when given a free choice, consumers spend their (usually) limited budget on those things that are most important to them. In South Korea, parent's choose their child's education: a $17-billion investment by those parents is hard to ignore. Those parents obviously feel that putting that kind of investment into a generation's education is worth it. So far, according to Ripley, the effort seems to be working:

"Thanks in part to such tutoring services, South Korea has dramatically improved its education system over the past several decades and now routinely outperforms the U.S. Sixty years ago, most South Koreans were illiterate; today, South Korean 15-year-olds rank No. 2 in the work in reading, behind Shanghai. The country now has a 93% high school graduation rate, compared with 77% in the U.S."

I could make some smart comment about spending our billions on high-tech athletic fields rather than in the classroom, but I don't have the heart. This link takes you to the rest of the essay (it's a short read) or buy the book, so, if you are interested, you can read up on where some of the smartest kids is in the world are -- and the parents who helped them along the way.

http://online.wsj.com/article/SB10001424127887324635904578639780253571520.html?mod=e2tw