Carrots, Sticks, and Sermons: How Policy Shapes Educational Entrepreneurship

June 2015

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.

This paper was prepared for the American Education Institute's conference, The State of Entrepreneurship in K–12 Education. It will be included in a book edited by Rick Hess and Mike McShane, to be published by Harvard Education Press in 2016. Read the full paper.