The third sector and innovation: competitive strategies, incentives, and impediments to change

Abstract

Purpose: Much of the justification for third sector involvement in education advances from the notion that attributes from the business and non-profit fields could benefit state-run public schools. This analysis explores this issue by examining the theoretical underpinnings and expectations for third sector participation in public education systems, particularly with respect to educational innovations and improvements, and the structural opportunities, incentives and impediments for such innovation. Design: The question emerges regarding the extent to which third sector participation shapes the rate, nature, and types of innovations in education as schools interact in response to competitive pressures. In this conceptual analysis of the role of the third sector in fostering innovation, we examine the political-economic features and structures of the sector, with reference to the empirical record on the US sector that was specifically positioned to enhance the innovative capacity of publicly funded education. Findings: The analysis indicates that it is not at all clear that educational innovations are more prevalent in or because of the third sector, nor that they are commonly shared as was intended by reformers. Moreover, it appears that schools often respond to competitive incentives in ways not anticipated by policymakers, such as school marketing rather than instructional improvement, as well as in ways which may be detrimental to goals set out for public education, such as social sorting. In fact, instead of the third sector simply developing or incentivizing innovations, we note evidence that this sector has adopted innovations developed in the state sector. Implications: The analysis suggest that a third sector based more on a professional as opposed to a competitive model may better facilitate the development of innovative capacity in education.