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Business Involvement in Education

A Nation at Risk, Partnerships With Business, Standards-Based Reform, Federal Education Policy

The focus of this entry is on business involvement in influencing state and federal elementary and secondary education policy since 1983, the year the landmark report, A Nation at Risk: The Imperative for Educational Reform, was released.

A Nation at Risk

No education report in U.S. history has galvanized national attention like A Nation at Risk did when banner headlines in newspapers across the country declared that "a rising tide of mediocrity" threatened not only U.S. schools, but also its democratic institutions. In thirty-six short pages, it starkly declared, "If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war." The words rang true for many business leaders who not only were facing an economic downturn, but also growing international competition. They recognized that the U.S. economy demanded a fundamental transition to an emerging information age that relies on a workforce with ever increasing skills and knowledge.

After the release of the report, governors and other state leaders established blue ribbon commissions in many states that included prominent business and civic leaders. The 1984 Perot Commission in Texas is one of the best-known examples of post-Nation at Risk models for business involvement in state education policy. However, in most states, these business-led commissions were short-lived; they disbanded after their recommendations were enacted into law.

Partnerships With Business

Through the 1980s, school-business partnerships formed the core of business involvement in education. By the end of the decade, many business leaders were expressing dissatisfaction with these local partnerships as little more than "feel good" projects that had few measurable or lasting results.

There was a marked shift in business involvement beginning in 1989 and continuing into the early twenty-first century. In 1989 President George Bush met with the chief executive officers of the Business Roundtable (BRT), an organization of chief executive officers from leading American companies that focuses on public policy issues that affect the economy. The president challenged the business leaders to commit personal time and company resources to improving elementary and secondary education in the United States. That same year, the president and state governors met in Charlottesville, Virginia, for the first National Education Summit and agreed to set National Education Goals to be achieved by the year 2000.

The Business Roundtable accepted the president's challenge. CEOs agreed that schools were preparing too few students to meet world standards in core academic subjects, and too many students were leaving school unprepared for productive work and effective citizenship. After considering different leverage points for change and assessing where CEOs of large U.S. corporations could most effectively improve U.S. education performance, members of the BRT decided to concentrate their efforts at the state level. Under the U.S. Constitution, states have primary responsibility for education.

State policy. In 1990 the CEOs made a ten-year commitment and adopted a state policy agenda to improve student achievement that was undergirded by the fundamental belief–revolutionary at the time–that all children can and must learn at higher levels. The changing economy demanded that all students obtain skills and knowledge once required only by those at the top. The policy agenda, refined over the decade, includes nine essential components of a successful education system: standards, assessments, accountability, professional development, school autonomy, technology, learning readiness, parent involvement, and safety and discipline. It was viewed as a coherent whole, with each of the essential elements aligned to high standards that articulate what all students need to know and be able to do to succeed in school, at work, and in life. It was not an a la carte menu.

State coalitions. In addition to adopting a state policy agenda, the BRT also asked business leaders to promote education reform in at least one state where the company had a significant employee presence. Companies were asked to join or create a state coalition to advocate these changes in the state capitol. The basic strategy was to encourage companies to shift from the "adopt-a-school" approach to an "adopt-a-state" model of partnership. The organizational structures and membership of these coalitions differ, and a variety of models have proven to be effective, depending on state-specific situations. In some states, CEOs turned to the state business roundtable of business council. In other states, CEOs created a new state business organization, an umbrella group of business organizations and companies, or a business–education coalition that includes business and education leaders. Some of these coalitions also include government and civic leaders. A few states have several state coalitions, each with a unique niche for business involvement. Today, forty-three states have state-level coalitions that provide a vehicle for business leaders to influence state education policy.

Standards-Based Reform

Throughout the 1990s this state policy agenda, which became known as standards-based reform, emerged as the leading reform strategy, with a primary focus on standards, assessment, and accountability. Other national business groups such as the National Alliance of Business and the Committee for Economic Development issued publications and policy statements that embraced this approach. It was complemented by a U.S. Department of Labor Commission, the Secretary's Commission on Achieving Necessary Skills (SCANS), that detailed the core competencies required in the modern workplace. Business leaders were instrumental in sustaining this agenda as elected and appointed officials turned over in each state. With President Clinton's election in 1992, the business community backed two federal initiatives that were passed by Congress–Goals 2000: The Educate America Act, and the School to Work Opportunities Act–and one that failed to win support–the call for a voluntary national test.

At the state level, the standards movement hit a rocky period in the mid-1990s as opposition to outcomes-based education and national standards spread like wildfire across the country, largely fueled by conservative groups, but also striking a nerve with many parents who were concerned that many states' standards were "fuzzy," value-laden, and not measurable. Concerned that this opposition might sink the standards movement, governors and CEOs joined together in 1996 to create Achieve, an independent, bipartisan, nonprofit organization to help states benchmark standards and assessment systems, to build partnerships for states to work together, and to serve as a clearinghouse on standards and school reform.

By the end of the 1990s it was clear that the business community's initial ten-year commitment was insufficient. Despite the fact that forty-nine states had developed and strengthened their standards in core academic subjects, and promising progress could be seen in some of the states that had benefited from strong business involvement, far too many students still were not proficient in reading and mathematics, according to the National Assessment of Educational Progress (NAEP). The business community would have to stay the course and remain involved as a permanent partner with educators and policymakers. The need for ongoing business involvement was reinforced by a study of two states that made significant gains on NAEP and other measures during the 1990s–North Carolina and Texas. In both states, researchers found that one of the key factors explaining the gains was the business community's role in developing and sustaining reform. In both states, the business community provided a stable, persistent, and long-term influence on the state's education reform agenda.

Federal Education Policy

With President George W. Bush's election in 2000, a new phase of business involvement emerged. He had seen firsthand the importance of a close working partnership with business leaders on education reform issues as governor of Texas. In January 2001 the president introduced a basic framework for reform, known as No Child Left Behind, and asked CEOs to work with him and the Congress to get it passed. Companies and business organizations formed a coalition, the Business Coalition for Excellence in Education (BCEE), and put together a sophisticated lobbying effort that contributed to passage of a strong bill with overwhelming bipartisan support in December 2001.

The business community recognizes that the federal role in education in the United States is limited, with the lion's share of the resources at the state and local levels. However, perhaps more than any other group concerned about public schools, the business community recognizes the national and international context in which education operates. National leadership is needed to address the disturbing achievement gaps between poor students and their more affluent peers, as well as between African-American and Hispanic students and white and Asian students. Business leaders frequently cite the continuing achievement gap between the United States and its international competitors in math and science. Particularly troubling was the finding from the 1996 Third International Mathematics and Science Study (TIMSS) that showed the performance of U.S. students compared to their international peers declines as students progress through school. It is hardly surprising that according to the 2002 results of an annual survey of employers and college professors conducted since 1998 by Public Agenda and Education Week, far too many high school graduates continue to be rated "poor" or "fair" on skills such as writing clearly, grammar and spelling, being organized and on time, and basic mathematics.

The No Child Left Behind Act of 2001 included principles for reform advocated by the business community based on experience in promoting higher student achievement at the state level. Business support for this federal legislation went far beyond any previous involvement on federal education issues. CEOs and national business organizations like the National Alliance of Business, National Association of Manufacturers, American Electronics Association, and The Business Roundtable were convinced that the time was right for federal legislation that linked resources and accountability. If properly implemented, it could help accelerate reforms at the state and local levels that were beginning to show results. In part because the legislation requires schools to disaggregate student achievement data by major student subgroups and holds schools accountable for achievement gains by each of these student groups, business leaders and civil rights organizations were among the most passionate advocates for the bill's passage.

Staying The Course

In 1950, 80 percent of all jobs were classified as "unskilled labor," but by 2000, 85 percent of all jobs were classified as "skilled labor." The twin forces of technology and globalization mean that an excellent K–12 education system for all students, the competitiveness of the U.S. workforce, the vibrancy of its communities, and the future of its democracy are connected in ways that have never been clearer. Since the publication of A Nation at Risk in 1983, the condition of the economy has fluctuated, causing some critics of business involvement in education to argue that business overstates the connection between the quality of education and the health of the economy. However, despite the ups and downs of the business cycle, there is compelling evidence that higher skilled workers have more opportunities to succeed in the changing workplace.

While other education interest groups may not always agree with the positions taken by the business community on education issues, business is recognized as an effective voice for better schools and respected by political leaders on both sides of the aisle. As governors and other state policymakers vie for companies to locate in their states, they know that the quality of education in the state is a competitive advantage. Business is viewed as a credible advocate for education reform policies because business has an enlightened self-interest in strengthening public education in the United States. Business leaders are a force to be reckoned with in state capitols, and business leaders have helped states stay the course on standards-based reform. After working hard to pass the No Child Left Behind Act of 2001, the business community announced its intention to work closely with states to implement the federal legislation. All evidence points to continued involvement by the business community in helping to shape education policy in the United States.


THE BUSINESS ROUNDTABLE. 1995. Continuing Commitment: Essential Components of an Educational System. Washington, DC: The Business Roundtable.

THE BUSINESS ROUNDTABLE. 1999. Transforming Education Policy: Assessing 10 Years of Progress in the States. Washington, DC: The Business Roundtable.

FOSLER, R. SCOTT. 1990. The Business Role in State Education Reform. Washington, DC: The Business Roundtable.

GOLDBERG, MILTON, and TRAIMAN, SUSAN L. 001. "Why Business Backs Education Standards." In Brookings Papers on Education Policy, ed. Diane Ravitch. Washington, DC: Brookings Institution Press.

GRISSMER, DAVID, and FLANAGAN, ANN. 1998. Exploring Rapid Achievement Gains in North Carolina and Texas. Washington, DC: National Education Goals Panel.

HILL, PAUL T., and WARNER, KELLY E. 1994. A New Architecture for Education Reform. Washington, DC: The Business Roundtable.

KEARNS, DAVID T., and HARVEY, JAMES. 2000. A Legacy of Learning: Your Stake in Standards and New Kinds of Public Schools. Washington, DC: Brookings Institution Press.

NATIONAL COMMISSION ON EXCELLENCE IN EDUCATION. 1983. A Nation At Risk: The Imperative for Educational Reform. Washington, DC: U.S. Government Printing Office.

SMITH, NELSON. 1996. Standards Mean Business. Washington, DC: National Alliance of Business.

TIMPANE, P. MICHAEL, and MCNEILL, LAURIE MILLER. 1990. Business Impact on Education and Child Development Reform. Washington, DC: Committee for Economic Development.

U.S. DEPARTMENT OF LABOR. 1992. Learning a Living: A SCANS Report of America 2000. Report of the Secretary's Commission on Achieving Necessary Skills. Washington, DC: U.S. Department of Labor.

WADDOCK, SANDRA. 1994. Business and Education Reform: The Fourth Wave, Report Number 1091-94-RR. New York: The Conference Board, Inc.


NATIONAL ALLIANCE OF BUSINESS. "Business Coalition for Excellence in Education." <www.nab.com/bcee.htm>


Additional topics

Education - Free Encyclopedia Search EngineEducation Encyclopedia: AACSB International - Program to Septima Poinsette Clark (1898–1987)