The private secondary education market in Russia currently serves only a small portion of the student population, despite the fact that demand far exceeds supply. However, several factors are limiting the expansion of this market, preventing it from growing as rapidly as potential demand would suggest. The key question is whether the education sector can identify and implement solutions to overcome these barriers and unlock further growth.
So, how many students attend private schools? A study by the Center for Continuous Education Economics at the Institute of Applied Economic Research, part of the Russian Presidential Academy of National Economy and Public Administration (RANEPA), estimates that just over 200,000 students – around 1.14% of the total number of secondary school students – attended private schools in 2023. The Higher School of Economics reports that there are currently about 900 private schools in Russia. Maxim Natapov, founder of the ONE! International School project, points out that Russia has one of the lowest levels of private education development. Interestingly, this low enrollment persists despite a widespread belief that private education offers a higher quality of schooling.
The reason is straightforward: like any market-driven entity, private schools focus on meeting the needs of their clients, in this case, children and parents. According to the analytical report Private Schools in Russia: Status, Trends, and Development Prospects by the Higher School of Economics, the key distinguishing feature of private educational institutions is their customer-centric approach, striving to meet parents’ expectations for high-quality education. A survey of private school directors by the Association of Non-Commercial Educational Organizations (AsNOOR) revealed that school leaders believe teachers in private schools should be more attentive to parents’ opinions and regularly provide updates to them.
Private schools are expected to offer a personalized approach to students, better learning environments, and more in-depth instruction in key academic subjects. Irek Allayarov, managing partner of the Rybakov PlaySchool network, highlights the significant public demand for high-quality education.
Meanwhile, Sergey Kosaretsky, Director of the Center for General and Supplementary Education at the Higher School of Economics, notes that in Moscow – where there are many strong public schools – the private sector’s advantages often lie in more intensive foreign language instruction and, in some cases, preparation for admission to international universities.
Oleg Smolin, First Deputy Chairman of the State Duma Committee on Education and Science, believes that private schools are more open to educational innovations due to being less bureaucratic than public schools. Alexey Tishchenko, a lead researcher at the Center for Continuous Education Economics at IPEI RANEPA, shares this view, noting that private schools often employ personalized and innovative teaching methods. He adds that private schools are less impacted by the trend toward standardization seen in the public sector. Maxim Natapov highlights the strengths of top private schools, including their ability to effectively balance the development of hard and soft skills, foster a broad worldview, and maintain a zero-tolerance policy on bullying. The question remains: how does this positive reputation influence the growth of the private education sector?
According to RANEPA, the number of students attending private schools in Russia nearly doubled between 2016 and 2023. Researchers highlight Moscow, St. Petersburg, Tatarstan, the Krasnodar Territory, Dagestan, Chechnya, and the Jewish Autonomous Region as areas experiencing particularly rapid growth in this sector. A survey by the Just Learn portal found that the revenue of private schools in St. Petersburg increased from 2.9 billion rubles to 4.7 billion rubles between 2019 and 2022.
And yet, according to Maxim Natapov, the demand is still much greater than supply despite the seemingly high growth rate, with the current enrollment competition at the ONE! International School institutions averaging 10-12 applicants per seat.
“With a lack of competition in this market, we see a massive shortage of good private schools, and this shortage leads to competition between institutions,” the expert notes.
As to why supply is lagging behind demand, a major specific problem of the educational business is caused by difficulties that a private school experiences when gaining clients if it has no brand and reputation; building the latter is a time-consuming process.
“Aspiring educational entrepreneurs have to go through a challenging period of developing awareness, standards, technologies and reputation,” Maxim Natapov says. “Just like in any business, up to 90% of educational startups fail to survive this initial development period. We see plenty of schools and kindergartens shutting down. If you start operating independently under your own brand, building a reputation will require between 5 and 10 years. Meanwhile, with rapid technological advancement, the project may simply prove to be lacking enough resources for building effective management as well as for testing new technologies and achieving impressive results in the educational sector,” the expert notes.
One of the solutions to the issue involves franchise. According to head of the Franshiza.ru catalog Anna Rozhdestvenskaya, child education franchises have been consistently among the most popular in Russia’s market over the past five years. This trend is due to a high demand as well as private schools serving not solely as a target for investment but also a niche for self-employment: people with a teaching degree or organizational skills can invest their money and labor in a private school.
Although we see more preschool franchise businesses, along with various courses and clubs, there are also franchises of fully operational schools as well, such as Smart School, Quality of Knowledge, ONE! International School, and Maximum. They offer a ready-made educational course, teaching methods, organizational consulting, and sometimes, as is the case with the ONE! project, unique digital tools that help organize educational process through the use of generative AI based video analytics, along with advanced library of technologies that utilize a digital analysis module.
A well-developed franchise could partially solve other market problems, such as a shortage of qualified teaching staff and premises. The franchise of the most advanced educational projects involves access to digital tools that allow for greater teacher productivity and better time management, and, if necessary, help organize distance learning.
“I would recommend that those entering the market use an acknowledged technology and brand, which would save them time and money while minimizing the risks of operating in this socially significant sector,” Maxim Natapov emphasizes.
In order to handle the shortage of available on-campus free space, private schools could sometimes abandon the concept of a single campus to have classes in differently located premises, which requires regulatory compliance.
As private education evolves, we will inevitably see greater competition for best teachers between the private and public institutions. Hopefully, this will contribute to the advanced development and improvement of the teachers’ financial wellbeing, which is an essential outcome for all of us.