The market for testing products and services is booming and could continue to surge over the next few years, according to industry analysts and company officials, who say that growth is being fueled by the shift toward common-core tests across states and the use of new classroom assessments designed to provide timely and precise feedback for teachers and students.
Demand for testing resources tends to be driven by major changes in state or federal policy affecting schools, and the current environment is reflective of that connection.
Changes in testing policy with nationwide implications are invariably “good for any provider of testing materials,” said Scott Marion, the associate director of the National Center for the Improvement of Educational Assessment, a Dover, N.H.-based nonprofit organization that consults with states on assessments. “You knew the common core was going to be a big change from what [we] had before.”
Mr. Marion also echoed a concern expressed by others familiar with the testing world: that many companies are exaggerating their products’ alignment to the common core and their ability to improve achievement.
A recent analysis suggests that revenue from testing in the United States will rise over time, driven by increased interest in formative and interim assessments, among other factors.
SOURCE: Outsell
Still, he predicted that demand for an array of assessment materials is likely to continue to grow “for the foreseeable future, as people figure out what [tests] they want.”
This new growth in the testing industry bears some similarities to past periods of expansion. The passage of the No Child Left Behind Act more than a decade ago presaged a wave of spending on assessments and tools connected to them, as states scrambled to develop high-stakes tests required by federal law and districts searched for ways to help students meet academic goals to avoid penalties.
The recent growth of the testing market does not compare to the wave of activity that played out then, a number of market insiders said, even though ongoing plans to create tests aligned to the Common Core State Standards have led many districts to purchase interim, formative, or other types of classroom-based assessments.
All but four states have adopted the common standards in English/language arts, and all but five have adopted the standards in math.
Formative-Assessment Needs
Gauging shifts in nationwide demand for testing materials is difficult, but a number of recent reports have offered a picture of where the market is now, and where it might be headed.
In an analysis released last year and completed for the Software and Information Industry Association, a major trade group, consultants John Richards and Leslie Stebbins surveyed vendors selling products to schools, then extrapolated those findings to a broader set of companies based on the composition of the market.
They estimated that the current market for technology-based testing and assessment products and services in fiscal 2011 was $1.6 billion. Preliminary results that are still being analyzed show the market grew by at least 20 percent for fiscal 2012, the most recent year that information was collected from companies, said Mr. Richards.
He said the findings and what he’s heard from companies—his survey provides those businesses with confidentiality—suggest to him that the growth will continue.
One of the biggest factors driving the growth, Mr. Richards said, is districts’ demand for formative-assessment tools, which allow teachers to measure student learning on the fly and tailor instruction to meet their needs. Other forms of assessment that are “embedded” in curriculum and other programs are helping companies, too, he said.
Testing and assessment providers “are quite happy with how things are going,” Mr. Richards said. The increase in the testing business is “not just in one company,” he said. “It’s pretty broad-based.”
Similarly, an analysis released last year by Outsell, a research and advisory company, estimated the total yearly size of the U.S. K-12 testing market to be $3.9 billion, and projected revenues would grow between 4 percent and 5 percent a year, reaching $4.5 billion by the end of 2014.
The authors say that forecast “rests largely on a short-term increase in demand for formative and interim assessment”—often defined as tests taken at various points during a semester or year, less often than formative assessments, to help gauge student progress and shape instruction.
By contrast, revenue from summative assessments—tests designed to measure what students have learned at the end of a course or an academic year—is likely to remain flat, Outsell projects, as states move away from giving individual assessments and band together to create tests aligned to the common-core standards.
A Spike in Business?
Currently, two main groups of states, the Smarter Balanced Assessment Consortium, and the Partnership for Assessment of Readiness for College and Careers, or PARCC, are leading that effort.
It’s hard to predict the effect the common-core assessments will have on state spending on testing, a number of testing officials said. One of the assumptions is that the market for state assessments will shrink as individual state tests give way to those used by large groups of states belonging to the PARCC and Smarter Balanced consortia.
But for now, testing companies are seeing a spike in state-level business because states are still using their own tests as the consortia work to get their tests in order. This essentially is creating two markets, said John Oswald, the vice president and general manager of K-12 student-assessment programs for the Educational Testing Service, the nonprofit developer of the SAT and other tests and services.
At the state level—where most of the ETS’ work is focused—Mr. Oswald said he did not see evidence of a recent surge in demand for testing, so much as a continuation of a strong market since No Child Left Behind was signed into law in 2002.
As the common-core assessments—due for rollout in the 2014-2015 school year—replace state tests, “there’s going to be less business, in general, for summative assessments,” Mr. Oswald said.
The more pronounced shift in the testing market has come in the demand for higher-quality assessments, the ETS official said, which include not only formative and interim assessments but also a variety of other classroom-based assessments designed to identify student academic weaknesses and collecting more-exact information about what students know and don’t know.
Shilpi Niyogi, the executive vice president for public affairs for Pearson, a major publisher and provider of testing and other education services based in London, agreed with Mr. Oswald’s interpretation of the market, saying districts and schools are choosing “next generation” assessments that pose deeper questions and churn out more practical information for educators.
“What we’re hearing from customers is that it’s not about more or less testing, it’s about better testing,” Ms. Niyogi said.
She did not think the overall testing market was particularly robust, but rather simply in recovery, along with school budgets, emerging from the depths of the recent recession.
“I don’t think the market is booming,” she added, “so much as the market is changing.”
‘More Savvy Market’
District officials’ demands for more-sophisticated tests pose challenges for testing companies and often require heavy financial commitments, said Paul Weeks, the vice president for customer engagement for ACT, an Iowa City, Iowa-based testing organization.
Schools want high-quality tests, but they also want short ones, he said. They want to go beyond asking students multiple-choice questions, although doing so costs companies money, and the questions are harder to design, Mr. Weeks said.
“We’re being challenged to meet market needs,” he said. “We have a more savvy market.”
Other factors are driving districts’ interest in improved tests.
Many states and districts have approved policies tying teachers’ and administrators’ evaluations to students’ academic progress, as measured in part by state tests—policies supported by the Obama administration through its Race to the Top program and the No Child Left Behind waivers it has granted to states.
But that added measure means educators do not want to wait until the end of the year to find out if their students have not grasped a concept. They want that information, which can be provided by formative and interim assessments, up front so they can make instructional adjustments.
Overall, testing companies’ biggest market will come not at the state level, but in the nation’s roughly 14,000 school districts, said Mr. Marion of the National Center for the Improvement of Educational Assessment.
And many vendors are already flooding districts with products in testing and other areas that they claim, somewhat dubiously, will boost students’ scores on the common-core tests, Mr. Marion said. Too many of those companies are promising “quick and easy solutions,” he said, without any evidence that their products will help.
One reason districts crave assessment to help them gauge student progress is the widespread fear that test scores will plummet when students stop taking their current state assessments and move to the common-core exams—which in many states are expected to set a higher bar for performance, Mr. Marion said.
In many districts, the message has been that “the kids are doing great,” he said. “The common core will have a bit of shock when the results come in.”
Greg Schultz, the assistant superintendent for student learning in the Bullitt County school district, in Kentucky, sees at least two or three offers a day come in from testing companies and other vendors, arriving via email.
Evaluating Quality
When it comes to purchasing new products for testing and other areas, Mr. Schultz said his credo is “buyer beware.”
“Everything looks really good in a sales presentation,” he said. “If you’re buying just to be buying, you might make a huge mistake.”
He has confidence in the strategy his 13,000-student district is using now. For the past few years, it has used an interim-assessment tool called the Measures of Academic Progress, developed by the Northwest Evaluation Association, a Portland, Ore.-based nonprofit educational provider.
The district combines that tool with another program that provides remedial help to struggling students and builds their skills. The Bullitt County schools’ biggest focus in preparing for the common-core tests has probably been in professional development, where it has built in more time for teachers to share effective practices, among other steps.
The goal of that work is to take the information provided by formative and other tests, and interpret it to help students. Mr. Schultz likened the usefulness of tests to that of a thermometer that reveals a fever: “You’re hot, but you’ve got to figure out why you’re hot.”
