The Covid-19 pandemic caused overall foreign direct investment (FDI) project numbers to decline by 17.4% in 2020, when compared with 2019 figures. Education has been among the sectors to experience a dip in FDI in 2020 as school closures and lockdowns have negatively affected the sector.

According to our FDI Projects Database, greenfield education FDI projects recorded a 33% decline in 2020, the year the pandemic was declared, when compared with figures from 2019. More specifically, greenfield education FDI projects totalled 143 in 2019 but dropped to 95 in 2020.

Out of the 238 projects tracked over this two-year period, 92% were new projects and the rest were expansions.

What are the leading destinations for education FDI?

Asia-Pacific and western Europe were the leading regions when it came to attracting FDI projects in education, recording 61 projects each over the two-year period. However, the data shows that western Europe attracted more projects than Asia-Pacific in 2019 but experienced a stronger drop in 2020.

North America and South America also experienced strong declines in 2020 compared with the previous year. The Middle East and North Africa was the only region to record a steady increase in education FDI over the two years.

The US received the highest number of projects on a country level, announced or opened, across 2019 and 2020 combined. However, India ranked as the leading investment destination for inbound education FDI in 2020, with the US leading in 2019.

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Out of the 22 projects that the US received over this two-year period, most of the investments came from Japan, Canada and the UK.

India attracted ten projects in 2020, up from six the year before. Out of these 16 projects, India saw most of its investments come from Taiwan and the US.

The United Arab Emirates also received 16 projects during this two-year period, with the majority of the investments coming from the UK, the US and India.

What are the top education FDI business functions?

Education FDI tended to focus on training operations and business and professional services in the 2019–20 period. Headquarters was the third-largest business function in terms of inbound projects.

Sales, administration and marketing was the only function to experienced a rise in 2020 when measured against 2019 figures.

The US was the leading destination for training operations, with 12 projects recorded in 2019–20, followed by the UK, France and Germany.

What are the top education FDI subsectors?

Higher education was the top subsector when it came to FDI projects in education in 2019 and 2020, with a total of 66 projects in the period, followed by service trade training with 55 projects.

However, the higher education subsector experienced a decline of 42.9% in 2020 when compared with projects invested in in 2019. All other subsectors saw declines in the number of projects over the period, apart from the primary and secondary education subsector, which experienced a 200% increase.

Pplingo's plans to expand its workforce in Jakarta, Indonesia, were among the key investments in the primary and secondary education subsector across 2019 and 2020. This will involve the Singapore-based online Chinese learning platform commonly known as LingoAce hiring more than 500 local employees, who will cater to 200,000 registered students in Indonesia.

Where are the leading education investors located?

Our analysis shows that the US was the leading source market for outbound education FDI, with companies from the country investing in 44 projects between 2019 and 2020, targeting greenfield operations in the UK, India and France more than any other countries. A total of six projects were created by US companies in the UK over the period, while five were created in India and France.

Despite the drop in projects due to the outbreak of the pandemic, the US has been the clear winner when it comes to FDI in education across 2019 and 2020, as it represents 18% of the FDI outflows and 9% of the FDI inflows during this period. As the post-Covid era begins, many sectors are expected to recover quickly, with FDI in education being one of them, as lockdowns are not as common across the world and schools have reopened.