Is the Japan English teaching market $700 million in size, or $7 billion?

I am surprised no one has ever stepped up to resolve this one.

With the GEOS bankruptcy in the news, all the facts and figures are coming out again. What has my head spinning are two different factoids coming out of Japan Times reporting. In one article, the reporter says:

According to the Ministry of Economy, Trade and Industry, the monthly number of students enrolled at foreign-language conversation schools plunged from 826,858 in February 2006 to 335,604 this year. The corresponding monthly sales figures for the industry over the same period fell from ¥17.2 billion to ¥5.7 billion.

In real (I mean U.S. dollar) figures, and annualized, this means a drop from about $2 billion to $700 million.

Yet today, another piece about GEOS has this statistic:

The language industry has been in decline for the past several years due to Japan’s economic malaise, the global financial crisis and the fallout from Nova’s bankruptcy.

According to Tokyo-based Yano Research Institute Ltd., sales in the industry fell from ¥826 billion in fiscal 2005 to ¥767 billion in fiscal 2008.

So, in more workable numbers, this is $8.26 billion in ’05 down to $7.67 billion in 2008, and using 100 yen to the dollar. That’s Yano.

So in one article, the industry is $700 million, and in another one, it’s ten times the size.

Which is it?

I am taking “foreign language industry” to mean the same as English instruction. Although obviously, that isn’t true.
But where’s the other nine-times-the-size of Eikaiwa industry out there? The missing planet Jupiter for which the Eikaiwa we all know about would be just one of the moons?

Adamu (Adam Richards) over at Mutant Frog helped me out a bit by linking the source for the METI figures, which I’ll talk about later. (He does another one of those quickie analyses like this one from last year, which I’ll also talk about.) But I don’t think any of the gang who blog over there, even the Dubai-based lawyer I might have had lunch with in Yoyogi last year(!), have picked up on this 10-times difference thing.

[more later]

11 thoughts on “Is the Japan English teaching market $700 million in size, or $7 billion?

  1. Yano only makes their reports available for something like $1500 a pop, which makes it frustratingly hard to check their methods. At least with METI, they explain they hire a polling company to survey firms covering “60-70% of industry revenue” with an 80% response rate and presumably estimate from there. Just a guess, but maybe Yano tries to get a more complete picture of smaller players or maybe even the ALT market, while METI seems to just measure the large chains.

    Looking forward to your reaction.

    1. On my link to Yano above (“That’s Yano”), you’ll notice that Yano breaks it down some. I think they are including the ALT dispatchers in there, and a few more things. When I get more time, I am going to try to figure out what additional areas are included.

      But if Yano has a more complete tally, then Eikaiwa is just a pimple on the ass.

  2. I am having lots of problems trying to find where the data in the Japan Times article is coming from on the METI website but I have a sneaking suspicion it might be a translation error in getting from at 10,000 based digit number system (Japanese) into a 1,000s based digit number system (English.)

    The closest I could come up with is found here:

    The excel link under category 27 gives data for the Foreign language industry. This is info for Heisei 17 which is 2005. That ought to be close enough to 2006 to have similar numbers.

    On tab I-6 of the excel sheet, it claims that the number of enrolled students was 1,096,952 (close to the 2006 number quoted) and that the yearly sales figure for the entire industry was 192,785 MILLION Yen. Moving some decimal places around, that works out to be ~193 BILLION Yen. That is a power of 10 off from the quoted 2006 figure in the article which makes me suspect someone screwed up the counting of OKU and treated it as 1 BILLION instead of 100 MILLION. Screws me up a lot as well.

    Of course, those numbers don’t jive with the Yano report so I don’t really know what to think.

    An actual link to the real data used in the article would help a lot.

    Oh and it looks like METI is trying to pick up the little guys as well as they have a breakdown of really small companies as well.

    1. Chuckers, I think the METI data is coming from the same link as Adamu provided on Mutant Frog. Yano is definitely including other things that METI isn’t caputuring in the series, and this is why Yano is ten times higher.

      I have the suspicion that Yano is actually capturing the “foreign language market”, and that the METI figures are used when people want to show the implosion within Eikaiwa as a subset.

      I have been thinking about this late today, and I wonder if this isn’t deliberately being done to screw with us. But I have to think about it a bit more.

      1. Looking closer, you are right. Yano is basically throwing in the kitchen sink into their “Language Business” numbers. On the link I provided, there is another link to the methodologies used by METI. They are ONLY including foreign language classroom study businesses. They specifically list things that should NOT be included such as: foreign language taught in regular schools, at religious institutions, at jukus, or out of someone’s spare room. They even included the questionnaire used.

        Based on what Yano is looking at (electronic dictionary makers, e-learning centers, study abroad programmes etc.) I think that the METI numbers do represent a closer representative of what is meant by an implosion of Eikaiwa (or other foreign language) businesses that most people think of when they bring to mind places like NOVA or Geos or whatever. A decrease in Canon Wordtank production is probably not going to show much of an implosion.

        1. From Yano’s:

          Total market of foreign language classes: 320,700,000,000 yen

          English teacher dispatching to kindergartens and nursing schools: 2,000,000,000 yen

          Language study materials: 193,100,000,000 yen

          Peripheral business: 251,400,000,000 yen

          Total without peripherals: 515,800,000,000 yen

          Grand total: 767,200,000,000 yen

          Footnote – really foreign languages: 9,850,000,000 yen (these would be languages that are foreign to both Japanese and English speakers, as a subset of the first figure above.)

  3. Sorry about the double posting. My company’s proxy has gone a bit weird. It lets me view your site but doesn’t let me post any more. Some times it will go through some times not. Please delete this post and one of the other ones.

  4. The bigger number takes into account the entire language learning industry. That includes everything from language schools to textbooks to self study listening packages like the one advertised by that young golfer to English language proficiency exams like STEP and TOEIC, and study abroad programmes. Page 3 of the Yano report breaks it down.

    Insert your own joke about squeezing pimples here.

    1. TKesq, I haven’t had a chance to look carefully at what Yano said, I but agree that Yano is definitely including more things. What fascinates me, though, is that the number is 10 times higher than “just Eikaiwa”. This really does mean that Eikaiwa is a pimple on the ass of foreign language instruction in Japan.

      Do I expect the Minister of Education to call a press conference and say, “Hey you people. Stop bitching about the Novas and the Geos-es! These chain Eikaiwas are a pimple on the ass of foreign language instruction in Great Japan!”? No.

      But it does say something when the framing and the context is put in terms of hardscrabble and unavoidable collapses. When, in fact, it is a pimple on the ass. O.K., at 10%, it must be quite a boil. But you see the point. Eikaiwa is nothing compared to other money being spent. And what this means is that all the talk of “sorry, we can’t do the pension, we can’t do the health care. Oops, don’t ask for any raises, we’re barely surviving!” is bullshit.

      It was all created by the government establishment to cheat English teachers who arrive here. Probably squeeze enough money out of young English teachers to pay for Futenma . . .

      I highly doubt that the other Yano money goes for non-service support and instructional material. I do believe that a large amount of it goes back into the pockets of native Japanese as “suppliers” of the foreign talent.

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