SURREY’S initiative with Kings’ Manor School and the Department for Education and Employment’s “approved list” of companies to bid for failing local education authorities both point to an increasing role for the private sector in education.

Many suspect that this is an undesirable American phenomenon being imported into a reluctant United Kingdom. This is a complete misconception. I believe that it is in developing countries that we find the most advanced private - including for-profit - education companies.

Far from finding that the private sector in developing countries caters only for the elite, the research I carried out for my book The Global Education Industry, commissioned by the International Finance Corporation reveals an education sector which is large, expanding and innovative. In Moscow, where until recently private schooling was banned, the same proportion of students - about 7 per cent - attend private school as they do in the UK.

In Colombia and Cote d’Ivoire 40 and 57 per cent respectively of secondary pupils are in the private sector. Indonesia has a massive 94 per cent of private higher education students - with more than 1,000 private universities The sector also features companies which manage “chains” of schools and universities, sometimes on a franchise basis, able to benefit from economies of scale.

The largest of these, Objetivo UNIP is one of several competing chains in Brazil. It has more than 500,000 students - from kindergarten to university - on nearly 500 campuses. Educor, in South Africa, listed on the Johannesburg Stock Exchange, has over 300,000 students - from high school to professional and vocational students. NIIT in India, has 400,000 vocational and academic students, in India and 20 other countries, including the USA - and is shortly to be a listed company.

These companies overcome the objection that consumers suffer by allowing devious business people to take advantage of their ignorance. On the contrary, brand name works here as it does for other consumer services, reassuring parents and students that high quality is being offered and maintained.

Just as I know little about computers, but confidently purchased my lap-top aware that the need to maintain the brand name will keep Toshiba “on its toes”, so educational consumers attending an Objetivo School in Brazil or a DPS school in India are confident that strict quality control is in place to keep standards consistently high.

Not only is the private sector large, but it is also in places strikingly innovative. Many of the companies have research and development departments dedicated to state-of-the-art teaching and learning methods. They are also concerned with efficiency, given the scarcity of resources such as space, technology and teacher time. NIIT have developed an educational model which enables a centre with only 30 computers to accommodate 1,260 students per day!

But what about the worry that private education is inequitable?

* The IFC study reveals a vast range of private education opportunities, not just catering for the elite or even the middle classes, but providing opportunities often even affordable by peasants.

* Public education is not generally free, and when hidden costs are introduced, the differences between private and public costs are narrowed considerably.

* Public funding of education is also inequitable - a “middle class scam” as one social commentator put it, as relatively fewer low income children attend secondary and higher education institutions.

* The study also shows that private institutions serve to ameliorate gender equity, by catering for a greater proportion of female students than public schools.

* Many of the businesses studied are also aware of the importance of cross-subsidy, social responsibility and student loan programmes, all of which serve to enhance, not undermine, equity.

So what of the lessons from the global education industry for our own education system?

Most significantly, where demand is given free expression, the educational supply-side has proved itself to be ready to step in - and if entrepreneurs can create innovative and cost-effective solutions to problems in New Delhi or East London, South Africa, then they can do the same for problems in Newcastle or east London, England, too - if they are not prevented from doing so.

Moreover, for those in government, there is much to learn about the innovative models of public-private partnerships which have developed in many countries - to raise standards and extend access. Officials would do well to examine the success of the partnership between the school chain DPS in India and its partnership with 11 Indian states, or the National Federation of Coffee Growers in Colombia and its management of state schools in rural areas.

Finally, I think the examples of innovation, efficiency and educational relevance also invite us to question the whole role of state education. Travelling to Brazil and witnessing private education companies so willing to invest in technological innovation and curriculum development set me wondering about the paucity of innovation in state schools in England.

In South Africa private education companies are so concerned with the future destinations of their students that they buy up recruitment companies. This raises questions about the concerns of our state schools. There is much to learn which could improve our education system.

James Tooley is professor of education policy at the University of Newcastle, and author of The Global Education Industry, published today by the Institute of Economic Affairs in association with the IFC.