Child Care Services Industry Profile

Companies in this industry provide supervision and educational programs for pre-school and school-age children. Major US companies include Bright Horizons Family Solutions, Knowledge Universe, and Learning Care Group; major companies based outside the US include Asquith Nurseries (UK), Kinderopvang Humanitas (The Netherlands), and PLASP (Canada).

Global demand for child care services and early childhood education is growing as a result of increases in the number of women in the workforce and the number of single-parent families, according to the United Nations. One child in three was enrolled in preschool in 2004, compared to one in 10 in 1975.

The US child care services industry includes about 53,000 commercial facilities with combined annual revenue of $20 billion, plus about 21,000 facilities run by nonprofit organizations with combined annual revenue of about $13 billion. The industry is expected to grow at a high rate over the next two years. Key growth drivers include demographic shifts and expansion of employer-sponsored programs.

COMPETITIVE LANDSCAPE

Demand is driven primarily by growth in the youth population, and secondarily by employment and income. The profitability of individual child care facilities depends on good marketing and efficient operations. Large companies have economies of scale in advertising and administration. Smaller companies can compete effectively in local markets by owning convenient locations. The industry is highly fragmented: the top 50 companies generate less than 20 percent of revenue.