EdTech market growth is about more than the current pandemic
“EdTech is the next FinTech” — four years ago, this felt like a bold statement from David Bainbridge, CEO of Knowledgemotion. Now, it’s clear that optimism was well founded. Last year, investment in educational technology (EdTech) hit $18.66 billion worldwide; up from $16.34 billion in 2018. By 2025, the ed tech market is set to reach a total value of $341 billion.
Even before coronavirus sparked the move to online living and remote learning, EdTech tools were entering classrooms and boardrooms across the globe. As students, teachers and workforce leaders seek more efficient, engaging, and personalised learning, EdTech is rapidly expanding; and that makes it one of the most important sectors to watch, now and after the COVID-19 crisis.
Here is a five-minute rundown of everything businesses need to know about EdTech:
Key players: who is big in ed tech?
With America traditionally holding the title of industry leader — housing 43% of EdTech companies — the majority of today’s well-known players are rooted in the US. Coursea, for instance, began as the brainchild of Stanford University professors keen to make certified higher education more accessible and has grown into a huge global platform with several academic partnerships, as well as a major force in massive open online courses (MOOCs). Similarly, San Francisco-based firm Udemy has enhanced the availability of sector-specific expertise, offering over 2, 000 courses built by independent specialists in various fields.
But evolution is starting to spread and give rise to a new breed of EdTech start-ups that will enrich the already considerable diversity of EdTech. China, for example, has proved particularly fertile ground for innovation, with online teaching tool 17zuoye placed among the world’s key EdTech unicorns alongside numerous other platforms, including VIPKid and Yuanfudao. Topping the current chart, however, is ByJu’s; an intuitive learning experience that’s enhancing multi-subject engagement for Indian students and valued at $8 billion.
The changing face of global funding
Behind the recent uptick in ed tech development is, of course, greater funding. Where once, the bulk of financial support came from a mix of private individuals and local governments, the last few years have seen increasing interest in the EdTech market from venture capitalists and an accompanying spike in spending. Between 2014 and 2018, venture capital investment soared by $6 billion globally; rising from just under $2 billion to over $8 billion.
Perhaps unsurprisingly, the core driver of this spending surge is China. In 2018, China made up 50% of all venture capital spend, and in the first half of 2019, four out of the five largest investment deals were logged in China. Additionally, the latest data also shows that China and India have grown to collectively account for a 70% slice of overall ed tech investment.
In a further boost for EdTech progression, this market shift also seems to have provided a positive motivator for other regions to ramp up education expenditure. The UK Department for Education (DfE), for instance, moved to increase its own investment in 2019; unveiling a new EdTech Strategy that includes plans to release £10 million in funding and facilitate growth by offering more advice, promotion, and networking opportunities for businesses.
Speeding towards a higher-tech future
Recent months have demonstrated the far-reaching value of EdTech as digital textbooks, classes, and teaching platforms have helped to keep the global education system rolling. But this is only the beginning; as the industry continues to evolve and expand, educational tools will become smarter.
Current projections anticipate that the next five years will bring a gear change from limited use of current advances to widespread adoption; including a rise in total augmented and virtual reality (AR and VR) investment of more than $10 billion. At the same time, previously futuristic dreams of learning aided by artificial intelligence (AI) will translate into reality; with spending on educational AI and robotics due to rise by $9 billion around the world, and make machine intelligence a key fixture of the modern learning environment.
And judging by the shape of emerging EdTech solutions, those predictions look very realistic. See, for instance, Pearson’s autonomous AI calculus tutor, Examity’s automated tool for combatting cheating in online tests and Kano Computing’s coding kit, which is training the next generation of human coders, with a little help from Harry potter.
No matter what the post-COVID-19 outlook holds, one thing is for sure: EdTech market growth is about much more than the current crisis. As global learning needs develop, forward-looking platforms and investors are recognising the vast potential of EdTech as not just a booming sector, but also a means to re-route the course of education: setting the industry on a path to better efficiency and learning accessibility that will create a more skilled world.
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