Only 2% Of $5Tn Education Market Is Digitized: Study
The global education market is huge. According to latest findings, the market is now over $5tn, 8x the size of the software market and 3x size of the media and entertainment industry. Unfortunately, only 2 percent of that market is digitized. The trend however is changing with the mobile penetration, particularly smartphones that are likely to be a game-changer towards delivering and supporting learning, and driving growth.
“We expect a long rising tide rather than an avalanche, and as such, we need to manage our expectations accordingly,” explained Benjamin Vedrenne-Cloquette, Co-Founder, EdTechXGlobal. “We estimate that the speed of digitization in education will be up to fivetimes slower than has been seen in other sectors, due primarily to the increased number ofgate keepers involved in digital transition decisions, teachers, institutions, governingbodies, districts and policy makers amongst a few”.
According to the EdTech report, education technology is becoming a global phenomenon, and as distribution andplatforms scale internationally, the market is projected to grow at 17.0% per annum, to $252bn by 2020. To date, the US has set the trend and pace of the EdTech market. Asia is now experiencing the world’s fastest growth in investment into the sector, and Europe hasseen increases in M&A; however, this region remains a largely under-invested andfragmented market.
The report notes that NorthAmerica, Europe and the commonwealth states lead in internet and mobile penetration, while substantial growth is expected across emerging markets, with mobile being a catalyst fordelivering and supporting learning. With 90% of the world’s population under 30 alreadybeing in emerging markets, education and vocational training in the area will be led bymobile first strategies. There are of course numerous reasons, one being, education becomes increasingly more expensive.
Population growth will be a key challenge for the EdTech sector. By 2035, there are expected to be 2.7bn students worldwide, and in order to meet higher education demandunder the current structure; two universities need to be built per day, over the next twenty years. As such, the report states that this is leading education providers to seekways to capitalise on growth by expanding their brand to export markets so individuals canaccess internationally recognised qualifications.
With the recognition of online education qualifications long representing a challengefor the industry, the report indicates that MOOC job conversion rates are increasing,largely driven by demand from employers for skilled workers. Although monetisation stillremains unclear, the report draws up solid examples of successes in this respect withCoursera, an educational technology company that offers MOOCs, sited as being set to reach $30m in revenues per year thanks to its steps to solve marginal cost and positive impactsat a massive scale.
The report also predicts a global workforce crisis powered by extreme automation. “The’Fourth Industrial Revolution’ will see an increase in workforce automation to include notonly highly repetitive low-skill jobs, but also highly routine medium-skill jobs. Thiswill accelerate disparity between the supply and demand of candidates and force employeesto learn new skills, both within the workplace and in educational establishments,” says the report.
Benjamin continues, “In a rapidly evolving economy where skill sets continue toprogress at an accelerated pace, digital models offer a way to capture these changes andoffer new routes for re-skilling as well as addressing widespread labour shortages, 50% of current jobs won’t exist in 2025, and consequently, there will be a growing need tore-train the workforce in order to address current skill gaps and increase the use ofcontinuous learning.”
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