Education Technology: Industry Overview
Education Technology (EdTech) combines education and technological advances to revolutionize the conventional landscape of education. At its core, education is communication and EdTech enables this communication to reach deeper and wider audiences. This industry has enriched education, reaching various industrial categories such as coding, language, STEM, social-emotional learning, early childhood education, and learning management tools. The emergence of Virtual Reality (VR) has also enhanced educational activities, enabling them to become more interactive.
According to Tracxn, there are 21,303 EdTech start-ups globally, 555 EdTech start-ups in Canada, and 146 EdTech start-ups in Toronto. The industry is highly fragmented and there are little to no barriers to entry because of new EdTech service providers flooding the market, forcing older companies to burn cash in order to win market share. Because the cost of acquiring customers often outweighs the revenues generated, most EdTech companies have been struggling with profitability.
Impact of Covid-19
COVID has sparked the world’s largest-ever remote learning experiment and thus has been a key catalyst in this industry. As most people have been forced to adopt online platforms because of the pandemic, EdTech is poised for rapid acceleration and is expected to triple from $107 billion in 2015 to $350 billion by 2025. Although much of this growth is directly attributable to China, users can originate from anywhere around the world as the platform itself is inherently accessible from anywhere.
Certain global macro trends such as population growth in developing countries, rising demand for educational technology, tools and services, increasing digitization to improve outcomes and efficiency, and opportunities to solve key problems in the industry (student debt, flattening test scores) will ultimately contribute to the rising growth in the EdTech market.
Major Players in Industry
Within the EdTech market, the three main education categories (PreK-12, post-secondary, and corporate training) have technology infused throughout the life of the learner which creates continual demand. Each category is unique and has different end-users and buyers but the EdTech industry can also be divided by different product groups like online courses, group work platforms, productivity apps, exam software solutions, and interactive classes for schools. Crowdmark Inc., a major player in the industry, is the world’s premier online grading and analytics platform, enabling educators to evaluate student assessments more effectively and securely than ever before. Another major player is Coursera, an online learning platform that provides a massive open database of courses for 68 million learners from around the world.
Recap & Final Thoughts
Today’s coronavirus outbreak may do for EdTech what SARS did for e-commerce. In 2014, Michael Trucano, a World Bank specialist on education and technology policy, described the importance of “tipping points” to push educational technology into the mainstream. Mr. Trucano even put forth that an epidemic could be the catalyst, writing “one credible potential tipping point may be a ‘black swan’ event that could push all of this stuff into the mainstream, especially in places where it to date has been largely peripheral: some sort of major health-related scare.”
The EdTech industry, however, is not without its flaws. With no barriers to entry, new EdTech service providers have been flooding the market, forcing older companies to burn cash to win market share. As the cost of acquiring customers often outweighs the revenues generated, most EdTech companies in Asia have been struggling with profitability. Nonetheless, this is an innovative industry that is poised for rapid growth and acceleration as the pandemic continues to create further demand for EdTech solutions.