The process of learning is evolving with advancements in technology. The education technology industry, or for short Ed-Tech, specifically deals with hardware and software to enhance the teaching and learning experience. Ed-tech. industry includes not just virtual learning platforms but also online learning apps, curriculum management software, e-textbooks, and communications and administrative platforms. The industry is not just restricted to online learning or distant learning or for that matter remote learning but also includes in-class learning. However, online learning has become a major part of the Industry due to the pandemic. key drivers for the industry include increasing connectivity and accessibility of the internet, advancing technology, rising investment in the Ed-Tech, government support and new education policies, growing literacy rate, and sustainable development goal for quality education. Further, the introduction of AI has widened the competitive landscape. The spiraling up of artificial intelligence (AI), software, and hardware industry is expected to advance research and development to make learning more efficient and effective.
Evolution of Ed. Tech
Ed. Tech companies have been existed for over more than two decades. However, they have gained prevalence only in the past three years. The plummeting cost of the internet and smart device has significantly contributed to the industry.
Over centuries the leading process has been evolving by using various techniques. People use to learn poems, plays, and songs. Back then the focus on memorization was considered important due to the lack of manuscripts and availability of paper. It was only in the 15th century that the printing press made the written material made available more easily. From then on, the availability of literature and textbooks started publishing and the number of books printed increased. The literacy rate increased in Europe as the region had a high number of printing presses. Apart from this easy access to raw material was also an advantage for the region as most countries imported paper and other raw materials from their respective colonies. In the 18th century tools like blackboard and chalk became extremely popular and are used to this date. Moreover, the use of tools like Hieroglyphics, Quill pen and pencil, and abacus amongst others were used to improve the learning process. However, during World war II, the United States Army adopted film projectors. this marked as an entry of technology for study and training. Further, with the development of high-tech projectors, PowerPoint presentations were delivered for training purposes as well as for schools. With this came the era of the Ed-Tech. The use of audio-visual modules for better learning was a turning point. Further, smart evaluating tests made it easier for the teacher and interactive learning for the students. Apart from in-class technology, with the increasing use of computers, laptops, and the internet; the scope of Ed-Tech widened to online platforms as well. Massive online courses (MOOC), online degree courses with collaboration with top universities became popular phenomena. Companies like EdX, Khan Academy, Coursera, Udemy amongst others became extremely popular. Moreover, with the onset of a pandemic, when most of the countries had to impose shutdowns on schools and offices to prevent the further spread of the virus, the Ed-Tech companies played an important role to provide quality education during such time.
In 2000, only 6.73% of the world population had internet. This was only 49.91% in 2018 which has increased to reach 56.73% in 2019, as per the World Bank data. International Telecommunication Union (ITU) estimates a 17% increase in the usage of the internet since 2019. According to ITU’s estimates, approximately 63% of the world population is expected to be using the internet in 2021. Which is around 4.9 billion people. The organization also stated, 65.7% of the households have internet access at home. For developed natation the numbers are high, it accounted to 87.8% of the households having internet access. On the other hand, only 22% of the households have access to the internet in the least developed countries. In developing countries, however, the stats are good, with 57.8% of the households having access.
Further, the availability of 5G has also contributed to the industry. 5G is more capable of air interface, giving the user ultra-low latency. Making it 500% faster than 4G LTE. The 5G mobile data network is available in over more than 60 countries. Further, it is expected to launch in India in the coming year in 2022. 5G is designed to link a vast number of embedded sensors in nearly anything by allowing data speeds, power, and mobility to be scaled down, resulting in incredibly lean and low-cost connection solutions. With the availability of faster and cost-effective internet, the demand for online courses and other Ed-Tech platforms is expected to spiral up.
Further, with easy accessibility of the internet and newer technology coming up the cost of the internet has drastically reduced. Especially, for low-income countries in 2008, the fixed broadband median cost was USD 149.6 and in 2020 it cost USD 21.6. The same downward trend is observed in lower-middle-income countries and upper-middle-income countries, due to the rising completion and cutting-edge technology. On the other hand, the higher-income countries' median fixed broadband cast has increased slightly. Moreover, with the rising Internet of Things (IoT) and clouding services, Real-time, remote data monitoring has become easier.
The pandemic has thrown traditional education into disarray. According to UNICEF, more than 1.5 billion children globally have been affected due to covid-19. According to UN Sustainable Development Goals, Covid-19 has wiped out 20 years of education gains. due to lack of devices, internet, and other infrastructure. While this disruption has increased inequities in access to education, it has also expedited gains in innovation that might help narrow those gaps. Immersive technologies, which digitally replicate the actual environment, have a lot of potential in Ed-Tech, according to experts.
Augmented reality (AR), virtual reality (VR) and Mixed Reality (MR) technologies make learning more enjoyable and engaging. Employability skills, often known as soft skills, such as communication, leadership, and teamwork, are at the top of the program's priority list. according to PwC, individuals who are taught using virtual reality technology are 3.75 times more emotionally linked to the content, four times more attentive, and 275 percent more confident about using the skills they acquire the following training. Virtual reality may also be used to teach individuals more rapidly and cost-effectively.
Companies like zSpace, Neo Bear, Strivr, Osso VR, Mursion, Interplay Learning are some of the key players of VR/AR Ed-Tech. Recently, SAP and JFFLabs have established a new initiative called the Skill Immersion Lab to help students prepare for their future careers using immersive learning technologies. JFFLabs and SAP have also coupled up to test how immersive learning may be implemented in classrooms across the country.
Further, with the advent of Artificial intelligence and Machine learning the industry is expected to flourish. It is used to provide analysis of the performance of the learner also the data collected can be used for predictive analysis. Companies like Duolingo, Coursera, Brainly are using such technology get to offer their courses. Further, this technology helps the educators to reach process efficiency, by focusing more on teaching.
Several Chinese firms are actively working on AI technologies for use in schools and colleges. 17 Zuoye is an online learning platform that employs AI algorithms to provide assignments and grades to students. Liulishuo is an English language learning platform that uses algorithms to give students feedback via a software bot. VIPKid is another English learning platform in China that matches students and teachers based on their desired learning style, using AI algorithms.
Education is the backbone of any nation’s development. Governments of different countries are adapting to more and more e-learning platforms to improve the level of education. Especially, after the outbreak of covid-19. Were children and teenagers extremely susceptible to coronavirus. Governments are promoting schools to collaborate with Ed-Tech to not compromise on education, even if the student is learning from home. Developed and developing nations saw higher adoption of Ed-Tech as they have infrastructural facilities and government support. However, underdevelopment saw a severe drawback. Developing countries like India have progressively shifted their education policy to include digitalization in the education sector. India is also home to many high valued Ed-Tech companies namely Byju’s, Unacademy, and Upgrade amongst others.
United Kingdom’s Department of Education (DfE) has brought some stringent changes in the education system. DfE also announced an education recovery support package, to ensure the education of children from different backgrounds including children with special education needs and disabilities are not affected by the pandemic. For this, DfE has come up with a digital ans technology strategy. The national cabinet established a set of national principles for school education on April 16, 2020, to guarantee that all children get a high-quality education from kindergarten to grade nine, that students progress through their year levels, and that a successful transition to 2021 is realized. Further, in Brazil, IDB Lab, Lemann Foundation, and Imaginable Futures invested $2.36 million in the Ed-Tech program called impulsion. The program aims to connect public schools, non-profit and Ed-Tech startups to develop digital solutions.
Also, in Uzbekistan, the Ministry of Higher and Secondary-Specialized Education of the Republic of Uzbekistan (MHSSE) has entered into a Public-private partnership (PPP) with Alpha DX by signing a memorandum of understanding (MOU). It is a joint venture (JV) for the US$50 million, where the primary goal is to be developing and operating the Asnaro University of Uzbekistan (AUU), this will be fully integrated with the Alpha DX subsidiaries' a learning platform
In the past three years, the investment in the Ed Tech industry has significantly increased. Especially with the outbreak of the pandemic. According to World Economic Forum (WEF), over 1.2 billion children are out of classrooms. Further, more than 90% of the world’s schools and most colleges are closed, and teaching is undertaken online. Ed Tech industry apprehended the market growth. Where investors saw a loss in the aviation, hospitality, and manufacturing sectors. With the rising Ed Tech industry, investors grabbed the opportunity to invest in the Ed. Tech. industry.
2021 saw multiple Ed-Tech companies becoming public by offering IPO. For instance, Coursera offered IPO by becoming listed on New York Stock Exchange in March 2021, valuing the company over $7 billion. Zhangmen, a Chinese Ed-Tech firm also became public by offering IPO in June 2021. This valued the company for over $1.8 billion. Duolingo a US-based language learning Ed-Tech, and PowerSchool, a K-12 Ed-Tech, also became public by offering IPO in July 2021. Most recently in October 2021, Udemy raised $400 million by offering IPO.
A special purpose acquisition company helped Nerdy, a platform for live online learning, become a public corporation (SPAC). In September 2021, it completed its business combination with TPG Pace Tech Opportunities, a publicly-traded SPAC. Further, BYJU’s is expected to launch IPO in Mid-2022.
The year 2021 saw some major acquisitions as well.
For instance, BYJU’s acquired 10 companies including Tynker, epic, Aakash Educational Services, Great Learning, Hashlearn, Scholr, Whodat, Gradeup, Toppr, and Geogebra. All the companies have different specializations. Epic is a US-based digital reading platform that was acquired for $500 million. Tynker is a coding platform that was acquired by BYJU’s for $200 million. The company acquired Toppr for $150 million. It also acquired great learning, India’s leading higher education and professional learning platform for $ 600 million, to strengthen the professional and higher education segment. Recently, in December 2021 the company acquired Geogebra, a math learning platform based in Austria. The company also taped in AR Ed-techs by acquiring Whodat. This year in July, a renowned MOOC provider, EdX started by MIT and Harvard University was acquired by 2U. 2U, an online program management company, was acquired for $800 million.
Companies like Apple, Microsoft, and Alphabet Inc. have also shown some great interest in the Ed-Tech industry. Cuemath, Alphabet based online math-course provider, offered free math courses to won users in India. also, Google and Byju’s tied up offering learning solutions to schools. on the other hand, Apple launched Apple Teacher which is a platform program designed to support educators who are using Apple products for teaching and learning. other than this Microsoft acquired tutoring platform TakeLessons in September 2021. Rising investments, partnerships, and M&A have tremendous scope for growth in the Ed-Tech industry.
Where the Ed-Tech Industry is Progressing Towards?
With the increasing adoption of Ed-Tech, especially during the time of pandemic where in-class teaching has become difficult, such industry is proving advantageous for not just proving the good quality of education, but also to providing new scope of efficient teaching and learning experience. Although, for the underdeveloped countries, school closure and lack of good infrastructure, the dropout rates have increased tremendously. To an extent that, 24 million children and youth are at risk of dropping out, according to UNESCO. According to UNESCO research, 100 million children would fall below the minimal reading competency level as a result of school closures. However, hybrid learning systems with Ed-Tech can prove as a solution to this problem. The World Bank is assisting nations in determining how to solve challenges such as cheap connection, device procurement, cloud solutions, and multimodal education delivery.
Further, in developing and developed nations, where connectivity and infrastructure are not an issue, Ed-Tech has thrived tremendously. Countries like China, the USA, and India produce most of the Ed-Tech firms. This not only provides further opportunities of using AI, VR, AR, and MR for further development but also an opportunity to provide better aid to the students with special needs and disabilities.
An Australian Ed-Tech startup, Dystech is developing a dyslexia screening platform. For which the company has raised $290K. By using AI the company plans to perform dyslexia screening. This will help for early diagnostics and further work on managing it. Ed-Tech like this will help overcome various obstacles using various assistive tools and act as an equalizer.