Is there even such a thing?
The global pandemic paved the way for the unexpected rapid growth of the Educational Technology (Ed-Tech) industry in 2020. Since then, its steady increase has shown how universities across the globe are prioritizing their online educational plans to meet the demands of their lifelong learners. Along with this, academic public-private partnerships with Online Management Program (OPM) providers, boot camps, and international pathways are being adopted at an accelerated rate that has not been observed since the introduction of online education.
However, despite the seemingly good turnaround of the current Ed-Tech market, evidence also suggests that such high investments could potentially mean there is an unknown bubble that might crash in the possible future.
Massive Venture Funding for Digital Content and Educational Technology
According to HolonIQ, Ed-Tech companies raised around $16.2 billion in venture funding in 2020, which was considered 32 times more capital than the initial amount the sector attracted back in 2010. For the past three months, Ed-Tech companies have been raising $300 million a week on average, and as of mid-May, around 24 Ed-Tech unicorns are now collectively valued at $69 billion.
Ed-Tech Evidence Exchange, a nonprofit organization, based out of the University of Virginia, also published an analysis showing how the market might be generating a total figure between $26 and $41 billion a year. However, this was also considered a conservative estimate of the actual venture funding of all the Ed-Tech products that startups and companies regularly produce.
An Unknown Flux or Potential
Given how massive the industry is, market investors are now beginning to worry whether this might just be an unknown flux or a bubble that might soon burst. Bart Epstein, CEO of the Edtech Evidence Exchange and research associate professor of the University of Virginia (School of Education and Human Development), shared in an interview for an article about how the ambiguity around the amount being spent for Ed-Tech might be doing more harm than most people realize. During his interview, he also added that the real question shouldn’t be about how much money are we spending, but what exactly is it we are getting from how much we are all spending.
Which leads us back towards the end goal of education and lifelong learning. Despite everything being transferred in digital platforms, educational leaders should continue to ask themselves these essential questions:
- Are learning competencies being met?
- Is authentic learning taking place?
- Will this lead towards lifelong learning or not?
Will Euphoria Lead to Panic or Profit?
On the upside, this might also be the chance that the online education industry needs before it could take off with the other markets thriving in their digital platforms. According to Maia Sharpley, founder of Juvo Capital, which she explained on the podcast, education is so under-invested in that there might as well be more than enough room for the industry to catch up. Compared to its record in 2008 (2%) and 2019 (15%), education currently sits at 4% in retail. She predicted it could still go to 10% or even 20% by 2030.
Even though the current trend shows the potential of an Ed-Tech bubble, the amount of investment pouring in can also drive the market towards a long-overdue change. Others might even say that the online learning industry might have been neglected in the past. At this point, even if it does lead to a possible bubble and a consequent crash, this amount of investment could still change a lot of things in the long run. After all, competition drives innovation, and wherever innovation goes, lifelong learning eventually follows.
