The Past Decade Forecasts a New Wave of Economic Opportunity in Education

Opinion | Edtech Business

The Past Decade Forecasts a New Wave of Economic Opportunity in Education

By Maia Sharpley     Dec 30, 2019

The Past Decade Forecasts a New Wave of Economic Opportunity in Education

This article is part of the collection: A Decade in Review: Reflections on 10 Years in Education Technology.

This op-ed is part of a series of reflections on the past decade in education technology. Maia Sharpley’s career in education includes serving in executive positions with the New York City Department of Education, Kaplan and Charter Schools USA. Since 2018, she has been a partner at Learn Capital, a venture capital fund focused on the global education sector.

Fifty years ago, American futurist and author Alvin Toffler predicted that “the illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.”

Today, that foresight has come to pass. And in this environment, the education industry sees an unprecedented transformation due in part to a new industrial revolution. Some call it “The Rise of the Machines” for the convergence of multiple technologies: artificial intelligence, big data, data science, robotics plus virtual and augmented reality. This fusion of these technologies blurs the physical, digital and biological spheres and impacts society and the workforce globally. It fundamentally alters the way we live, work and relate to each other, and impacts the skills we need to thrive in this new reality.

During the past decade, we have seen only the beginning of changes in the education industry. Over the next decade, we will see an exponential acceleration in the scale, velocity, scope and complexity of learning and teaching as education disruptors and providers innovate to support a new reality.

To date, our education systems sit atop a cultural assumption—that information is scarce. Our higher education system formed around libraries. Our primary and secondary education systems formed around teachers imparting knowledge. But computing power, device adoption, pervasive broadband and exponentially networked collaboration platforms of the past decade have already moved us to a world of information abundance.

This information abundance amplifies shortfalls in the current system, including limited access to high-quality learning experiences from early childhood to adult learning, the increased need to reskill workers throughout a lifetime and broken models of education that do not deliver equal access to underserved populations. All of this creates an industry ripe for further disruption on a global scale.

Education-focused technology that helps make use of all this information and advances learning and equality is still in its infancy. What is clear at this point is that new breakthroughs have yet to begin to form as this new information substructure changes our culture.

In a world where the largest software vendors like Apple and Google don’t write the apps, we are at a tipping point as the worldwide gap widens between skills delivered by the current educational systems and those required by the digital economy. As education researcher Andreas Schleicher noted, “The world economy no longer pays you for what you know; Google knows everything … the world economy pays you for what you can do with what you know.”

In the next decade, talent, more than capital, will represent the critical factor in production. The job market will continue to segregate into low-skill- low-pay and high-skill-high-pay jobs. According to Dell Technologies and the Institute for the Future, 85 percent of the jobs in 2030 don’t exist yet. Without innovative learning platforms that deliver results, create opportunities for learners and provide access to those most likely to get left behind, society is at risk for continued upheaval.

The exciting result of this turbulence is that opportunities for technology-enabled education solutions abound. We see an explosion of startups. From 2008 to 2019 we have witnessed a 4,000-plus percent expansion in the number of funded edtech startups, and the best startups can become unicorns.

From 2015 to 2019, entrepreneurs created 11 times the number of education unicorns compared to 2005 to 2014. Unicorns such as Coursera, Udemy, Varsity Tutors and VIPKid led the way with innovative solutions. We will see the acceleration of $1 billion companies created from about 20 unicorn transactions from 2015 to 2019 to more than 50 in the next five years, which will continue to increase as this next decade unfolds.

This transformation creates a global market with no country unaffected: from Armenia-based SoloLearn to Andela in Africa, from BloomBoard in Silicon Valley to Genius Plaza, which serves students across Latin America. And from established startups such as Higher Ground Education and ClimbCredit to newcomers like SmashCut and WonderSchools, we see more growth and value creation in the education sector than ever before.

Education is now a high-growth market that combines attributes of consumer and enterprise software. Digital has changed the nature of market growth, and edtech startups create new digital markets that leverage unique technology attributes of the new industrial revolution. Distance reduction allow companies to compete worldwide. Large datasets provide insights to drive innovation. The unbundling and re-bundling of education enables entrepreneurial companies to target user needs and circumvent old systems, and network effects shift where value is derived to user bases at scale.

In this environment, opportunities for transformational impact—educationally and economically—exist for those with a deep understanding of how prevailing trends and patterns will shape markets and for those with global expertise and reach to capitalize on and lead the change. As we kick off 2020, talented entrepreneurs, innovative practitioners, investors and risk-takers will sculpt the next decade of technology-enabled education company growth.

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