Lockdowns worldwide led schools to close and lectures to migrate online last over the last couple of years. Teachers frequently found themselves having to rethink their teaching strategies from the start to adapt to a new learning environment, such as an online classroom, without losing their students’ attention.
EdTech or “Education Technology” can be defined as improved learning through the use of a combination of IT tools and educational techniques.
There has recently been a disruptive shift in the education sector — from traditional learning to personalized and interactive methodologies. Because of innovative tactics combined with new technologies, digitization has progressively impacted education, and “learning” has now become a lifetime process. Analysts predict that the EdTech sector would thrive across geographical regions and socioeconomic backgrounds.
Global Edtech Market is on the Rise
In the context of a reduction in overall worldwide expenditure, the global market size for EdTech is a US$ 63B increase above pre-COVID forecasts. According to Holon IQ, total global EdTech spending is predicted to reach $404 billion by 2025, indicating a 16.3% CAGR, or 2.5x growth, from 2019 to 2025.
Among the US$ 6.4 trillion spending on Education & Training, there is less than 4% (USS$ 268 billion) of the digital expenditure. EdTech expenditure is expected to account for 5.2% of the US$ 7.8 trillion Education & Training market in 2025
An increase in EdTech spending caused by COVID-19 is predicted to re-calibrate to a longer-term integration of digital technology and a shift to considerably higher use of online education in the future years. As most schools and colleges are still beginning of a long digital maturity journey, a significant infrastructure catch-up is necessary for managing curriculum, data, and administration.
According to Grandview Research, North America dominated the market in 2021, accounting for more than 35% of global sales. This significant percentage can be attributed to a large number of venture capitalists and private equity investors investing in the EdTech sector in the United States.
From 2022 to 2030, Asia Pacific is expected to have the fastest CAGR of 19%. This increase can be ascribed to the increasing popularity of computing and smart-gadgets among the general public. In recent years, developing countries such as India have seen a surge in inexpensive broadband connectivity, resulting in a slew of businesses reaching out to the populace. This trend might allow consumers to experience education learning through the usage of internet connectivity. Furthermore, players in education in poor countries are increasingly considering technology to fill the void between educational infrastructure and instructional resources.
Segments of EdTech
EdTech Industry can be segmented based on:
K-12 Education. Companies providing online courses, educational resources, learning platforms, management solutions, teaching resources, and other services for K-12 students, teachers, parents, and administrators
Higher Education. Companies providing online courses, educational resources, learning platforms, management solutions, teaching resources, and other services for Higher Education students, teachers, and administrators
Corporate Training. Companies offering software for creating, managing, and tracking employee training
Broad Learning. Companies providing online courses, educational resources, learning platforms, management solutions, teaching resources, and other services for diverse types of customers.
Language Learning. Companies provide platforms for students of all age groups (pre-K, K-12, Higher education, professionals) to learn various languages online.
K-12 Market: This is probably the lowest value segment among the 4 EdTech segments provided above. The market size in terms of value as well as the CAGR is comparatively lower. The market size is between US$ 2-3Bn and has been growing at 5.9%. But, the growth is steady and can be considered a risk-free segment because of its steady growth outlook. So, among the four segments, the K-12 segment is the least lucrative for an EdTech business.
Higher Education Market: This is probably the most lucrative, fast-growing market. The CAGR is 21%, and the market size is forecasted to grow roughly 250% of 2019 level. Hence, the potential of this market is very high. Also, since this is a relatively new market, the businesses can leverage early mover advantage and command a degree of advantage by building a substantial customer base. Thus, this is a highly growing segment and can be considered a star market for new businesses.
Corporate Training Market: This market has been steadily growing with a CAGR of 11%. The market size is also higher than the previous two segments, i.e., US $45–50 Bn, making it one of the most lucrative segments for EdTech business. However, with such massive potential, the competition would also be higher, and the business would require a powerful strategy to penetrate the market and gain a sizable market share.
Online Language Market: The online language market is growing at a CAGR of 13.1% and shows strong growth potential. The market size in value terms is roughly $12.5 Bn (2025) and has exponentially grown from $5.9 Bn. With the rising penetration of online language services, the market will grow massively in value. Thus, it makes a lucrative proposition for the EdTech business.
Trends in EdTech business model
The global EdTech landscape has taken leaps & bounds and requires businesses to adapt on-the-fly. This massive growth has led to several trends in the EdTech market in recent years.
Collaborative course learning Platform and soft skills
Online platforms allow learners to interact in real-time with each other to discuss topics for team collaboration.
The accessibility of knowledge is the main advantage of these technologies for teaching across different media. These platforms foster collaborative relationships between teachers and students. They facilitate group activities and communication.
Artificial Intelligence (AI) and Adaptative Learning Platforms
AI in EdTech facilitates personalized learning. EdTechs learn how to teach students better.
AI helps to understand the individual’s reasoning that strives to personalize lessons, readings, practice activities, and assessments for individual students based on their current skills and performance.
Experiential Learning Platforms
EdTechs links internship offers with teachers and students.
These services provide a better understanding of the labor market and its opportunities.
Students receive hands-on training from experts while companies can discover new talents.
Game-based Learning Platforms
EdTechs use games to the power of games to define and support learning outcomes. These technologies make it possible to reinvent learning methods using neuroscience.
The disruptions caused by COVID-19 offered a historic opportunity to transform education systems and realize the promise of education technology. In most countries, people have adopted, rolled out, and used more of the functionality of EdTech tools. Although the world is moving to the new normal, EdTech has successfully educated the market about its benefits and value. As a result, the market is expected to have fast-paced growth with high adoption in education worldwide.
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