Who will profit from Education’s EdTech revolution?

09 Jul 2019

Who will profit from Education’s EdTech revolution?

Education is being transformed by digital delivery and the growing involvement of ‘for profit’ providers, writes David Craik.

The education sector is going through fundamental change, observes Julie Steiner, Chair of the Global Education Practice at Odgers Berndtson Australia.

“Historically, the provision of education was the domain of governments. But in many countries, especially in the developing world, they can no longer afford to build brick and mortar schools and universities,” she states.

“This comes as demand for education is being driven by the aspirations of a growing band of middle-class parents in developing nations and governments needing to plan long-term to ensure they have a skilled workforce relevant to their needs.”

Education is not just a social good but an economic necessity and has directly led to the growth of so-called ‘for profit’ providers.

“These organisations,” says Steiner, “are able to complement the investment of governments. The government will still oversee quality and regulation, but are opening up the provision of education from kindergarten to the tertiary sector for commercial providers where the user will have to pay.”

The rise of EdTech

But there is also another rapidly moving development. Education Tech, or EdTech.

Traditional publishers of content, NPF and commercial education players, tech companies, private equity firms and governments are forming alliances to focus solely on online delivery of education and education services. The driver is education and ever-increasing populations of students, and the mechanism is the evolving ease of access to digital delivery.

The main alliances are forming locally backed by global investments.

The money for investment at present is in the developed world and the major growth will be in the developing world. 

Odgers Berndtson recognises that these changes affect the leadership of educational organisations.

“Senior leaders must focus on what the world of work will be in the future and therefore this will affect education strategy, policy and investment. Critical to this is how teachers will teach well and how students will learn well in a digital environment,” Steiner explains.

“We are looking at different sectors, not just education to find these new leaders.”

Matthew Robb, Partner and Education Practice Lead at strategic advisors EY-Parthenon, adds: “Organisations need people who can innovate, think about customer service and be more commercially minded.”

Universities, he adds, are now in a commercial marketplace. “They are competing against each other for the best students. For many that means less research and more investment in teacher quality, more up-to-date courses and using advanced digital technologies,” he states.

“How do we give students better job opportunities? Universities are now less knowledge factories and more talent factories.”

Partnering with external experts

Universities are also looking to external experts such as PwC which is working with institutions such as Russia’s National University of Science & Technology. In particular, it is interested in how a conducive research culture can be built to attract and retain talented students.

Vanta Education is a commercial education provider running mainly online vocational courses. Folline Cullen, President states: “There are varying degrees of cultural acceptance when it comes to using a live online teacher or pre-recorded. Europeans still hold to some form of traditional education and are less inclined to go fully online. Developing countries like China economically need to reach broader groups of people more quickly so they are more accepting.”

Vanta’s target is the adult learner and getting them to be ‘career ready’. “Businesses want skills like data analytics and data security. That helps us develop specific programmes,” Cullen states.

Culture clash

When it comes to recruitment, it can be difficult to find academic management that truly understands it is a ‘for profit’ business. “Academic leaders traditionally like to control how they assess students and communicate with them. In a commercial business, they need to understand efficiencies and that universalising such processes are needed. There needs to be a focus on the bottom line,” she concludes.

This article is from the latest ‘Culture’ edition of the Odgers Berndtson global magazine, OBSERVE.

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