Why (Digital) Education is the new eCommerce
Education Technology has never got the attention it got this year. We saw some truly revolutionary developments and Tech Blogs have been full with news and announcement on EdTech. The fact that there is a public debate about the maturation of digital learning and even a potential bubble is a fair sign that real change is afoot. While looking at a recently published report on trends in eCommerce by Cisco triggered a valuable question, can digital education ever be as big as eCommerce?
Global eCommerce is growing at 13.5% CAGR. It is estimated to reach $1.34T by 2015. While e-commerce spending may be growing, the pace at which commerce is moving online is less rapid than music and advertising. High on investments and deals, while the US eCommerce is just over 5% of total retail, the digital share of music and advertising is over 50% and 22% respectively!
Faster digital adoption in case of music and advertising can be attributed to the fact that these experiences can be fully digitized. While in case of eCommerce only partial experience can be digitized, most fulfillments still happen in physical form. Logically speaking what propelled faster transition to digital in case of music and advertising makes a case for education as well.
Technology and Education
Historically, education technology (or eLearning) added more maintenance, upgrade, and teaching burdens to an already overburdened — and often technologically under-prepared and un-enthused — teaching cohort, while failing to meet the specific needs of highly particular, and easily distracted students.
Today’s modern web technologies and infrastructure offers a complete platform that can make our long cherished dream of taking education digital. Today it’s possible to radically transform the education experienced by leveraging the economics and interactivity of the Internet. In the recent past, a slew of new wave of EdTech startups have demonstrated this by applying technology more humanly. No surprise that we see relatively faster (compared to eLearning) and large-scale adoption of offerings such as Edmodo.
Why will it be the next best thing after eCommerce?
Online education is quickly becoming a major phenomenon around the world and it won’t be long that purists will join the online education bandwagon. The ease, access, convenience and lower cost it offers appeal to people just about everywhere. A 2011 study by Sloan Consortium found that 6 million students in the US are taking at least one online course, nearly one third of all those enrolled in higher education. In fact, enrollments in online courses are outpacing those of higher education as whole; with 10% increase in online students between 2010 and 2011 compared to a just 2% rise overall. In response, 65% of higher education institutions now say that online learning is a critical part of their long-term strategy. Lets look at few other predictions and findings that support changing consumption patterns in education:
- The cost of a college education is seemingly unsustainable and US student debt has crossed the trillion-dollar threshold.
- Recently released report by research firm Eduventures revels that 38 % of prospective adult students prefer to study fully or mostly online.
- Consumer Electronics Association has identified technology in education as one of five “prominent technology trends expected to influence the consumer electronics industry in the years ahead.”
- A survey from the Pew Internet and Elon University revealed that a majority of stakeholders expect technology to significantly change the world of education by 2020.
- According to Thomson Reuters, US venture capitalists invested $429.1 million in 82 education-technology deals last year, up from $334.3 million and 58 deals the year before. Adding the resent deals we should see this figure go up to $600 million by the year-end.
- A number of EdTech focused venture funds and incubators such as Imagine K12, New School Ventures, and Learn Capital are actively scouting and supporting interesting ideas. Do we remember any eCommerce only fund?
- Harvard Business School Professor Clayton Christensen and author of several books on disruptive innovation has predicted that half of North American higher and K-12 education will move online in the next ten years.
With this backdrop of trends and Professor Christenson’s prediction, the estimated size of 2022 global online/digital education market will stand at a $4.38 Trillion (50% of $ 4.45T growing at moderate 7% CAGR) based on market prediction by GSV Advisors. Think of this as New Year’s forecasts if you like, considering the season, but more truly it’s observations for the visible future.
At CAGR 13.5% global eCommerce industry will stand at $ 3.25T in 2022. Which means digital education will be 34.67% bigger than eCommerce in 2022. Even if only 37% of education moves online in next ten years it will equal eCommerce. Can this hypothesis become a reality? Well the recent developments in the education sector suggest that the world has accepted online education and the stage is ready for a transformative impact.
Bill Gates once said
“the impacts of fundamental technological change tend to be over- estimated in two years and underestimated in 10”.
We are in the first two years of taking education online and the journey ahead will be exciting. And in the process we’ll re-imagine every part of education ecosystem. Whatever be the numbers, one thing is certain, digital education is fast becoming main steam and will create some great future business.
What are your thoughts?