Expenditure on education and training from governments, parents, individuals and corporates continues to grow to historic levels and is expected to reach USD$10T by 2030.
By 2025 there will be half a billion more school and university graduates in the world than today, driven primarily by population growth in developing countries. How will current models of education deliver to the scale, quality and speed required?
Source: Wittgenstein Centre
Innovation requires capital. Governments are struggling to fund education to previous levels and education is not drawing on enough private capital to fund the innovation that’s needed. Public-Private Partnerships will be critical to supporting future growth, innovation and access to education.
As a sector, education is a digital laggard with less than 3% of overall expenditure allocated to digital, presenting a serious challenge given the scale of what’s to come.
In 2018, education spent $142b on digital. While this is forecast to grow to $342b by 2025, it is still less than 5% of overall expenditure.
Applications of advanced technology in education and learning will begin to hit their strides by 2025 with AR/VR and Artificial Intelligence becoming increasingly integrated into core education delivery and learning processes. Most likely starting in the corporate and non-accredited sectors.
Venture Capital investors can see the favourable dynamics of the global education and training market, investing $8b in 2018, up from $2b in 2014. This is set to grow, but is not evenly spread across the globe.
China, with the largest education market in the world, has led education VC investment growth over the past five years. China now makes up over 50% of all Global VC investment in education, the USA 20%, India, 10% and Europe 8%.
Venture Capital investment ultimately drives more exits in the form of public listings. In 2015 there were 10 listed education companies with Market Cap’s > $1B, growing to 30 in 2018 and expected to be 100+ by 2025.
Education is a complex system. When it comes to understanding market dynamics and which technologies, business models and parts of the sector are likely to grow or shrink, it pays to understand the nuance. The Global Learning Landscape taxonomy, consisting of 50 clusters of innovation helps to unpack this complexity.
The Education to Employment pipeline is experiencing an unforeseen disruption and the challenge ahead is enormous.
Experimental Market Cap weighted Geographic and Sector Indices
The $140B global publishing industry has been navigating digital disruption for at least two decades. EdTech’s $160B+ market today will more than double by 2025, dwarfing the publishing market at large.