By the time we reach 2025, more than 1 billion people around the world will have attained a post-secondary qualification throughout their lifetimes. Over the next decade, an additional 280 million people will graduate with a post-secondary qualification, more learners will opt to study online, with better offerings from colleges and other providers, increasing acceptance by employers, advancements in technology and an acceleration driven by COVID-19.
Just under a year ago, we published pre-COVID global sizing estimates for Online Degrees, expecting a 14% growth rate from $36B in 2019 to $74B in 2025. The world was in lock-down and the fundamental impact of the pandemic on learners, learning and the education sector was becoming apparent. More recently, we expanded our coverage to include the Global Micro and Alternative Credential Market, estimating a $9.9B market in 2019 and growing rapidly.
We’ve now merged and updated this coverage to provide a complete picture of our ‘pre-COVID’ expectations compared to this ‘mid-COVID’ outlook. We will continue tracking this market and providing updates including a ‘post-COVID’ estimate in 2022 when we have seen how the academic year ahead and the ‘new normal’ for workforce unfolds.
As drivers for change in post-secondary education strengthen, the boundaries between formal, accredited, long-form education and shorter, focused programs that may (or may not) be accredited and may (or may not) contribute to formal programs, are less clear than ever. Whether in higher education or in workforce up-skilling, micro-credentials are set to play a key role in supporting learners after their completion of secondary school. The ultimate form/s of micro-credentials may embed further into existing qualifications frameworks, or become an alternative to current post-secondary options.
Either way, from a market perspective, micro-credentials are to be viewed as part of the evolving post-secondary market landscape and as such we have merged online degrees and micro-credentials in this update as we see this combined view as closer to how a student/learner sees their potential options for digital post-secondary options.
Our published market size estimate for the Online Degree Market in 2019 was $36B and $9.9B for Micro and Alternative Credentials. As we merged these estimates to form our combined baseline of $45B in 2019, we identified a number of overlapping micro-segments and definitions relating to sub-bachelor programs, post-graduate diplomas, University issued ‘certificates’ and employer-sponsored higher education programs. These types of programs have varying levels of formal recognition in national qualification frameworks around the world, some clearly in the ‘degree’ category and others sitting outside the ‘degree’ segment. Consequently, we identified just under $1B in 2019 that would be double-counted by combining the two, hence our $45B estimate for 2019 for the Global Online Degree and Micro-Credential Market.
Our ‘pre-COVID’ outlook for Global Online Degrees was $74B and in our most recent work, we did not provide a precise outlook for micro-credentials, other than noting we expect micro-credentials to double in total expenditure by 2025. Quantifying that assumption to approximately $20B of Micro and alternative Credentials by 2025 and adding this to our prior $74B Online Degree estimate, our ‘Mid-COVID’ outlook upgrades the combined market by more than $20B to reach $117B by 2025.
When compared to the total global post-secondary market of $2.2T, some will see this outlook as ultra-conservative. We’ve made assumptions on the enormous impact of digital on ‘campus-based’ programs and remind ourselves how heavily the average six years of undergraduate tuition (for four-year degrees in the US, which is by far the largest dollar-based contributor/expenditure to the global outlook), weighs against much shorter post-graduate programs which are more prone to substitution from micro and alternative credentials and become ‘fully online’ at a much faster rate. The US is also the most expensive post-secondary market globally by a wide margin which further weighs on our overall market size. China and India dwarf the US and other markets on an enrolment basis, however the price per program is many multiples lower and as such are well behind on a dollar basis.
Our assumptions would be more aggressive for the 2025-2030+ period but we are reluctant to quantify our expectations out that far until we see consumer and institutional behaviors for Fall 2021 and perhaps Fall 2022 as a momentum/inflection indicator.
The chart below shows a year by year ‘pre-COVID’ vs ‘mid-COVID’ comparison, with notes on some of the major consideration forces driving the baseline and outlook.
Bootcamps are directing more resources B2B and B2G, OPMs are growing existing partnerships further and evolving their technology and healthcare programs.
Experience the advanced technology at HolonIQ that is powering decisions that matter for the world’s most forward-thinking nations, institutions, companies and investors.
Explore key topics and event recordings from our latest deep dive into Digital Transformation in Higher Education.