Micro & Alternative Credentials. Size, Shape and Scenarios - Part 1

Four Scenarios and the $10B Micro and Alternative Credential Market


Micro and Alternative Credentials are a fast growing segment of digital post-secondary learning.

As drivers for change in post-secondary education strengthen, micro-credentials are set to play a critical role in supporting ongoing learning and up-skilling, both within and outside traditional providers of education and training.  While the space is still forming, and multiple models and approaches abound, there are clear signals of emerging standards, definitions and recognition of micro-credentials. This, along with digital infrastructure to support adoption at scale, is likely to lead to broad acceptance of micro-credentials sooner rather than later.

$2.6T was spent in 2019 on post secondary education and workforce training and up-skilling.

Formal degrees are by far the largest component of the overall post-secondary education market with a total spend of $2.2T in 2019 (pre-COVID). Made up of mostly face-to-face learning (pre-COVID) in formal, assessed, accredited qualifications, tuition deflation pressure and changing demographics are gradually compressing this enormous market. COVID-19 has precipitated change and accelerated the fully online degree market, which stood at $36B in 2019. Although growing fast, the global alternative and micro-credential market still only accounted for $10B in 2019. 2020 initiated explosive growth and a key question for the future is to what extent the traditional in-person degree market will be supported by, transformed into, or replaced by, online degrees or alternative and micro-credentials?

'Micro' and 'Alternative' to what?

Post-secondary education has traditionally been dominated by a long-form learning model, comprising of carefully curated, sequenced and selected curriculum, aggregated to form a body of knowledge considered appropriate for one’s future role or profession. The size of standard qualifications is typically constructed by calculating the ‘hours of learner effort’ and organized into smaller modules, with generally agreed standards on the overall size and level of learning for each qualification type. However, traditionally these smaller modules (subjects, units, courses, classes) have not been credentialed/recognized independently from their whole (beyond ‘credits’), thus vesting control in the ‘supplier’, rather than the learner.

New, alternative forms of learning and verification are gaining credibility.

There is plenty of debate about the extent to which traditional post-secondary education models can adequately support the rapidly changing requirements of industries, professions and jobs. In an environment where the rising cost of degrees and formal education outstrips government and individuals’ ability to pay, a plethora of pathways, alternatives and substitutes has arisen over the past 5-10 years, alongside the speed of change in skill requirements. However, it remains a messy and complex landscape of providers, options and models.

A spectrum of options to support knowledge and skills acquisition.

Defining the Global Micro and Alternative Credential Spectrum, beyond government-led qualification frameworks, is not straightforward. Different stakeholders bring very different perspectives, and this segmentation is by no means exhaustive.

We’ve segmented the contemporary post-secondary knowledge and skills acquisition market from peer-to-peer, short courses and badges through micro and alternative credentials to formal degrees. Expect these boundaries and segments to further blur, merge, split and fold.

Learners, companies and governments currently spend at least $10B each year on Micro and Alternative credentials. The market will double in 3-5 years with the medium term growth rate heavily dependent on which scenario gains the most traction.

HolonIQ has developed a proprietary methodology for market sizing, combining our ‘top-down’ global education economic model, powered by insights from market experts from around the world, with cutting-edge ‘bottom-up’ machine-learning driven revenue estimates for tens of thousands of institutions and firms.

We combine our detailed market sizing model covering over 50 segments from our Global Learning Landscape across 8 major economies and global sizing with firm by firm, organization by organization revenue estimates and assumptions about the long fragmented tail.

These initial estimates are likely conservative as they are based on identifiable expenditure/revenue and moderate ‘tail’ assumptions. Company and organization examples are illustrative only and not exhaustive.

4 Scenarios explore a range of possible futures for post-secondary knowledge and skills acquisition

Predicting how any market might evolve is fraught, however there are signals which point to one or a number of possible future states based on how different combinations of key drivers could influence the shape of post-secondary education. Using these market signals, HolonIQ has identified four possible scenarios for post-secondary credentials, along the two axes of ‘market’ versus ‘government’ endorsement/regulation and funding, and the extent to which learning is delivered and recognized in aggregated or unbundled/’micro’ formats.

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Alternative and micro-credentials have emerged over the past five years in response to the increasing need for smaller, more frequent and more focused learning opportunities that attract academic or industry recognition. However, this space is still in a formative state with no universally agreed format or definition, and with many participating actors and emerging models.

This session provides an overview of HolonIQ’s comprehensive analysis of the alternative and micro credentials market globally, including definition and market segmentation and analysis of the likely future role of micro-credentials in the post-secondary landscape.

Where is this data coming from?

HolonIQ is the world's leading impact intelligence platform. We support governments, institutions, firms and investors, with data insights to power decisions that matter. If you are not already a client, request a demo to learn more about our platform.
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