Global Perspective: Investment in education technology surges as markets around the world recognise its transformative potential
30 Jan 2019
In an era marked by profound technological disruption and intense global competition in new frontier industries, emerging markets are striving to improve and adapt their education systems to meet the demands of the modern economy and the needs of their citizens. As such, innovative solutions are being developed to address barriers within traditional education systems. Education technology (edtech) is gaining traction worldwide as an invaluable teaching and learning tool.
However, the global edtech movement has been somewhat uneven, its implementation delayed in some developing countries due to infrastructure deficits and tight budgets. Nevertheless, the surge in investment in the last few years indicates the substantial potential for edtech to enhance the quality of education around the world in a variety of ways.
Appetite for Innovation
Edtech companies in developed countries came into prominence in the early 2000s. In the US, the subsesctor’s advent was made possible by the country’s well-developed ICT networks, large economy and successful innovation hubs, such as Silicon Valley. In 2018 the US edtech market was estimated to be worth more than $8.38bn, according to the Software and Information Industry Association. In Europe, the centre for edtech is the UK, home to at least 1000 edtech companies, 200 of which are based in London.
Although the US and the UK are the world’s edtech leaders, Asia has quickly become its fastest growing laboratory. With the largest school-age population, Asia is home to over 600m K-12 students and is the emerging global centre for online education. Many Asian countries have placed a premium on education, and both governments and parents are willing to spend a substantial amount of money on educational services, particularly in developed markets in the region. For instance, parents in Singapore spend more than $70,000 each year, on average, to educate their children, while more than 70% of secondary school students in Hong Kong, Taiwan and South Korea hire private tutors. While parents in the emerging markets of Asia have less discretionary spending power, these countries have a great deal of potential to utilise their burgeoning innovation ecosystems to develop new, cost-effective edtech solutions to improve learning outcomes. For example, Indonesian edtech company Ruangguru was tipped by the country’s Minister of Communications and Information to grow into a unicorn valued over $1bn in 2019, as it rolls out its one-stop learning services app across South-east Asia.