Venture Capital Investment in Education Technology

Global investment in education technology has grown rapidly over the past decade, benefitting from over $32 billion in venture capital funding. Education companies offering innovative digital content and services have proven to be attractive assets garnering ongoing competition by investors. In the last decade, these businesses traded on the promise that the traditional methods of learning would be at most, upended by new technologies, and at least, heavily complemented by them.

According to a report by Holon IQ, venture capital investments in education technology (“edtech”) totaled approximately $500 million in 2010. A decade later, edtech venture capital attracted nearly $4.6 billion in the first half of 2020, positioning the sector for a record-breaking investment year. No doubt, technology is accelerating across every industry, but especially in education as schools, colleges, students and families attempt to engage and maintain learning continuity in an isolating COVID-19 environment. Looking forward, Holon IQ projects the cumulative investment in the edtech sector to nearly triple to $87 billion by 2030.

Venture capital investment in the pre-K-12 to adult workforce education sector hit a peak in 2018, followed by over $7 billion in venture capital funding in 2019. China remains the top recipient of funding, with U.S.-headquartered companies attracting the majority of remaining capital.

Global spending in education is driven by a couple of factors:

  • Emerging markets such as Latin America, Southeast Asia and Africa are rapidly growing and looking to improve educational outcomes for large, underserved populations. By 2025, the primary-, secondary- and university-level student base is expected to grow by half a billion, driven primarily by population growth in developing countries. The scale, quality and speed required to deliver this instruction will undoubtedly involve technology.
  • In developed economies, technology is already used to support learners, teachers and school decision makers. Education technology has become especially important in the COVID-19 environment as schools implement newer asynchronous, remote and hybrid learning models.

The overwhelming demand for better communication tools and learning products should sustain a continued increase in investment over the back half of 2020. Beyond that, more advanced technology learning applications are expected to hit their strides by 2025 with augmented and virtual reality and artificial intelligence becoming more integrated into core education delivery and learning processes.

MHT Partners, a leading education investment bank welcomes further discussion: Rebecca Bell (rbell@mhtpartners.com), Shawn D. Terry (sterry@mhtpartners.com) or Alex Hicks (ahicks@mhtpartners.com).

Source: HolonIQ

Can Higher Education Remain Status Quo Once COVID-19 is Contained?

The coronavirus pandemic is accelerating change across nearly every sector of the economy from healthcare to retail. The same is true for education as colleges and universities have been forced to transition to online learning and rely on technology as the sole means for instruction. One question that students and spectators alike are asking is whether these institutions view this involuntary transition as a temporary issue or a catalyst for a new method of learning that could better benefit students in the long run.

The traditional higher education path has historically looked like this … universities annually attract new students, expand their endowments, and reinvest in their physical campuses, teaching faculties, and extracurricular programs. Teaching methods and instructional approaches have largely remained the same. All the while, tuition prices have increased exponentially, despite the bachelor’s degree offering remaining relatively the same. Offerings between institutions have also become more standardized, and differentiation more often lies in athletics and student amenities, as opposed to the curriculum or degree programs themselves. Coupled with the mounting student debt required to achieve a bachelor’s degree, the ROI of a college degree is a far cry from what it used to be. Students have never had the power or influence to mandate a change in teaching methods and the cost of college . . . until now.

There is significant need for low cost, online learning tools and curriculum. Moving instruction online can enable the flexibility of teaching and learning anywhere, anytime. Despite research showing otherwise, online learning carries a stigma of being inferior to face-to-face learning. True, taking courses online from the kitchen table with no campus environment, no new life experiences or social connections instinctively feels like a lower quality product. Yet, it should be fair to say that emergency remote teaching is not the equivalent of a well-planned, online learning course. While most universities had no trouble pivoting to online instruction, many instructors modified their course agendas to one that was reasonably achievable in a remote setting. While forced moves to remote learning regrettably could seal the perception of online learning as lower quality, when done intentionally and purposefully, the online format can create cost and scale advantages that are unachievable by traditional methods.

Though an unplanned pandemic is no fault of universities, it gives the customers a great deal of time to reflect and weigh their options. Already, many college students and prospects are reconsidering plans for next school year. As a result, the uncertainty of enrollments is sure to create financial pressure for universities, which may force them to reconsider their offerings and related tuition prices. Nearly every institution expects to see increased attrition due to students faced with financial inability to return to school, dissatisfaction with the remote learning experience during COVID, the desire to remain close to home, or a combination thereof. Students are unlikely to cough up top dollar in the long run as a result of these dynamics and the prospect of continued remote learning.

All of these influencing factors have created a breeding ground for substantive change in higher education. While ROI and scalability issues have been deliberated for years, these discussions will be accelerated due to the pressures created by the COVID pandemic. At a minimum, institutions should be cautious to focus on how quickly business can resume as usual. Instead, they should be asking themselves how they can adapt and innovate to better serve their students in the next several decades. Alterations to the higher education degree in the form of a cost-effective, high-quality experience will be required for the long-term survival of these programs.

MHT Partners, a leading education investment bank, welcomes further discussion on the effects of COVID-19 on the education industry: Rebecca Bell (rbell@mhtpartners.com); Shawn D. Terry (sterry@mhtpartners.com) or Alex Hicks (ahicks@mhtpartners.com).

COVID-19 Presents Challenges to Equitable Learning

A few weeks ago, we wrote about the critical role of education technology in the midst of the COVID-19 pandemic. With little-to-no time to prepare, schools across the country shuttered their doors and have attempted to shift classroom teaching to remote learning, without any precedent. Digital learning programs that have long been powerful tools for supplemental instruction are proving to be increasingly important in maintaining instruction during these extended school closures. That said, districts are confronted with different challenges in implanting distance learning which begs the question: Will the responses to COVID-19 end up privileging wealthier school districts thereby widening the gap for students in districts with limited access to technology and resources?

Education has evolved tremendously from the traditional methods of teaching from a decade ago. Namely, digital learning in the classroom is much more pervasive today and is used to deliver both supplemental and basal content. In districts where one-to-one learning has already been implemented, teachers and students are already accustomed to digital devices in the classroom. Thus, the transition and use of these devices and learning applications from home is not an entirely new concept. By lifting of take-home restrictions of devices, districts with one-to-one capability have been able to put devices in the hands of every student, allowing for continuity of learning for even the youngest learners. Though students are no longer sitting in a chair in a classroom led by a teacher, they are being instructed to interact and respond to digital content in a meaningful way. This engagement is absolutely happening in an online environment, which suggests that virtual learning in some districts is occurring successfully!

On the other hand, not all school districts have access to the best resources, whether fiscal, technological, or personnel in nature. Shifting education into the online realm from home has proven much more challenging for districts with partial availability of devices and internet connections at home. The timeline for instructional continuity for districts with fewer resources has proven to be longer. For districts serving a portion of the 30 million students who qualify for free or reduced lunch programs, remote learning has taken a back seat, at least initially. These districts spent the first weeks of closures prioritizing and streamlining distribution of food and meals to students. Upon ensuring students were being fed, these districts then turned attention to solving the problem of implementing learning from home. Yet, uphill challenges emerged in this area as well, forcing districts to get creative in bringing the classroom to the home. Approximately 5 million students lack internet access at home, due to low income or rural living situations. Education officials in South Carolina have resolved such issues by utilizing idle school buses, equipping them with wifi and parking them in specific neighborhoods to bring connectivity to these homes. However, connectivity is only useful if students have a device to go with it. In districts with fewer devices than enrollment, typically older students received priority in obtaining a loaner device. This leaves many households sharing a single device among siblings, which creates time constraints for each learner. As a last resort, a number of districts have gone “back to the basics” and send home paper packets and activities that do not require internet. That said, this approach is not particularly interactive, nor does it represent the gold standard of learning. Finally, there are teachers who are suddenly required to reimagine instruction and assignments in a digital and remote setting. Numerous challenges are presented including the varying levels of technological expertise by the individual teachers, as well as parents and students themselves. As each district does its very best to overcome the challenges presented by COVID-19, it’s apparent that there is no “one-size-fits-all” solution.

While it is too soon to determine whether COVID-19 will result in wider learning gaps for U.S. students, on the surface, we see that different districts have dealt with different priorities depending on their student demographic. No doubt, on the surface it appears that students with greater internet connectivity, familiarity with technology for learning purposes, and in-home availability of books and materials will have much higher probability of benefiting from remote learning during social distancing. These advantages are further pronounced by the fact that schools that have implemented digital learning in the classroom for many years prior to the pandemic have teachers that are inherently more prepared to teach remotely. One thing can be certain, the longer schools remained closed, the more likely equity in K-12 learning will deteriorate.

MHT Partners, a leading education investment bank, welcomes further discussion on the effects of COVID-19 on the education industry: Rebecca Bell (rbell@mhtpartners.com); Shawn D. Terry (sterry@mhtpartners.com) or Alex Hicks (ahicks@mhtpartners.com).

Recessionary Impact on Education: 2008 Versus 2020

In the past two months, the U.S. saw a sharp 35% decline in the equity markets driven by the COVID-19 pandemic as well as global oil market turmoil. By comparison, the 2008 Great Recession saw a nearly 50% drop in the markets due to the collapse of the housing market. Despite having very different catalysts, both recessions resulted in sweeping impacts to most sectors of the broader economy. Let’s look at how 2008 impacted the education sector and whether we should anticipate similar effects in 2020.

Following the Great Recession in 2008, the 2009/2010 school years marked the first time in 50 years when education spending contracted nationwide. K-12 spending declined from $610 billion to $601 billion from 2010 to 2012* and did not exceed 2009 levels again for five years. The greatest impact on schools and students occurred from 2010 to 2012, representing a noticeable delay from the effects felt by the general economy. How so? A couple of variables were at play.

  • First, federal stimulus funds provided nearly $100 billion to the Department of Education with the purpose of delivering emergency funds to states. Nearly two-thirds of that money was awarded by late 2009, which then buffered education budgets through 2010. However, the expiration and roll-off of these funds in 2011 and 2012 were then felt throughout the U.S. education system.
  • Tax revenues directed toward education by state and local governments also influenced the delayed effect on education. State tax structures vary widely, driven primarily by sales and income taxes, while local budgets are supported primarily by property taxes. Assessed property values often lag market values, which helps to support property tax revenues in a recession, at least initially. However, in a multi-year recession, property values and corresponding tax revenues will eventually decline. This funding dynamic upheld education funding at the local level during the worst years of the Great Recession. Consequently, the education market was subsequently impacted in an “echo fashion” and to a lesser degree than the broader market from 2010 to 2012. School budgets tightened due to the ongoing decline of local tax receipts and without additional federal aid.

So, will the COVID-19-induced recession in 2020 have the same effects on education as those seen in 2008 through 2012? First and foremost, it is generally understood that faster falls of the economic markets lead to shorter recoveries. So far, the 2020 bear market is less extreme in percentages, but the month-long window of declines is also much shorter in comparison to the slow and steady 16-month decline from mid-2007 to early 2009. While no one can predict with certainty if the bottom has already been reached, the steep drop in the markets thus far are much more sudden than in the prior Great Recession. While sales and income tax revenues will certainly be impacted by the COVID-19 pandemic, assessed home values and associated property tax revenues are less likely to be affected if the recovery occurs within one year, which suggests education funding will also be less impacted.

Furthermore, the 2020 CARES Act earmarked over $43 billion in stimulus funding for education, with approximately $14 billion dedicated to K-12. This figure represents a fraction of the $100 billion in education funding from the American Recovery and Reinvestment Act of 2009 (“ARRA”). When we refer back to the time span of the Great Recession, a majority of ARRA education funding was intended to shore up state funding for public schools. It was a tremendous cost to restore the total level of public education funding for 2010, 2011 and 2012 to that of 2008 and 2009 levels. Education experts question whether $14 billion in federal stimulus is enough for sustained support of weeks, or potentially months, of school closures. That said, there may be potential for additional funding for education in future phases of the stimulus package if they occur.

As the saying goes, ‘only time will tell.’ If this recession lasts only a matter of months, public education spending may not see any decline at all. The question is less about whether public education funding will survive this economic downturn, but how far the government will have to step up to maintain status quo for students across the U.S.

Source: NCES, Department of Education

Will Online Learning Become the New Norm?

Over the past few weeks, schools and universities across the nation have shut their doors and have transitioned to online/virtual classrooms. Students and educators – many with no prior online learning experience – are suddenly forced to implement and adapt technology into their regular teaching and learning routines. Experts are questioning if the end to the COVID-19 pandemic will also signal a return to the traditional classroom, or has the meaning of “classroom” been permanently altered? The traditional definition of “classroom” – a room where learning takes place – is no longer simply associated with desks, chairs, a white board, a teacher, and pupils. Technology platforms such as Zoom have allowed a bedroom, a couch, a backyard, or a dining room table to become students’ new place of learning. Although teachers and students should certainly be applauded for the rapid transition to remote learning, the crucial question is whether the online learning model is a sustainable and viable replacement for the traditional schooling system?

In a recent study, conducted by Eduventures in December 2019, 61% of college-bound high school students with online learning experience said they prefer to take all college courses on campus. While 22% of surveyors with online learning experience said they prefer to take some online college classes, less than 1% of surveyors said they prefer a fully online experience. (1) The data seems to point to the fact that although remote learning is deemed as an invaluable system to mitigate the global pandemic’s disruption on academic progress, it does not seem to be a feasible replacement of traditional education, which also tends to foster personal development and interpersonal skills. However, as students and teachers become more comfortable with the digital format, it is likely to become an important supplement to traditional learning across all educational institutions, allowing for greater flexibility in addressing students’ academic, financial, health, and personal needs. For example, middle schools and high schools could start offering more online courses to augment learning for advanced students as well as provide more tools and tutorials for assisting struggling students. Colleges can use online classes to expand enrollments for essential prerequisite classes, thereby increasing the percentage of students that graduate on time while alleviating some of the financial burden of students.

Further, the inequalities in America’s education system have been reemphasized by the COVID-19 pandemic as schools and universities scramble to provide internet access and computer devices for all of its students. The pandemic will help accelerate the implementation of infrastructure for distance learning across the industry. It will provide a strong foundation for education technology companies to build on and will allow them to integrate remote learning as a supplemental tool to traditional classroom schooling.

(1) https://encoura.org/generation-distance-will-traditional-students-embrace-online-learning/
https://www.insidehighered.com/digital-learning/article/2020/03/18/most-teaching-going-remote-will-help-or-hurt-online-learning
https://wtgrantfoundation.org/library/uploads/2015/11/The-Future-of-Educational-Inequality-Adam-Gamoran.pdf

K-12 Education Technology in the Midst of COVID-19

In this time of economic turmoil triggered by COVID-19, the demand for education technology (“edtech”) solutions is at its peak. With more than 30 million K-12 students ordered to stay home, online learning has become the new normal. In the past, online learning was a luxury but now plays an essential role in enabling educators to teach, allowing students to continue to learn and grow during this unprecedented crisis.

Prior to COVID-19, many K-12 schools and districts made great strides in working to blend edtech solutions into regular classrooms. However, these incremental efforts have proved to have limited impact in light of the sudden disruption. Educators and school districts are in a panic as they scramble to digitalize nearly a full semester of content for students in every grade. What they foresaw education becoming over the course of time has become the required solution now. Luckily, the demand for these technologies is fully supported by progressive minded-educators, the government and the rich ecosystem of e-learning providers.

U.S. Congress is implementing various emergency COVID-19 stimulus packages including a $3 billion emergency aid package to support the learning needs for early childhood education and K-12 schools.[1] Realizing that online learning is the new standard, the government has acted accordingly for the sake of all students. One problem that they’ve realized while implementing such aid is that a large percentage of students don’t have a reliable way to get online. Specifically, 14 percent of households with school-aged children do not have internet access, most of which are households with an aggregate income of less than $50,000 a year.[2] As if completely transitioning learning online wasn’t a heavy lift in itself, closing the internet access gap is an added intricacy that that government, educators and providers have tackled head-on. In the past weeks, the Federal Communications Commission has worked to waive late fees for existing internet subscribers and increase data caps for mobile hotspots so that students can have the internet access they need to learn. In addition, internet providers such as Spectrum and Comcast are offering free service for 60 days to new customers with K-12 or college students at home.

Educators and school districts, too, are taking creative measures to smoothly transition learning online and bridge the internet access gap. While some school districts and educators have no concerns surrounding students’ access to online lectures and assignments, others do. Teachers in these types of districts are working persistently to find ways to connect their students to learning content. Solutions like partnering with local TV programs to deliver content, teaching via phone calls and the creation of take-home learning boxes are being implemented. In Los Angeles, districts are partnering with local PBS stations and the city’s district to generate remote-learning initiatives tied to TV programs instead of internet.[2] These collective efforts to close the internet access gap is both bridging the potential longstanding chasm that the COVID-19 epidemic could leave in student’s development and helping cope with the new reality of online learning.

Most importantly, K-12 edtech companies like McGraw-Hill, Cengage, Chegg, Coursera, Instructure and Wiley now play an essential role in educating our country’s students, and they are rising to the occasion. Both Cengage and Wiley have made their digital content free for the remainder of the current school term. In addition, companies like Zoom have lifted the 40-minute meeting limit on their free basic accounts for K-12 districts.[3] At the forefront of the new normal, edtech companies are finding affordable ways to implement themselves into every school district and increase their prevalence as a new backbone to the current education structure and economy, in general.

The implications for edtech in this unprecedented time have shifted drastically.  As online learning has quickly become the new normal for all students, edtech has become a necessity rather than a luxury . . . an essential rather than a bonus  . . . a mainstream commodity rather than a niche amenity.  This will be the way it is for as long as the need for education sticks around, which is forever.

[1] http://blogs.edweek.org/edweek/campaign-k-12/2020/03/coronavirus-aid-package-education-democrats-3-billion.html
[2] https://www.edsurge.com/news/2020-03-20-here-s-what-schools-can-do-for-the-millions-of-students-without-internet-access
[3] https://campustechnology.com/Articles/2020/03/16/Free-and-Discounted-Ed-Tech-Tools-for-Online-Learning-During-the-Coronavirus-Pandemic.aspx?Page=1

The Winning Solutions to Shrinking the Skills’ Gap

In today’s tech-enabled world, it has become more difficult than ever for employees to meet the skillset requirements of employers. Unlike the past, companies have narrowed their recruiting scope away from candidates who simply have degrees to ones who possess practical competencies. These are skills that can be observed, measured and can be applied to perform a specific occupation.(1) The demand for these skills is warranted in a technological world; however, a shortage in competent workers means that these demands aren’t being met. This rising epidemic is what we call the skills’ gap. Today, 4 in 10 college graduates are being overlooked by corporations due to a lack of required skills. These same graduates are earning 30% less annually than their fully employed peers. And, there are more than 7 million unfilled employment positions due to the supply/demand misalignment.(2) This is a problem that heavily affects both the employer and employee, but also one that has broader implications on the state of the economy. But there are solutions:

Solving Problems – this is a five-step process that helps move unskilled candidates into skill-stringent occupations:

  1. Identify the top traits demanded by employers. A lack of understanding accounts for a large percentage of the disconnect between skills demanded and skills supplied. Students are increasingly going through school blindly, not fully understanding what the skill expectations are in the “real world.” Education technology platforms such as Plum.io and Workday are helping to fill that void.
  2. Assess whether applicants meet the skillset threshold. In tandem, if the skills aren’t being met, training must take place.
  3. Train workers to get up to speed with labor market demands. Bootcamp platforms such as Galvanize, Coursera and Skill Share help to equip candidates with missing skills. Contrary to popular belief, training alone is not the most important. In fact, it is useless without the final two steps.
  4. Credential – in today’s stringent job market, employers are reluctant to hire workers unless they both possess skills and are credentialed to be proficient in applying the skillset to perform specific tasks.
  5. Place workers into occupations. Platforms like Credly and Handshake help to solve this piece of the puzzle.

Supporting People – a support system has been deemed as one of the basic requirements of human existence, which also applies to people in the job market. In fact, in the continuously changing job market, support has become more crucial than ever. There are three steps that ensure a support system is in place to help fuse the skills gap, all of which can be found in technology platforms:

  1. Financing – how are candidates paying for programs that equip them with the required skills? Income Share Agreement Programs such as Vemo Education and MeasureOne are accepting tuition as a percentage of expected postgraduation income – with no payment required if training doesn’t lead to a good job.
  2. Mentorship and 3. Administration fuel the supporting process as they allow candidates to learn how to balance education, recruiting and personal lives while also helping them track the progress they’ve made towards reaching their goal of employment.(2)

The solutions to shrinking the skills gap have been revealed. Ultimately, identification, assessment, training, credentialing and support must take place to fully invoke change. The good news is that there are numerous education technology platforms already in place to help expedite these processes, and once they are executed, we will start to see a bridge in the skills’ gap and a healthier labor market.

Feel free to reach out to a senior member of our education team to learn more: Alex Hicks (ahicks@mhtpartners.com) or Rebecca Bell (rbell@mhtpartners.com).

[1] https://www.uschamberfoundation.org/
[2] The Re-Skilling Imperative: Trends in Solving The Looming Skills Gap – Talent Tech Labs

The Time is Now . . . Selling Opportunities for Edtech Companies

The demand for education technology (“edtech”) has increased drastically in the last decade amongst schools and corporations. In 2019, investments in edtech companies in the U.S. reached $1.66 billion – a 16 percent increase from 2018(1). Digitization has made the progression and steady implementation of edtech crucial in helping students and employees thrive in the classroom and the everchanging workplace. Investors are realizing this, driving them to invest more time and money in these companies in order to help advance initiatives and increase scale. Continued investment in the sector is an encouraging sign for entrepreneurial companies, ensuring the capital required to develop new innovative technologies and strategies. More importantly, favorable 2020 expected buyer demand, promising industry trends, and aligned strategic initiatives point to a time in which selling opportunities for edtech companies are ideal. That time… is now.

Expected buyer demand in 2020 is more favorable than ever for the edtech industry. After a record-breaking 2019, buyers are eager to invest in the education space as it proves to be the bridge among students, professionals, corporations, and the digital transformation process. The increasing buyer attraction is underpinned by the robust capital available for acquisitions (dry powder) in 2020. According to a survey conducted by Equiteq, 84 percent of financial buyers and 93 percent of strategic buyers are expecting the amount of capital available for M&A to increase or stay the same versus the last year. Two major factors contributing to this include an overall decline in interest rates and a rise in capital providers’ propensity to invest in a historically profitable market.(2) Furthermore, buyer demand is growing in sync with digital transformation. With the rise of technologies like big data, artificial intelligence and virtual reality, financial buyers see an opportunity to expedite the process by increasing the scale of edtech platforms. Similarly, strategic buyers are looking to acquire companies that augment their ability to meet vitalizing consumer demands or provide continuous training for their employees.

There are a couple other notable trends driving increased traction. One of these pertains to the closing gap between education and the workforce. Eight of the top deals in 2019 involved companies that offer educational services to employers and employees for purpose of retention or internal upward mobility. Those eight companies – Guild Education, BetterUp, Coursera, Andela, Degreed, MindTickle,EdCast, and A Cloud Guru – accounted for 39 percent of edtech investing in the past year.(3) Because of changing consumer demand, corporations are allocating more time and money to training platforms that enable their employees to continuously build the technical prowess needed to create differentiated customer experiences. In addition, the talent shortage among digital companies makes retention of talent a key component in ensuring the competitiveness of a company in its respective end market. Most importantly, the blurred line between higher education and the workforce presents a large market for edtech to penetrate, which buyers view as a significant investment highlight.

Another trend positively driving buyer demand is the unprecedented rise in the capabilities of edtech, largely driven by what many call the new industrial revolution or “Rise of the Machines,” which is the convergence of multiple advanced technologies like artificial intelligence, dig data, data science, robotics and virtual reality. The fusion of these technologies has fundamentally altered the way we live and work while also magnifying issues in our current education system. Edtech has begun leveraging these unique technologies to create high-quality learning experiences for all age groups.(3) However, the developments are still in infancy, presenting even more opportunity for edtech companies and buyers to capitalize.

Alvin Toffler, an American futurist and author once said that the “illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.”(3) In a world that is more digital than ever, edtech has become the focal point amongst educators, professionals and corporations as they seek innovative learning platforms that deliver results, create opportunities and offer dynamic skillsets. Because of this, the market has seen exponential growth and is highly sought after by buyers/investors. As 2020 kicks off, there is no doubt that the edtech industry is on top; no doubt about increasing buyer demand; no doubt about favorable industry trends. In the same sense, there should be no doubt on when the best-selling opportunity is. Because that time is now!

Sources:
[1] https://www.edsurge.com/news/2020-01-15-us-edtech-closes-decade-with-record-1-7-billion-raised-in-2019
[2] The Knowledge Economy Global Buyer Report 2020 – Equiteq
[3] https://www.edsurge.com/news/2019-12-30-the-past-decade-forecasts-a-new-wave-of-economic-opportunity-in-education

The Use of Technology in Higher Education

As the world digitally evolves, education technology (“edtech”) continues to proliferate, increasing the impact it has on learning. The growing exposure of students to technologies in various aspects of their lives has caused a noticeable shift in the way students learn and retain information. As a result, institutions have begun to rely on technologies such as big data, cloud computing, artificial intelligence and virtual reality to carry out their initiatives to differentiate learning experiences and implement unique, adaptive curriculums. In addition, the technologies are being used to recruit students, predict dropout rates, track student successes as well as help to improve operational efficiency, which ultimately drives growth, increases revenue and reduces costs. While campuses are certainly becoming smarter, many are seeing that implementation of these technologies doesn’t automatically result in improvement. Layering technologies over inefficiencies can be compared to a person buying the incorrect batteries for a TV remote – it simply doesn’t work, though well intended. The same logic must be applied when administrators and educators implement technologies on their campuses. With any luck, stakeholders will take the necessary steps to ensure adoption and utilization that are required to increase students’ performance and differentiate their college experiences.

The use of edtech on campus has created additional growth opportunities for students and schools. According to Educause, a renowned education non-profit that advocates for edtech use in higher education, the use of big data, cloud computing and online learning platforms are among the most important technology-driven changes in higher education. Colleges and universities are finding new, creative ways to utilize the data including but not limited to recruiting students and predicting dropouts by monitoring the data once the students are enrolled. The adoption of these new practices allows institutions to understand the changing habits and needs of their students and proactively create, implement catered curriculums, and differentiate learning experiences. In addition, institution leaders can grow their campuses by using data to attract and retain students and top-notch instructors.

Technologies like artificial intelligence and virtual reality are also expanding rapidly into higher education as they are giving college administrators innovative ways to track students, teach students and create smarter, more efficient campuses. The combined use of big data and artificial intelligence is becoming a dominant force on campus as educators seek to carry out advanced initiatives and implement technologies that are catered, adaptive and dynamic. Virtual and augmented reality tools are helping to take these initiatives to the next level by providing students with experiences that would be “otherwise too expensive or even impossible to replicate in the real world.”1 For example, Hamilton College utilizes these tools to change the way their 1,850 student liberal arts program teaches human anatomy. Students use virtual reality applications to record themselves explaining sections of human anatomy, enhancing the students’ critical thinking and oral communication skills. The learning capabilities of big data, artificial intelligence and virtual reality tools are endless. And – quite frankly – unmatched when you factor in their ability to drive growth, increase revenue and cut costs.

With all new things, though, there is a potential for misuse. While not intended, misuse is a latent problem that applies to the capabilities of emerging education technologies. The intricacies of these technologies must be closely examined before use on a campus, or they could be just as useless as “Triple A” batteries bought for a remote that requires “Double A.” Yes, the intent is there; however, intent alone doesn’t lead to results.

Christopher Brooks, director of research for Educause, said it best when speaking on the implementation of technologies in higher education. It truly does take “a village to get a 3D project off of the ground.”1 Implementation is not a single action, yet it is goal-oriented strategy that seeks to solve a set of problems at the core. This rationale must be kept in mind by administrators and educators in order to unlock the potential of emerging education technology which is needed to differentiate learning experiences and spark student improvement.

We welcome further discussion on this and other trending topics in the education space. Feel free to reach out to a senior member of our education team: Alex Hicks (ahicks@mhtpartners.com) or Rebecca Bell (rbell@mhtpartners.com).

(1) https://www.educationdive.com/trendline/emerging-technology/15/

Is Vocation the New Motivation?

Students around the world are investing greater amounts of time in their studies and application processes in order to get into colleges that will ultimately grant them a bachelor’s degree, which is seen by the world as the “golden ticket” to financial freedom and job security. While a bachelor’s degree does grant access to a wider pool of job opportunities by way of showcasing the student’s intellectual credentials and determination to complete a four-year degree program, students are now realizing that their bachelor’s degree does not guarantee a job offer. In fact, a degree is not a golden ticket, but more comparable to a raffle ticket in that students are paying loads of money for an education where there is no guarantee of security or qualification in a changing job market. As more students realize the qualifications companies require, especially specific skillsets, students are becoming less incentivized to obtain the traditional 4-year college degree, causing a shift to nondegree training or certification programs. This raises the daunting question: Is vocation the new motivation?

According to a 3-year consumer survey (conducted by Gallup and the Strada Education Network) graduates of nondegree vocational programs said that their postsecondary credentials were worth the cost and made them an attractive job candidate more often than graduates of terminal bachelor’s degree programs. Among respondents who were graduates of nondegree vocational programs, such as certificate or nondegree training programs offered by two-year colleges, 70 percent agreed that their education was worth the cost, compared to 62 percent of graduates of terminal bachelor’s degree programs. That gap widened among respondents who agreed strongly: 57 percent of vocational and technical graduates compared to 40 percent of terminal bachelor’s degree holders.

In addition, the survey also analyzed responses based on fields of study, uncovering that majors directly associated with specific jobs received higher “self-reported” value. For example, graduates who received degrees in healthcare/medical-related fields expressed that their education was worth it in terms of both cost (52 percent) and job availability/training (72 percent). On the other hand, graduates in the liberal arts were less optimistic in their responses, with 34 percent strongly agreeing that their degree was worth the cost and 36 percent agreeing that it would benefit their career. It is crucial to note that many of the nation’s top institutions such as Harvard College, Stanford University, Williams College and Amherst College are liberal arts oriented, illustrating that reputation does not mean success in the increasingly competitive job market. Below is a chart depicting the cost value vs. career value that respondents believed they received from their respective degree majors:

As supporting evidence, technology companies are increasingly filling higher paying jobs that do not require a degree. Google, arguably one of the most successful technology companies, announced the expansion of its training program at the community college level on October 16, in an effort to ensure that students are “work ready.” By doing this, Google is making students more marketable, while opening the door to a stream of high paying jobs without a degree requirement. In Dallas, the IT industry is at the top of the list in terms of growth with jobs in the field boasting an average pay of more than $80,000 a year, which is more than the median salary for a professional with a bachelor’s degree at $70,000 a year.

The shift in job requirements from college degrees to having a set of skills that is applicable to a specific role is astounding. The view that “one must go to college to be successful” has been increasingly mitigated as more and more students find they are not the most attractive job applicants post college. That is not to say that a college degree doesn’t hold weight, but more that degrees in specific fields like medical, engineering, and finance yield better results in the job search process. In a world where technology is advancing, vocational roles that can keep up with consumer demand are a must and are the new motivation.

Feel free to reach out to a senior member of our education team to learn more:  Alex Hicks (ahicks@mhtpartners.com) or Rebecca Bell (rbell@mhtpartners.com).

[1] https://www.fox4news.com/news/tech-companies-trying-to-fill-higher-paying-jobs-that-do-not-require-a-degree
[2] http://www.insidehighered.com/quicktakes/2019/11/18/survey-graduates-value-credentials