Edtech Investment Could Reach $252 Billion by 2020, If The Industry Can Solve a Few Major Issues

Edtech is set to bounce back from a slight deceleration in 2016 after investment in the segment hit record highs in 2015. In a Techcrunch article entitled “Edtech is the Next Fintech,” David Bainbridge, the CEO and founder of Knowledgemotion, suggests the market presents a startling $5 trillion opportunity globally per annum. Edtech investment is expected to reach $252 billion globally by 2020 as digitalization transforms the outdated industry. As tablets and computers replace students’ paper notebooks, and textbooks are exchanged for more personalized and efficient interactive services, teachers are ditching the blackboard for high-tech screens.

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Investors highlight the relatively stable nature of the edtech industry, unlike the volatility of the financial markets which face pressure from the broader geopolitical landscape. Yet while edtech may be positioned to be one of the largest and most profitable digitalized sectors, it doesn’t come without its slew of issues.

Many have cautioned on the negative relationship edtech can create between teachers and edtech companies, who are seen as trying to build technology that replaces the educator. While the human instructor can not be left out of the equation all together, there is also the fear that they will become brand ambassadors for private tech companies. Instead, finding a middle ground, Jamie Candee CEO of Renaissance Learning suggests that companies should seek to make teachers a part of the design process. The cloud-based K-12 education software company seeks to add feedback loops with educators in their development update cycles, offering teachers the ability to comment and critique.

Another issue facing the industry is making sure that district officials conduct a thorough investigation into whether products actually work. In response, many investors have made a point to find companies that can prove “the return on investment equals the return on education,” as such an alignment is critical for the long-term success of the industry. In the edtech industry, business must quantify the economic impact of additional access and improving performance between grade levels.

Despite these hurdles and larger skepticism over whether products actually improve learning, the industry is set to continue skyrocketing as the student population is projected to reach 2.7 billion by 2035. Moving ahead, we can expect startups to continue disrupting, proposing new technology integrated with virtual reality, smartphones, artificial intelligence, and more.