Venture funding for EdTech is booming this year, with CB Insights projecting that there will be a 24 percent growth over last year, with close to $3 billion in total funding. At the center of that growth is a group of entrepreneurs and innovators working together to improve the education industry, increase access, and reduce costs. With an influx of capital comes amazing opportunities for innovators to launch profitable ventures while optimizing the education system.
The education industry is poised for massive disruption by innovative thinkers and entrepreneurial spirits. Most people agree that education is the key to helping people achieve and that it should be affordable and accessible. That, combined with an increase in the number of technologies that can be easily adapted to solve problems in the education sector, is why the EdTech space has experienced such sudden growth.
One of the biggest investors in EdTech, Bill Gates, shared at an ASU GSV Summit, “Our foundation’s going to do everything we can to help facilitate the creation of great technology.” With institutional investors like Gates signaling commitment to the industry, this year’s growth is probably the start of a much larger trend.
Making Education More Cost Effective
Let’s face it, the cost of higher ed has spiraled out of control, and it’s only getting worse. With the average student loan debt per borrower being around $30,000 and the national loan debt peaking at $1.4 trillion, it’s clear that the biggest opportunity for innovators is offering solutions that reduce the cost of education.
Reducing the cost of textbooks
When we think of rising education costs, we often look at tuition. However, textbooks are another costly addition that rarely gets calculated into overall expenses. A recent study from the University of Florida found that 30 percent of respondents will skip purchasing a textbook due to rising costs. Alastair Adam, Co-CEO at FlatWorld, a digital publisher of textbooks explains, “With textbook prices at $300-400, a number of students buying new books are only doing so because big publishers deliberately update the editions as frequently as possible, in order to constrain the supply of used books.”
Digital publishers like Flatworld are working on solutions that could reduce the cost of textbooks for students, which will lower the price tag of their education as a whole. More and more students are opting to not purchase books as traditional publishers increase prices, but if prices are reduced, that could change. Adam continues, “We think the best approach to solving this problem is breaking down price barriers for students to make textbooks accessible.”
Lowering the overhead for institutions
Technology companies that help reduce overhead for institutions can help them deliver savings down to the student level. For example, IT innovations that offer more affordable enterprise solutions for educators could help significantly reduce costs. Co-working innovations like Slack and Google’s G-Suite are prime examples of how innovators can offer lean technology solutions that help reduce administrative costs.
Since enterprise technology often comes with a price tag somewhere between $100,000 and $1 million, cost-saving solutions like these could help universities cut tuition costs without having to reduce the quality of the educational experience. And by leveraging better digital tools, universities can reach the students through every channel they prefer.
Reducing completion times
Another way to help reduce costs is streamlining the amount of time it takes to complete a degree. Due to challenges associated with classroom size, it often takes students more than the traditional four years to complete an undergraduate program. That means more time away from full-time work and increased tuition expenses.
Digital classroom solutions, however, have the potential to solve this problem, however, as they could increase access to required courses and the number of units a student could take. EdTech innovators who come up with ways to improve the quality of online courses and increase enrollment can help students reach their educational goals faster while helping universities maximize the number of students they can admit.
How to Improve the Industry
A lot of industry experts claim that EdTech is overhyped, and while technology may not be able to change the industry overnight, it can make significant changes. One common misconception is that everything needs to become purely digital, classrooms, textbooks, and perhaps even universities themselves.
Adam details an alternative way of looking at things, “We’ve always operated with a ‘digital first’ mindset, not a ‘digital only’ one. In recognizing the predominance of digital solutions educators can meet student demand, without tossing out tested methodologies.” This is why integration should be a key focus in EdTech innovation.
Instead of throwing out time-honored traditions, EdTech solutions should be built to enhance proven processes and help them transition into the digital age. Companies and institutions that can strike a balance between these two aims will be able to optimize processes and grow their organization.
There are a lot of opportunities for entrepreneurs and problem solvers to create private ventures to support the educational industry. And with the recent surge in capital investment, it’s clear that the education industry is an open field for tech innovation.