Tag: education

Exciting times for EdTech

I deliberated putting a question mark at the end of that title. Education Technology is a topic of contradictions, and has a history of hype, so it is clearly bold of me to be asserting This Time It is Different. But, maybe this time it is different.

The recent State of Australian Startup Funding 2023 report showed that EdTech is currently out of favour with local Venture Capital firms and Angel Investors. By the end of 2023, the EdTech/Training category had fallen out of the top 10 most exciting areas to watch, behind Deep Tech, Legaltech, and Design/Publish/Collab solutions (see page 25). Additionally, EdTech startups raised $108m in 2023, again outside of the top 10, a reduction from 2022, and less than was raised by cryptocurrency startups (page 24). Angel investors were perhaps slightly more optimistic about EdTech, with the sector reaching position 10 of the top 10 most exciting sectors for 2024 when male angel investors were polled, and yet female angel investors didn’t have it in their top 10 (page 96).

Despite this lack of interest, Australian EdTech-related startups have been doing pretty well recently. Brisbane-based Go1 aggregates workforce learning and development content, and was valued at $3b last year. In 2021, online training startup A Cloud Guru achieved a $2b exit. While not dedicated to EdTech, SafetyCulture includes a training component, and was valued at $2.7b last year. Similarly, cybersecurity firm Secure Code Warrior includes training, and raised US$50m last year, and international student recruitment platform Adventus.io raised $22m. Outside of startups, ASX-listed international student placement and English language testing company IDP Education is valued at around $5.5b. And while it deserves more than a postscript, it’s worth mentioning the Australia-born learning management system (LMS) Moodle with its 377m users, 45m courses, and is one of the top 5 LMSs in North America.

Education is Australia’s largest services export industry, and the fourth largest export industry overall, behind the resources industries of Coal, Iron Ore and Natural Gas. The sector brought in $36b in the most recent year, already back to the level it was before the Covid pandemic. Australia also has prominence in global University rankings. On the current Times Higher Education world University rankings, Australia has 6 Universities listed in the global 100, which is 1/6th of what the USA has, while having less than 1/10th of its population. It’s also more than any of Canada, France, Japan, or South Korea, despite having a smaller population. (Although, special call-out to Singapore, with 2 listings in the top 100 with only 6m people.) If you look at the current QS Top Universities rankings, Australia does even better, with 9 in the top 100.

So, on one hand Australia is a success story, with an ecosystem able to produce wins in both international EdTech companies and selling education itself, but on the other hand, there is relatively little investor interest in backing emerging EdTech companies at the moment. What might make this change?

While there are ongoing trends that have underpinned interest in EdTech for a while, e.g. see this article from 2001 from Archangel Ventures, I see two near-term demand-side forces and two supply-side forces that will drive the creation of new technology solutions in Education.

On the demand side, there is an urgent need to reskill people into the tech sector. In May 2023, the Tech Council of Australia forecast that around 295,000 people would need to reskill into tech jobs, to meet expected demand for 1.2m Australian tech workers by 2030. To put it in perspective, this is approximately twice the number of people they expect to come into entry level roles in the tech industry via Universities. A traditional University pathway, taking 3 or more years out of the workforce to obtain a qualification, will not work for many people. What is needed are faster, high volume methods of reskilling that companies can rely on to produce capable tech workers in areas like data science/analysis, software engineering and product management.

Another driver of demand is due to the recent rise of Generative AI. Most forms of training and education include an assessment component, and Generative AI has been shown to pass a range of academic tests as well as people do. In early 2023, one study found 89% of adult students had used ChatGPT on their homework. By this point, I expect it’s higher. Previously solid tech tools for detecting students copying work from elsewhere are no longer reliable, and can penalise people who aren’t native speakers. It’s not feasible to have everyone go back to doing assignments in person without access to the Internet, either. There is a pressing need for a better way, or the benefit of having qualifications will quickly erode.

On the supply side, coming out of the Covid pandemic lockdowns, a generation of students has experienced the delivery of education mediated entirely by technology. While for many years, a portion of students have experienced distance/remote education, this time it was the whole cohort. Australia, and in particular the states of NSW and Victoria, had some of the most lengthly and/or restrictive lockdowns in the world. For instance, Victorian lockdowns over 2020 and 2021 covered 262 days, and while it caused many issues for students, parents and teachers (some that are ongoing), it also trained every student and educator on what works and what does not. Those people who were receiving education at the time have been coming into the workforce for the past 3 years. In addition, there are all the educators who had been there and done that. There’s nothing like first-hand experience with a problem to help design good solutions. This set of talent will be invaluable in producing new EdTech startups.

In addition to talent is a new supply of capital. Dan at Square Peg Capital has written about how startup success breeds startup success. For instance, when an executive or founder at one business has learned the recipe for success, has made some money, then gone on to help form a new startup. One model is that 15% of outstanding shares may be used in compensating top employees, with shares vesting over four years. Atlassian’s IPO made many early employees millionaires, and there have been a bunch of startups formed off the back of this. Similarly, Canva’s secondary share sale, delayed until this year, is expected to make many employees wealthy, and result in new startups being formed in the visual media space. A Cloud Guru’s 2021 exit will have brought wealth to the founders and early employees. While less structured, both Go1 and SafetyCulture appear to support secondary share sales by employees. As capital is put in the hands of people with a passion for EdTech, it will catalyse the EdTech startup ecosystem.

While I didn’t begin with a question, I think I’ve answered it anyway. Australia is being pushed and pulled in the direction of more EdTech startup success, and it’s going to be an exciting ride in the coming years.

Technology, Finance and Education

Yale Theatre

I have been trying out iTunes U by doing the Open Yale subject ECON252 Financial Markets. What attracted me to the subject was that the lecturer was Robert Shiller, one of the people responsible for the main residential property index in the US and an innovator in that area. Also, it was free. :)

I was interested in seeing what the iTunes U learning experience was like, and I was encouraged by what I found. While it was free, given the amount of enjoyment I got out of doing the subject, I think I’d happily have paid around the cost of a paperback book for it. I could see video recordings of all the lectures, or alternatively, read transcripts of them, plus access reading lists and assessment tasks.

The experience wasn’t exactly what you’d get if you sat the subject as a real student at Yale. Aside from the general campus experience, also missing were the tutorial sessions, professional grading of the assessments (available as self-assessment in iTunes U), an ability to borrow set texts from the library, and an official statement of grading and completion at the end. Also, the material dated from April 2011, so wasn’t as current as if I’d been doing the real subject today.

Of these, the only thing I really missed was access to the texts. I suppose I could’ve bought my own copies, but given I was trying this because it was free, I wasn’t really inclined to. Also, for this subject, the main text (priced at over $180) was actually a complementary learning experience with seemingly little overlap with the lectures.

While I tried both the video and transcript forms of the lectures, and while the video recordings were professionally done, in the end I greatly preferred the transcripts. The transcripts didn’t capture blackboard writing/diagrams well, and I sometimes went back and watched the videos to see them, but the lecturer had checked over the transcripts and they had additions and corrections in them that went beyond what was in the video. Also, I could get through a 1hr lecture in a lot less than an hour if I was reading the transcript.

Putting aside the form of delivery, the content of the subject turned out to be much more interesting that I expected at the beginning. Shiller provided a social context for developments in finance through history, explained the relationships between the major American financial organisations, and provided persuasive arguments for the civilising force of financial innovations (e.g. for resource allocation, risk management and incentive creation), positioning finance as an engineering discipline rather than (say) a tool for clever individuals to make buckets of cash under sometimes somewhat dubious circumstances. I’ll never think of tax or financial markets or insurance in quite the same way again.

I will quote a chunk from one of his lectures (Lecture 22) that illustrates his approach, but also talks about how technology changes resulted in the creation of government pension schemes. I like the idea that technology shifts have resulted in the creation of many things that we wouldn’t ordinarily associate with “technology”. By copying his words in here, I’ll be able to find them more easily in the future (since this is a theme I’d like to pick up again).

In any case, while I didn’t find the iTunes U technology to be a good alternative for university education, I think it’s a good alternative to reading a typical e-book on the subject. Of course, both e-books and online education will continue to evolve, and maybe there wont be a clear distinction in the future. But for now, it’s an enjoyable way to access some non-fiction material in areas of interest.

The German government set up a plan, whereby people would contribute over their working lives to a social security system, and the system would then years later, 30, 40 years later, keep a tab, about how much they’ve contributed, and then pay them a pension for the rest of their lives. So, the Times wondered aloud, are they going to mess this up? They’ve got to keep records for 40 years. They were talking about the government keeping records, and they thought, nobody can really manage to do this, and that it will collapse in ruin. But it didn’t. The Germans managed to do this in the 1880s for the first time, and actually it was an idea that was copied all over the world.

So, why is it that Germany was able to do something like this in the 1880s, when it was not doable anywhere else? It had never been done until that time. I think this has to do ultimately with technology. Technology, particularly information technology, was advancing rapidly in the 19th century. Not as rapidly as in the 20th, but rapidly advancing.

So, what happened in Europe that made it possible to institute these radical new ideas? I just give a list of some things.

Paper. This is information technology, but you don’t think – in the 18th century, paper, ordinary paper was very expensive, because it was made from cloth in those days. They didn’t know how to make paper from wood, and it had to be hand-made. As a result, if you bought a newspaper in, say, 1790, it would be just one page, and it would be printed on the smallest print, because it was just so expensive. It would cost you like $20 in today’s prices to buy one newspaper. Then, they invented the paper machine that made it mechanically, and they made it out of wood pulp, and suddenly the cost of paper went down. …

There was a fundamental economic difference, and so, paper was one of the things.

And you never got a receipt for anything, when you bought something. You go to the store and buy something, you think you get a receipt? Absolutely not, because it’s too – well, they wouldn’t know why, but that’s the ultimate reason – too expensive. And so, they invented paper.

Two, carbon paper. Do you people even know what this is? Anyone here heard of carbon paper? Maybe, I don’t know. It used to be, that, when you wanted to make a copy of something, you didn’t have any copying machines. You would buy this special paper, which was – do you know what – do I have to explain this to you? You know what carbon paper is? You put it between two sheets of paper, and you write on the upper one, and it comes through on the lower one.

This was never invented until the 19th century. Nobody had carbon paper. You couldn’t make copies of anything. There was no way to make a copy. They hadn’t invented photography, yet. They had no way to make a copy. You had to just hand-copy everything. The first copying machine – maybe I mentioned that – didn’t come until the 20th century, and they were photographic.

And the typewriter. That was invented in the 1870s. Now, it may seem like a small thing, but it was a very important thing, because you could make accurate documents, and they were not subject to misinterpretation because of sloppy handwriting. … And you could also make many copies. You could make six copies at once with carbon paper. And they’re all exactly the same. You can file each one in a different filing cabinet.

Four, standardized forms. These were forms that had fill-in-the-blank with a typewriter.

They had filing cabinets.

And finally, bureaucracy developed. They had management school. Particularly in Germany, it was famous for its management schools and its business schools.

Oh, I should add, also, postal service. If you wanted to mail a letter in 1790, you’d have trouble, and it would cost you a lot. Most people in 1790 got maybe one letter a year, or two letters a year. That was it. But in the 19th century, they started setting up post offices all over the world, and the Germans were particularly good at this kind of bureaucratic thing. So, there were post offices in every town, and the social security system operated through the post offices. Because once you have post offices in every town, you would go to make your payments on social security at the post office, and they would give you stamps, and you’d paste them on a card, and that’s how you could show that you had paid.

– Robert Shiller, ECON252 Financial Markets, 2011