How Gen Z Needs Are Changing Online Education

In 2016, Techcrunch published an article with the headline “Edtech is the new Fintech”, which attracted the attention of the global investment community to the field of educational technology. The title of the article caused a flurry of discussions on the future prospects of the global education market. According to the latest forecasts, by 2020 the volume of global investments in educational technologies will reach 252 billion dollars, with the majority going to the introduction of new technologies in the field of school education. The online education market alone is currently estimated at $ 50 billion, although according to the latest data, only 2% of all educational services are sold online.

At the same time, in the next five years, 80% of the world’s population will have access to the Internet, 50% of the American labor market will be taken by freelancers, and 90% of the world’s inhabitants under 30 will live in developing countries. With this, the requirements for education are changing – in the modern world it should become more flexible, accessible and applied in order to help countries, companies and people to maximize the use of human capital. Over the past 5 years, global investment in Edtech has grown by 503%. The international market is developing online and is driven by the active development of new markets – India, China, Asia, Eastern Europe. In developing countries – India and China – more than 50% of all Internet users go online through a mobile phone or tablet. Parents often use mobile apps to develop their children. Also, due to the popularity of micro-learning in the corporate segment, mobile applications have become in demand in the field of advanced training. The market for mobile educational applications and games, e-books will grow from $ 4.4 billion at the end of 2015 to $ 14.5 billion by 2020.

The global online education market is at the intersection of two trends – personalization of education and new diagnostic technologies. People will see more and more meaning in learning, which means they will be ready to invest more and more in their own education. Learning will be an important investment, and trends that are being experimented on today will become an integral part of meeting the needs of Gen Z.

 Personalization of education

Adapting educational content, smart distribution is one of the niches in the online education market. The trend is end-to-end, and most of the initiatives in this area are implemented in the form of Saas solutions that allow you to create virtual personalized learning environments. This format of personalization answers the question “how” – how to increase the efficiency of the educational process, taking into account the characteristics of the student’s learning ability?

There is another part of the personal approach to education associated with the selection of educational programs, which answers the question “what?” – what exactly is worth studying, what skills to master in order to achieve success in your career, to maximize and develop the unique potential of each person? There are still fewer such projects, but their number will grow with the arrival of a new generation on the labor market.

Monetization channels in the education personalization technology market are mainly sales of SaaS (software as a service) to educational institutions or the integration of technologies into platforms of massive online educational courses. The market for educational software for schools, universities and corporate educational formats was estimated at $ 5.8 billion in 2015, and in five years it will reach $ 15 billion.

Educational content production

Massive open online courses have made knowledge available, but the value of the content has dropped dramatically. The volume of the self-learning market decreases annually, and the motivation of users decreases. If earlier educational institutions had a monopoly on knowledge, now the course has been taken towards decentralization. Each person can be a source of educational content. This is proven by the success of resources such as Skillshare and Udemy in allowing users to record their lessons and earn money from them.

The freelancing trend and the desire for financial mobility will lead to the creation of a large escort industry that provides access and success in this market. This is also due to the low level of concentration, the availability of knowledge and the struggle for the attention of students. Today, everyone can earn on their knowledge, turning it into a product, but not everyone has the necessary skills. Those who can learn to “package” experts and bring their knowledge to the market, make the content attractive, will earn money.

An entire market for “packaged content” is emerging. Its growth will be driven by platforms that learn from the sheer volume of available courses to create a value proposition for the specific task of a particular student. For the creators of such platforms, the ways for monetization are also already clear: corporate training in conditions of budget optimization, entry into the professional development market. In March 2016, Indian startup Byju received $ 75 million from one of the world’s most famous venture capital funds, Sequoia capital. Charismatic teachers with acting skills, special effects and infographics, combined with the specifics of the Indian market, allowed the company to reach 5.5 million app downloads in three years. This segment in the global market reached $ 13.9 billion in 2015, by 2020 it will grow by at least $ 3 billion.