The digital classroom.
Technology is making education more accessible and relevant. Thaiha Nguyen, an investment manager with Keystone Positive Change Investment Trust and the Positive Change Fund, explores the companies changing the way we learn.
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For centuries education meant a teacher standing in front of a class teaching a set course to a limited group of students. The format restricted how learning could be scaled up in volume, contributing to rising costs for students. In the US, for example, college tuition fees have almost quadrupled since the 1980s.
Thaiha Nguyen explains why: “Education is a scarce resource and if something is scarce it’s often expensive.”
Not for much longer. ‘Edtech’ or educational technology companies are using the power of the internet, artificial intelligence and smartphone apps to disrupt the traditional model and remove education’s scarcity value.
But it’s not just supply that’s changing, demand for lifelong learning is also on the increase, Nguyen says. “If you buy into the argument that we’re going to live for longer, then we’re going to work for longer. And we’re going to keep learning, not just because we want new knowledge but also because we want to remain relevant in the fast-changing job market. There is an opportunity for education to keep growing. It’s a $2tn market and online degrees are estimated to be worth about $40bn, rising to $80bn by 2025.”
Nguyen is not disheartened by the common perception of edtech as “a graveyard for investors,” suggesting this view arises from the difficulty of balancing the mission to provide cheap, accessible products with the need for companies to be profitable. But she believes companies such as Duolingo, Coursera and FDM can strike the right balance, by combining technology and digital delivery efficiently and effectively.
The first of those, Duolingo is a smartphone-based language-teaching app. Nguyen underlines the role gamification plays in making the app fun and engaging. Every day, around 10 million people worldwide use it under the watchful eye of Duo, its bright green animated owl mascot, who pops up to give regular applause and reminders to do your daily quiz-like language exercises. This ‘gamification’, Nguyen says, creates a “key differentiation point in a very crowded language app market”. By interacting with users, Duo encourages them to “learn more and to learn better”. The bird is equally at home in viral TikTok videos as in your inbox, using different ways to encourage interaction with the app.
Another US company, Coursera harnesses emerging technologies to increase accessibility and manage costs. It has expanded its global market by offering short online courses for anyone wanting to continue their lifelong learning, working with universities to provide online degrees, and helping employers to upskill their workforces. Nguyen thinks Coursera will benefit from “our desire to remain relevant in the ever-changing job market”.
The London-based recruiter FDM helps improve the match between employers and potential employees as it addresses the information technology (IT) skill gap. According to Nguyen, “the gap exists to some extent because of the unhelpfulness of university degrees, even degrees in computer science, in signalling competencies in IT.” Employers therefore look for IT work experience, and that’s what FDM provides its customers.
By training, recruiting and placing people in companies that require IT expertise, FDM helps resolve imbalances of supply and demand, while improving opportunities for workers. As an investment manager for the Keystone Positive Change Investment Trust and the Positive Change Fund, she expects companies to give equal precedence to “a business model that works well with a system that can make sustainable revenues and profitability in the future”. Management intent is what she looks for. Nguyen recalls a conversation with Luis von Ahn, founder of Duolingo, who turned down a direct offer from Bill Gates to work at Microsoft so that he could teach: “Being an immigrant from Guatemala taught him the importance of equal access to education. He founded Duolingo because he wants to provide the best education and make it universally available.”
Nguyen respects that stance, and so it seems do the millions learning from their regular engagement with Duolingo’s friendly owl. Harnessing the powers of the internet, artificial intelligence and apps to good effect, she sees a brighter future for learners and for the new education companies, thanks to the latter’s ability to take education out of the classroom and into your PC and smartphone.
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