What the Future Holds, Why Edtech is Set to Grow

Leading technology advisory and investment firm GP Bullhound released its inaugural education technology report today. Education Technology: An Intro to What’s Moving the Market takes a deep dive into some of the major investment trends propelling growth in the digital learning market. 

Some of the trends include: 

Adaptive learning and artificial intelligence – With 99% of US educators believing that AI is crucial to an institution’s competitiveness, it’s no surprise that the education sector is one of the top areas where AI is driving growth and innovation.

Augmented reality, virtual reality, and immersive learning – Global education spending on AR/VR is expected to grow from $1.8bn in 2018 to $12.6bn in 2025 at a 32% CAGR. Key growth drivers include digital devices, enhanced software and demonstrable efficacy.

Gamification and game-based learning – The global education gamification market was valued at ~$700m in 2020 and is projected to reach $4.1bn by 2027, as educators turn to game-based learning to boost student motivation and learning achievement.

“I think EdTech Digest readers will be interested to see our take on what the future holds for each of these trends,” says Jason Nordlicht, Vice President at GP Bullhound, and one of the authors of the report. “For example, the AR software market for education and training sat at around $6.4bn in 2021 but is expected to grow at a 60%+ CAGR to $68.7bn by 2026. This exponential growth in AR alone will have huge implications across the entire edtech landscape, especially when we look at it in relation to gamification and game-based learning. We expect the AR space to continue innovating, refining and optimizing as it scales, with education spending on tech expected to nearly triple in the next five years.”

Nordlicht believes digital capabilities have continued to evolve and permeate the education landscape, moving the sector to redefine the learning experience, personalizing instruction and student development, and better managing engagement and performance across students of all ages. Over the past two years, education technology enablers have been expanding their reach and driving digital transformation.

“Each trend we highlight has been steadily increasing in both importance and prevalence across the education technology sector. We anticipate these growth drivers will continue to thrive for the foreseeable future, benefiting from demonstrable efficacy and growing recognition of the mission critical nature of innovation, refinement and optimization in order to maximize learning outcomes. I think this will be especially important in the coming years for school districts that are now working to leverage the lessons learned during the pandemic-era that can be used to optimize the learning experience in both remote and in-person settings through both synchronous and asynchronous learning modalities,” says Nordlicht.

The report features expert views from well-known names and companies in edtech, current statistics and analyses in numerous key areas (including asynchronous learning; adaptive learning and artificial intelligence; augmented reality, virtual reality, and immersive learning; gamification and game-based learning; professional licensing, upskilling, and micro-credentialing; cybersecurity, particularly within primary and secondary schools; and implications of social media), and is worth a full read if you’re looking for a great general overview of the field with enough drill-down to get a good idea of where things are and where they are headed.   

Learn more.


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