Smart! But can it make your child learn better? by Karan Khemka [->0]
Schools are turning to education technology to provide better teaching. Yet, despite strong growth, many edutech companies face challenges for sustainable growth

With exploding affluence in emerging markets like India and Brazil, governments are unable to keep up with the demand for high-quality education among the growing middle class. Families are turning to private schools, and enrolment has grown, for example, in China by 12 percent and India by 8 percent per year in recent years.
Entrepreneurs are opening private institutions at unprecedented rates: In India, the current 70,000 private schools are expected to double in the next decade, with an astonishing 20-30 schools set to open daily. Two new private schools are opening in Sao Paulo each day.
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The rapid growth of these markets is generating intense competition among private schools. Unlike other consumer offerings, schools are both highly localised and experiential; urban families have breadth to be choosy, and schools must deliver reviews and results before families will opt in. It is no coincidence that top schools and universities—Oxford, Harvard, Eton, Andover—are also the oldest schools in their countries.

Our findings show that 20 percent of Brazilian private schools and 25 percent of Indian private schools have been in operation less than five years. This creates a challenging set of circumstances in which new schools must differentiate themselves without time to demonstrate results and build a reputation.

Schools are therefore turning to education technology (edutech) to get down the learning curve and demonstrate quality to parents before establishing a track record of college placements or exam results.
We know that parents value edutech: Our surveys of Indian parents show that more than 50 percent said they would value an online platform for students.

In this rapidly growing global market, two distinct types of edutech offerings are emerging: Service-oriented products and hardware-oriented products.

In Brazil the national curriculum is flexible, with no specific textbooks or methods required. Edutech companies there, like AbrilEduçãcao, provide well-defined curricula ‘out of a box’ along with cutting-edge learning services, including student assessment and online portals—eliminating the need for individual schools to interpret and define the curriculum.

In India, by contrast, the national curriculum is prescriptive, with little opportunity for schools to modify their approach. As such, edutech companies like EduComp often lead with high-tech hardware that includes integrated, curated content in order to demonstrate quality and sophistication to parents. Smart technology now penetrates more than 30 percent of India’s private schools.

Are These Sustainable Models?
Hardware-focussed edutech providers see low contract renewal rates of 50-60 percent. All but the best of these solutions have little ‘stickiness’, and they risk replacement by lower-cost or newer options; like mobile phones and computers, they can quickly become obsolete. Virtually 100 percent of private school principals we surveyed said they would re-evaluate system providers at the time of contract renewal, looking to find the best price and offer.

Likewise, edutech companies focussed on content provision alone may run into problems. As with many content-based industries—like book publishing, music production, and journalism—in education, information exclusivity is often no longer a viable basis for a business model. Well-curated, rich content can add significant value in classrooms but companies must now compete with the quality and breadth of material available on free platforms such as Khan Academy.

In order to build successful and sustainable businesses, edutech providers need to focus on developing their offerings in three ways that can build loyalty while protecting prices.

First, they need to offer a suite of services for which schools pay each time they are used, such as ongoing assessments. As schools use these services and customise them to their needs, the product becomes an integral part of classrooms and switching costs increase.

Second, edutech leaders need a sales force to attract and retain schools. A ‘last mile’ sales force creates entry barriers for competitors and helps businesses to secure market share and exclusivity arrangements.
Finally, edutech solutions need to ‘know the student’. When selecting additional tutoring services, parents say that the most important factors are the service’s ability to assess the child’s performance and personalise the programme. Successful edutech assesses individual achievement and offers tailored and appropriately-paced content based on student needs and classroom learning goals.

Some of the large Brazilian edutech services-oriented companies such as Objetivo and Positivo are success stories in this crowded market. Their product suite focuses on recurring needs such as assessment, teacher training and student portals while avoiding hardware-heavy installations.

Does Edutech Improve Learning Outcomes?
While edutech may be valued by parents and support schools to attract middle class families, the unanswered question is its effect on learning outcomes.

The great potential of edutech is in driving digital literacy for skills and jobs for the future, but many edutech solutions just deliver old-fashioned curriculum in new-fangled clothing. As one blogger puts it, “Too many e-books are simply physical books put behind glass.”

An effective initiative that has spread to schools internationally is the Flat Classroom Project, in scores of schools from China to Qatar to India. The project links students around the world through technology—including Skype and film editing software—and engages them in collaborative projects and dialogue. There are also examples like Apps for Good and Code Club that engage students in actual programming.

However, there is little agreement about the results to be measured. Is it teacher satisfaction? Does it improve exam performance? Answering the question of what learning outcomes edutech systems should aim to deliver would help us to assess them. Evidence from evaluations of the One Laptop Per Child initiative, seen by many as an educational panacea, showed that the provision of educational hardware had little impact on reading or math scores, but delivered some improvement in cognitive ability and abstract reasoning. Proponents argue that assessment of One Laptop Per Child was in a ‘pen and paper’ test, and suggest that testing ‘21st century skills’—technological literacy and creativity among them—could be a more effective way of assessing impact.

There is also the issue of use: Even if edutech solutions are well-designed, educators and students may not have the technological know-how to get the most out of them. These problems can be bridged by effective sales and support, but too often edutech solutions are a great ‘sell’ for parents that then sit unused. In One Laptop Per Child, there were concerns that the computers had been delivered to schools where neither teachers nor students knew how to use them or update their software.

The goal for edutech companies operating in private schools in emerging markets should be to effectively quantify and verify learning outcomes. The first company able to measure and prove student success will be a game-changer in its ability to build a brand based on proven results. If we see solutions able to deliver learning results, we may see many more new schools able to join the ranks of the best institutions globally.

(The author is the head of Parthenon’s International Education Practice and wrote his article with support from Roisin Pelley, Mayank Kumar and Mary Abdo)

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