Australian EdTech sector enjoys momentum, doubles size in two years

The Australian EdTech sector almost doubled in size between 2017 and 2019, with a greater number of EdTech organisations progressing from ‘start-ups’ to ‘scale-ups’, according to the 2019 Australian EdTech Census released today by Deloitte and EduGrowth at the 2020 Universities Australia conference in Canberra.

EduGrowth first launched the Australian EdTech Census in 2017, seeking to map the landscape, track the progress and identify ways to foster innovation in the EdTech sector.

The Census had a total of 168 respondents and EduGrowth estimates approximately 600 EdTech organisations are currently operating in Australia.

Population growth and skills are driving exponential demand

Population growth in developing markets is driving a mass expansion in, and demand for, education services. Deloitte Access Economics predicts there will be 1 billion students across 29 global markets by 20251. That’s half a billion more school and university graduates in the world than today.

To meet this additional demand, the education sector will have to scale significantly; which cannot be done through incremental efforts alone.

Deloitte Lead Partner for Education, Colette Rogers, said: “This opens the door for EdTech solutions that use advanced technologies, such as AI, AR/VR, robotics and other innovations, to target specific learning needs and outcomes at speed and at scale.

“EdTech has the potential to address access, cost and teaching capacity issues. This includes education providers expanding to export markets and allowing increased access to internationally recognised qualifications.”

At the same time, digital disruption is driving unprecedented reskilling and upskilling which is also driving demand for rapid innovation and the scaling of education services targeted toward emerging industry needs. New skills are emerging and jobs are being augmented by technology, increasing the need for lifelong learning.

By 2030, if we continue on our current path, Deloitte Access Economics estimates that in Australia there will be a total of 29 million skills shortages, 25% higher than the current levels2.

Deloitte Director, Christine Axton, said: “In a rapidly evolving global economy where skills sets are changing at an accelerated pace, EdTech offers new pathways to reskilling.”

Census data shows momentum and growth in the Australian EdTech market with ‘Future of Work’ solutions gaining traction

Between 2017 and 2019 the Australian EdTech sector grew significantly, almost doubling in size. EduGrowth estimate that the number of EdTech organisations in Australian has increased from approximately 350 organisations in 2017 to approximately 600 organisations in 20193. Over this period, a greater number of EdTech organisations have progressed from ‘start-ups’ to ‘scale-ups’, and are on average more established, and operationally sustainable than they were in 2019.

Solutions focused on schools and universities still lead in Australia, but future of work solutions are gaining traction. The percentage of organisations focused on corporate and vocational learning solutions has increased (from 24% to 38% and from 33% to 42%, respectively) since 2017. A shift that indicates future of work solutions are increasingly in the frame.

Good examples are G01, which provides a marketplace of training options connecting employers and training providers, and A Cloud Guru, which provides cloud computing training to help organisations train employees and transition to a cloud-based environment.

In 2019, these two Australian EdTech organisations raised the largest levels of funding that the Australian EdTech sector has seen.

EduGrowth’s Managing Director, David Linke, said: “Growth and maturity in the Australian EdTech sector is inspiring. Our 2019 data shows the sector maturing in terms of revenue, employment growth and export opportunities. The education technology industry is moving strongly and will play an ever-increasingly important role in the story of Australian Education locally, nationally and globally.”

However, to compete globally we will need to maintain momentum and increase access to funding and overseas markets

While the Australian market has significant momentum and capability, global competitiveness and access to overseas markets will be the key to success.

International investment in EdTech is ramping up, with capital investment reaching $7bn worldwide in 20194. Although this is a staggering increase (up from $500 million in 2010), the majority of funding went to two countries: China and the US.

To date, the Australian EdTech industry has benefitted from the launchpad of a thriving domestic education sector, and there are many examples of innovative EdTech solutions developed through university incubators. However, to compete globally our sector will need to maintain momentum, innovate and gain traction in overseas markets.

Deloitte Director, Christine Axton, said: “Innovation requires capital, and if the sector is to reach the next level and be even more competitive globally, EdTech organisations will need access to funding and increased support from private investors here and overseas.”

References

1. Austrade and Deloitte Access Economics (2015) “Growth and Opportunity in Australian International Education

2. Deloitte Insights (2019) Building The Lucky Country: The path to prosperity (Report No. 7)

3. EduGrowth (2019) Enabling the growth of the Australian EdTech ecosystem.

4. Holon IQ. (2020, January 28). $87bn+ of Global EdTech funding predicted through 2030. Retrieved from https://www.holoniq.com/notes/87bn-of-global-edtech-funding-predicted-to-2030/

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