“Change is inevitable. Growth is optional. "
— John C Maxwell
The whole world was stunned by the sudden outbreak of the deadly pandemic, Covid-19. As a countermeasure, Governments began to impose strict lockdowns, resulting in the freezing of an entire set of human activities. The education sector might be the worst victim of these restrictions. The smooth stream of curriculums and courses got disrupted, raising a burning question about the future of millions of students.
However, the unexpected challenge faced was transformed into a bright opportunity. Some countries, especially Western, initiated steps to conduct classes online through face-to-face conference apps. Slowly, seeing the patterns and trends, several countries emulated the Western path by announcing the resumption of classes through online modes. Despite the announcements stirring a blended response, authorities did well in convincing the pupils and parents. Governments along with private organisations assisted each other by improving their existing online platforms and apps and providing training to use the new technologies at an optimum level. Thus, the online education sector flourished in the post-covid scenario, with the support and blessings of Governmental authorities. Now emerges the relevant address of had the virtual learning managed to be a perfect substitute for conventional classrooms, in 2022? Is the online education industry an affluent and prosperous one for investors?
Unfortunately, the answer to both is a big no. Like a bubble burst, the triumph of virtual instructive platforms did not last long due to various reasons.
Birth and the rise
The first-ever complete online course was offered in 1984 by the University of Toronto, USA. Gradually, as many universities started to encourage virtual learning, many e-learning software was created. But till the cheap availability of internet and accessories, such modern methods were not welcomed. The unforeseen obstacle in the paving of the traditional education system had caused the major switch over, favoring the online education sector. The year 2020 had seen increased availability and adoption of electronic resources and activities that could be integrated into online learning experiences.
India, the world's largest youth-populated country, witnessed a dramatic change in the education system. With the availability of the cheapest internet facilities, the online education market boomed across the country through cost-effective and targeted advertisement sets. As per statistics, the education technology industry cruised to be the third-most funded Indian startup industry. Byju's, a Bangalore-based the ed-tech firm is the world's highly valued virtual education company and had grown up to the level of sponsoring the prestigious FIFA World cup, within the span of operation of a decade. Unacademy, another ed-tech company achieved the coveted $1 billion valuations. Inspired by these success stories, a host of new ed-tech startups have mushroomed in India.
With the experimentation and exploration of new features like unlimited video conferencing time, auto-translator, etc. students got adapted to the innovation more conveniently. Through an online mode, students could grasp concepts more quickly at their own pace by returning, re-watching, or skipping the lessons they choose. This has led to tremendous success for the companies.
The Online Education system questions the cornerstone of the Indian Constitution, equity, and equality. In a country like India, there are huge inequalities in the availability of resources and essentials to attend these classes. Thus, they create a digital divide between rich and poor.
With the immense support of the Government, barriers to entering the online education industry lessened. As a result, because of the prosperity, a humongous number of start-ups flooded into the market. This gave rise to abnormal competition forcing companies to lower the price of their products. But, the cost of acquisition, which is the cost incurred by a company on earning a customer, through expensive sales and advertising processes, rocketed up. Eventually, the profit margin decreased to a level beyond which their basic survival itself, was questioned.
After the introduction of the vaccination campaigns, Governments started to loosen their restrictions and strived to restore things to normal. As a part of this movement, educational institutions were reopened. Most of the students reacted positively to this movement, which was a sudden blow to the education technology sector.
Apart from these major reasons, some crucial international factors too contributed to the downfall of the industry. China asks its ed-tech companies to move to non-profits burning off millions of capital raised. The economic consequences of the Russia-Ukraine war served as yet another headache. Impending recession threats pushed up the interest rates, which tightened fund flow, and online education companies are now stressed to prove their profitability instead of revenue-generation skills.
“ We are looking at a time where funding will dry up for at least 12-18 months. We must adapt,” founder and CEO of online education provider Unacademy wrote in an email to his employees. This statement reflects the crystal clear image of the challenges currently faced by the industry.
Byju's sacks over 2500 employees. Online tutoring platform Vedantu laid off 7 percent of their total workforce. Lido, an online education provider to school students shut down. The ongoing ed-tech crash crisis is more serious and almost 15000 people might be left jobless. None even the Governments, who once deeply promoted the industry, could save the companies in this crucial juncture.
The ed-tech crash has caused several online education providers to rethink. To brace for the impact, most of the companies turned their attention to traditional offline classrooms. Last year, Byju's acquired Aakash Educational Services, a trusted brand that specialises in training for competitive exams. Unacademy announced its official entry into the offline foray, by launching its first coaching center in Rajasthan.
The above facts and figures signify a strong message that online education cannot be a perfect substitute for classroom education. The question of how schools continue to stress traditional academic skills and rote learning, rather than on skills, was raised since time immemorial. If the online education sector succeeds in exploring and addressing the flaws of the conventional education system to create an effective and new method of education, the industry will surely gain a position, both in the market and in history. Like other sectors, where competition is stiff, the future belongs to those who can innovate while focussing on sustainability.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2022 Govind Panicker