Will Technology or Budget Deficits Force Eductation in the U.S. to Change?

Education in the U.S. is a huge market and one that has been resistant, maybe even allergic, to most real change and innovation. For profit education is remaking the landscape in the U.S. but still faces some real credibility issues.

Traditional educators look on for profit firms with scorn and condescension. The reality is that technology and profits are going to force the traditional educational institutions to change. I doubt that the Ivy's will ever seriously change their primary model of providing an undergraduate education, but technology and the availability of information will make change inevitable for many other higher education institutions as they face enrollment challenges and budget constraints.

To say that google threatens the very existence of the top tier universities may be overstated. But it could make the middle and lower tier schools unrecognizable to us in 15 years. To survive, many will be forced to change dramatically. Some will focus exclusively on narrow areas of study. Others will slash their cost structure in order to compete. How far and how fast these changes hit higher education in the U.S. is still unclear. But as these institutions are forced to diversify revenue streams, the for profit and technology models start to look better and better.

There was an interesting panel discussion about education and entrepreneurs that was written up on ReadWriteWeb:

Founders of Kno, Khan Academy, NIXTY Debate Education and Entrepreneurship

"The speakers included Lisa Petrides, founder of the Institute for the Study of Knowledge Management and Education (ISKME), Osman Rashid, CEO and co-founder of Kno, Salman Khan, founder of Khan Academy, Glen Moriarty, CEO and co-founder of NIXTY and Philip Bronner, from Novak Biddle Venture Partners.

Undoubtedly, there are several factors which Petrides describes as "game changers" in education: information available freely everywhere, personalized learning, widespread access to the Internet. But with the obstacles in the education system, including its political and legal barriers, there's a sense that it is difficult for entrepreneurs to get a foothold - and get funding - for education technology.

Education is a Huge Market Now, but Will Open Content Change Things?

But Kno's Rashid argued there are huge opportunities. The annual market for education technology is $88 billion, and growing at a rate of 21.7% a year. The market for digital textbooks alone is $54 billion.

But as the panelists debated what constitutes "disruption" in education, both Khan and Moriarty argued that the future of much educational content was likely to be free and open. Khan Academy, for example, is in the process of becoming a "real free virtual school for the world." But the move to make content free shouldn't devalue the learning experience, and there are lots of opportunities to build analytics and management platforms.

Despite the emphasis on free content and opencourseware, venture capitalist Philip Bronner made it clear that investors are interested in startups working in this area - good news for education technology entrepreneurs"

See Also

• Build Your Ed-Tech Startup With Help from the Kauffman Foundation
• As Interest in Online Learning Grows, Udemy Lands $1 Million in Angel Funding
• 5 Ways Tech Startups Can Disrupt the Education System
• Ed-Tech Startup LearnBoost Takes Aim at Legacy Software Systems
• Using Social Games to Teach Kids Entrepreneurship