2021 is here, and it's time to write down my observations on 2020...

Happy New Year, all.

Ordinarily I would now be preparing to spend 2-3 days in the Excel Centre for BETT 2021, and that's the annual stimulus for me to write an article about my observations and expectations. Well, that trade show has been kicked to 2022 (although I've been delighted recently as a BETT Awards judge by some excellent submissions...!).

Anyway, welcome for all of us to 2021. Will it be better than the past year? We can live in hope.

So - what's been going on, and what do I expect?

• Consolidation - I have never seen so much acquisition in the edtech and school services space, and I don't see it slowing down this year. Supporting Education Group, Juniper Education (wow!), Iris and Access - and others - have pedalled hard. On top of that you have the ParentPay / Capita ESS merger. If you have appetite to buy businesses in this space then to use my favourite "northern" phrase, you'd best get a wriggle on. It's not just private equity ambition - we (project teams led by my colleagues Lizzie Joseph, Sam Raven, Valerie Vigouroux, Luke Rowett spring to mind) have interviewed hundreds of school leaders and there is a very strong preference for reducing the number of suppliers. To wrap some context around that I attach two quotes: "just filling in the GDPR compliance forms for all of our suppliers has become a nightmare", and "I would absolutely prefer one mediocre but broad supplier to four exceptional ones - unless I believe that I am risking the educational quality for our young learners. I won't compromise on that". When we ask school leaders how they justified replacing their legacy MIS with a challenger brand then very very often they first tell us about how it unlocked EdTech product consolidation.
• EdTech bubble vs. step-up: so many edtech businesses have told me that they are coincidentally planning to sell *right now* (or at least ASAP). Some others have privately admitted that they are in a COVID-related bubble (at least some of which will come off), and that their highest priority is to invest heavily to turbo-charge the business' underlying growth so that when the bubble does normalise they won't go backwards for 1-3 years. There are many reasons why the uptick in edtech usage (note: paid, or free? too many offered too much for free) will be at least partially maintained - not least the upskilling of teachers, not least the expectations of parents. It is extremely likely however that some of the free usage will erode when we get through this extraordinary (execrable?) period. Managing that could be tough, whether in reality (if cost - driven by ambition or generosity - has outpaced income) or in perception (a few collapses or retrenchments could tarnish investor views of solid providers). For what it's worth, I think it is incredibly important that providers recognise both sides of the argument, and prepare their post-COVID pitch carefully...
• Underlying school EdTech need: ...because the underlying need of the schools sector is going to be tortuous. If your typical state school imagines for a moment that they can sail out of lockdown and revert to business as usual for the 2021/22 academic year than they are massively deluded. While there will be exceptions (and, in the main, independent schools and Ofsted-1 schools for a bunch of reasons will be less affected) the level of disruption is and will be enormous. So many children have missed out on a significant proportion of a year of learning - from a mixture of school, parental, and circumstantial challenges - and this will contaminate those children's learning for years to come. If you are a student who is substantially behind your class - and it is impossible to deny that the gap between most advanced and least advanced has widened both across society and within many schools - then it is very difficult for a teacher to fix that within the constraints of a whole-class timetable. The most challenged schools have, I think, seen the toughest impact and are the least well equipped to "catch up". I think that EdTech and targeted tutoring has to be the answer - and to be effective these will need to be deployed *at scale* *for years to come*.
• B2C: That brings us to another element of the last year - so many EdTech companies are emphasising their new / renewed B2C focus. We (my colleague Lizzie Joseph in particular) did some great work in the US market last year, and observed a real push for B2C models - which by the way highlighted the challenges that free / non-profit providers inflict on their more-commercial peers. I ran a great workshop with one edtech provider in the UK where we uncovered that c.￡2k in B2B (or "B2S") revenue displaced up to c.￡50k of their B2C product potential. We all know that tutoring has been on the up for a long time, and we've seen (anecdotally - and if you have real quant data on this I'd be very grateful for a discussion) that this year has opened the wallets of upwardly mobile parents much more than before. In Germany, in the Netherlands, recent transactions have highlighted this trend. I'm slightly reluctant to write this - for equity reasons - but if you are selling to schools and your product has real impact on learning, then you should most likely be thinking about a supplementary B2C product. NOTE: this will *not* be the same product as the school one, just sold to parents. It should be a different product. We're happy to hold a freebie call on this if you want to get in touch - we are quite gung ho about supporting providers with this challenge across as much of the sector as I/we can cope with.
• Quality of management: there are lots of ways in which a provider can demonstrate impact to schools (not just schools). However I'm going to pick two strong examples of good practice for schools. GCSEPod (note: the Assignment Report company of the year for 2020 - well deserved!) does the best commercial job I have ever seen of evidencing impact to their customers, with a chart showing direct correlation between (a) the average number of "pods" consumed and (b) the school experience to their customers' Progress 8 score. It also measures school usage versus retention in an extremely compelling way. ParentPay is also run like a (Swiss!) train - incredibly strong leading indicators of customer / parent usage.
• Skills uncertainty: my colleague Georgia Moss and her team have built a comprehensive map of the UK skills training spend (c.￡15bn across c.45 funding or spend pots, including all four nations plus some "whole UK" budgets), and assessed the addressability of its component parts. What's been most extraordinary for me has been to see the proportion of this activity which is subject to significant uncertainty - whether European Social Fund transitioning to whatever, the ROTO retender, the regional devolution shift, Apprenticeship Standard pricing... tough, tough, tough, tough (but vital, vital, vital, vital). We see more differentiation than ever before between providers, and this is - I think - a really good thing.
• Higher Education nervousness: we were really pleased (and perhaps a little bit proud!) to get the 2020 intake forecasts right: we said domestic undergrad would be 0-5% up when others were saying - very publicly - 16% down, and it landed at +4%... Notwithstanding this, we recognise that calling this outcome is incredibly hard for institutions - not just for "the market" but within it. I did a really fun talk for WPM last year titled "The Secret Life of University Economics" - which among other things highlighted that the 2017-19 intakes had seen c.40 universities grow applications at an average of 7%/yr, 45 had been flat(tish), and 70 had shrunk at 7%/yr. We're waiting eagerly for the end of January to see the 2020 cycle impact at an institution level. Obviously the 2021 cycle will be impacted by some of the COVID related student experience news from 2020/21, but if this is comprehensively put behind us it could be a good year for universities - retakes (2020/21 will be tough, and I think it's very hard not to predict a higher-than-normal of course "redo" need) plus momentum in international (some markets will be no doubt be hammered although the UK post-Brexit looks more open-for-business than many, but China in particular sees momentum around the choice between the Gaokao and international study - and there's often a couple of years lag in this). Anyway, we expect huge uncertainty until October, just as we saw this year, but it feels like the outturn for 2021 entry could be okay. 2022 - although even harder to predict - is where I worry. By the way, this is another area where we are happy to commit thought leadership support / bandwidth to university leadership teams. If you'd like to discuss please get in touch with me.

Some kudos to:

• Education-specific research panels. There are probably more than these, but Teacher Tapp (well done on an extraordinary product, Laura and Sam!), C3 Education / the National Education Research Panel (incredibly robust sampling), and Schoolzone (no mission too hard - and I am incredibly grateful for your extraordinary help) are all excellent. I saw in 2020 the by-miles *single worst* piece of education strategy consultancy I have ever seen. There were many low points in it, but the lowest was a major consultancy brand (that one might think should know better) using multiple consumer online research panels to stitch together a view of school behaviours which asserted that around 30% of schools are *actively using* on a day to day basis at least 3 (some claimed to use 9!) MIS providers. Oh, the shame - school janitors were not the least-well-informed contributors to that research. For goodness sake, if you are going to collect primary research data in this sector please do it from someone who has, for example, done it before.
• TOTS - Turn On The Subtitles: Henry Warren and Oli Barrett have done something that is already extraordinary. Have you noticed that your kids when watching Netflix are seeing subtitles? It's (in large part) their fault - and the reason it's fantastic is that children that watch TV with subtitles on are much, much, much more likely to become competent readers than otherwise (even those watching crappy cartoons!). Henry was rightly lauded by our PM in the House of Commons for getting Netflix and other broadcasters to make this change - but well done, and thank you, to both of you!
• Our clients: Every engagement in 2020 brought us genuinely interesting challenges where we have been able to push both our understanding and your's forward - we always aim to build on our prior experience to ensure that we deliver the most robust and forward-thinking work, and the journey to that is not always smooth. Thank you for your trust and patience, and for the - overwhelmingly - fun experience of working with you!
• My team - both direct and extended: Sorry, I can't resist! We were absolutely delighted to win the EducationInvestor Consultancy of the Year - to the private sector - award. It's the third time in six years that I've led a team that won this, and I couldn't be prouder of the people I work with. I could name so many, not just in my direct team (Georgina, Giovanni, Lizzie, Harry, Georgia, Luke, Valerie, Sarah, Sam, Rob, Ruth, Hugh, Tumay, Ziyu, Umar, Hanmin, James, Jess, Eddie, Danny, Daniel, Jac and Nick - with apologies for those I missed!) but across the different PwC lines of service (financial due diligence, valuations, negotiation, consultancy, corporate finance, assurance, pensions, restructuring, SPA) and across the PwC international network (India, Australia, New Zealand, USA, Canada, Singapore, France, Germany, Netherlands, UAE, South Africa all spring to mind) for your support. It's been an extraordinary year, and I couldn't have done it without you!

If you're reading this and think I (or we!) might be able to help in this extraordinary time then please do let me know, and we will if we can. We do continue to publish thought leadership, and generally it's quite good:

• Corporate e-learning - a c.50 page pack that Harry Biggs led on, from July 2020, looking at value creation in particular
• "Working with Education Leaders" - a c.60 page book of verbatim interviews with education luminaries whose experience covers GL Education, Babbel, Cambridge Assessment, Twinkl, Rising Stars, Classlist, Capita SIMS, Collins Learning, and Satchel / ShowMyHomework. Paper version only, so if you would like to read it please send me (note: don't just drop it in the comments...) your mailing address.
• Looking to publish a substantial report on UK and European EdTech in February 2021
• Looking to kick off our education sector events (our legendary/infamous education sector CEO drinks, back on the PwC roof terrace, subject to any lockdown restrictions.........) in August 2021.

I very much hope that you are having as much fun as I am. I continue to be inspired by WE Henley ("out of the night that covers me..." etc.). No matter the crappy circumstances, we can choose how we respond to them, and we can only do what we can do. Sursum Corda!

Best wishes to all of you,

Ian