Drivers of Innovation in Education : Comparing Workforce, Higher Education, and K12

Over the past few weeks, I’ve been writing about my deep exploration of the EdTech world, including what is happening on the investment front (with real time updates) to how AI is going to impact various actors and sectors in the space.??

I thought it might be interesting to write a bit about the state of innovation in EdTech, specifically, what are the factors that are impacting the levels of innovation, or the lack thereof, in the various sectors of our space.? This isn’t just conjecture.? I’ve been talking with everyone in our industry, investors, operators, clients, and even end users, to help build a mental map for what is happening.? I’ll share a bit of it in this article, and if anyone in my network wants to chat more about it, or challenge my thinking, feel free to reach out.??

At a high level, I am seeing much more investment and innovation at the K12 and Workforce level than we are in Higher Education, which is not only disappointing, I hear from leaders in HE are frustrated as well.? What’s holding back investment in innovation in Higher Education?? Part of it relates back to the pandemic.? In 2020 and 2021, people really believed that faculty and students might choose to never return to the classroom, and there was a wave of investment to support that.? While some of that has been true, we are also seeing a real push back to the connectedness of a classroom setting.? But there’s more.? What I’m hearing consistently is that the enrollment cliff, plus the continuous need to find new sources of revenue as public funding dwindles, leaves little time or capital for investing in innovation in traditional higher education.? The uncertainty of how AI will disrupt traditional academia is also a moderating factor.??

Where there is innovation for HE is in this process of looking for new sources of revenue.? Short courses, certificates, outreach to international or non-traditional students.? There’s a reasonable level of innovation in each of these areas.? There are other areas that are desperate for innovation, but don’t seem to be gaining traction.? One that I’m hearing frequently is the need for more skills based learning and a focus on job readiness for graduating students.? There is so much room for innovation here, especially with the power of AI to help create learning paths and map skills and competencies.? I think there is a lot of untapped potential in this space, and I believe we will see investment flow in this direction over the next several years.??

Finally, in Higher Education, I’m curious to see what the new home of Instructure will be.? With the right owners, I think Instructure could be well poised to innovate in teaching and learning over the next several years.????

K12 is in a different place, with a lot of investment and innovation happening, but concerns about the expiration of ESSER funding.? In 2022, municipal bond funding for K12 projects hit an all time high at $89 billion (USD).? This has led to investment in everything from buildings to technology to people.? Of course, with higher interest rates today, we will likely see less bond issuances, despite a bipartisan desire to improve K12 education, and districts are literally draining their ESSER funding before losing it in just a few months.? The key question will be whether the reduction in funding slows down innovation through lack of investment, or if the additional pressures of slower investment will spur innovative thinking and products to help schools do more with less.??

Workforce is where I believe we are seeing the most innovation, and specifically, the link between job skills and the workforce.? With the tight labor market, it’s becoming even more necessary for hiring managers to know that applicants have the right skills because the costs of hiring and training are only going up.? There are lots of areas where this is really important, from Advanced Manufacturing to Allied Health fields, where there are massive labor shortages and fragmented markets.? You can see what Labster is doing to make online training in health and other science fields more realistic and impactful, or you can look at what Intelvio (formerly Phlebotomy Training Specialists) is doing to lead some consolidation and innovation in the health training field, to name just a few examples.??

As I’ve mentioned in my earlier articles, there is plenty of capital out there to be invested in the right ideas and the right entrepreneurs and companies.? I believe that the second half of this year will see a slow but steady increase in investment and hopefully innovation across the entire spectrum of education.??