Education + AI

Last week, Satya Nadella wrote in his letter to Microsoft's shareholders : "We have entered a new age of AI that will fundamentally transform productivity for every individual, organization, and industry on earth and help us address some of our most pressing challenges."?

Education as an industry and practice is set for disruption, and I find this extremely exciting in many ways as a father, entrepreneur, and student.?

AI rapidly transforms industries and societies worldwide, and Mexico is no exception. Mexican companies and organizations are increasingly embracing AI solutions to improve efficiency, productivity, and innovation.

Mexico's economy has surprised with its fastest expansion in over a year, driven by services, domestic consumption, and nearshoring. AI plays a crucial role in enabling nearshoring by facilitating automation, communication, and collaboration. This economic opportunity will allow more professionals to enter the market, taking on new roles and responsibilities that will require upskilling and reskilling.?

Bringing the power of Generative AI to Education will create massive improvements in the entire lifecycle.?

• It is creating new and diverse content for students and teachers, such as texts, images, sounds, and even code. This can enhance the learning experience by providing more variety, novelty, and creativity.
• Personalizing the learning process for each student by adapting to their level of knowledge, speed of learning, and desired goals. This can improve the learning outcomes by providing more tailored and relevant feedback, guidance, and support.
• Helping teachers by automating some of their tasks, such as grading, answering questions, and managing data. This can free up more time for teachers to focus on other aspects of teaching, such as designing curriculum, facilitating discussions, and mentoring students.
• It is enabling universal access to education by breaking down barriers such as distance, language, and cost. This can increase the reach and impact of education, especially for marginalized and vulnerable groups.?

Education in Mexico

The Mexican market is a great setting to build up a business case to innovate and build new solutions in Education.??

• The education market in Mexico is estimated to be worth USD 36.9 billion in 2020, with a compound annual growth rate (CAGR) of 5.8% from 2016 to 2020.
• Primary education in Mexico covers six years of schooling for children aged 6 to 12. It is compulsory and free of charge for all students. In 2020, about 14.4 million students were enrolled in primary education, of which 88.7% attended public schools and 11.3% attended private schools.
• Professional education in Mexico refers to higher education programs that provide specialized knowledge and skills for specific occupations or sectors. It includes technical, technological, and university-level programs. In 2020, about 4.5 million students enrolled in professional education, of which 62.8% attended public institutions and 37.2% attended private institutions.
• Some key indicators of the education market in Mexico are:The literacy rate among adults aged 15 and over was 95.3% in 2018, slightly below the OECD average of 96.9%.The average years of schooling among adults aged 25 and over was 9.7 years in 2019, the lowest among OECD countries and well below the OECD average of 12.8 years.The gross enrolment ratio (GER) in primary education was 103.4% in 2019, meaning that more students were enrolled than the official school-age population. This indicates a high level of access and participation in primary education.The gross enrolment ratio (GER) in tertiary education was 38.1% in 2019, meaning that only about two-fifths of the eligible population were enrolled in higher education programs. This is much lower than the OECD average of 70.6% and reflects a low level of access and attainment in tertiary education.

Some of the challenges that Mexico faces regarding education are not new and definitely not easy to fix. In recent years, we have seen new trends and challenges arising, which help the case for disruption:

• The COVID-19 pandemic has disrupted the education system and forced a shift to online and remote learning modalities. This has exposed the digital divide and the lack of adequate infrastructure, connectivity, and digital skills among students and teachers.
• The quality and relevance of education remain major concerns, as evidenced by the low performance of Mexican students in international assessments such as PISA and TIMSS. There is a need to improve the curriculum, pedagogy, assessment, and teacher training to ensure that students acquire the competencies and skills required for the 21st century.
• The demand for professional education is increasing, especially in fields related to science, technology, engineering, and mathematics (STEM) fields, as well as digital transformation, innovation, and entrepreneurship. There is a need to diversify and expand the supply of professional education programs and enhance their quality and alignment with the labor market needs.

Mexican Population

The population of Mexico in 2020 was 128.9 million people, of which 87.8% lived in urban areas and 12.2% lived in rural areas. The number of households in Mexico in 2020 was 35.7 million, of which 31.3 million were urban and 4.4 million were rural. The average household size in Mexico in 2020 was 3.6 people, of which 3.5 were urban and 4.0 were rural.

In 2022, around 24.51% of Mexico's population were between 0 and 14 years of age, around 67.17% between the ages of 15 and 64, and about 8.32% were 65 years or older. According to Statista, in 2021, the population group below 15 years was the second-largest population group in Mexico, with 24.8% (31.81 million) of the population. The average income per family in the middle 40% tier is 60,900 USD.?

Building a Business Case

The education market in Mexico is about $37 billion (USD), growing 5% YoY, faster than its population, which is growing about 1% annually.?

With a population of 128 million people and 35 million households. We could consider only the urban population and the middle 40% with an average annual income of $60,900 USD. Then, if we estimate that 25% of the total population is in the age range to have an active learning enrollment, that would give us about 12 million potential customers.?

Using Elon Musk's new pricing formula, 1 dollar per month per user, we could estimate that 1% of the market share is worth 1.5 million dollars of Annual Recurrent Revenue (ARR).?

Education Market in the USA?

While I think the Mexican market offers an amazing opportunity to launch new products and services, I firmly believe that the potential is not limited to just geography, topic, or skillset. We should look at the market's total value to assess this transformation's real potential.??

According to Facts and Factors, the U.S. education market size was estimated at USD 1.41 trillion in 2018 and is expected to reach USD 3.12 trillion by 2030 with a CAGR of roughly 4.21% between 2022 and 2030. This market includes various segments, such as public schools, private schools, post-secondary schools, corporate training, and child care.

According to the report by Facts and Factors, some of the main reasons or drivers to support the growth of the U.S. education market are:

• The increasing adoption of digital technologies and online learning platforms in the education sector provides more flexibility, accessibility, and personalization for learners and educators.
• The rising demand for skilled and qualified workforce in various industries requires continuous learning and upskilling of existing and potential employees.
• The growing awareness and investment in education among the government, private sector, and civil society aim to improve education quality, equity, and relevance for all.
• The changing demographics and preferences of the learners seek more interactive, engaging, and customized learning experiences that suit their needs and interests.

EdTech Ecosystem

Many EdTech startups are already innovating and disrupting the education sector, making this a highly competitive landscape. According to various sources, the following list includes some of the top startups:

• iTutor: A leading provider of educators solving teacher shortages in K-12 education across the U.S. in both home and brick-and-mortar settings.
• 2BeLive: A 'live video' virtual education platform created to teach, interact, and engage with one another online.
• Branching Minds: A web-based learning tool that leverages learning science and AI to streamline and personalize intervention for struggling students.
• Copyleaks: A cloud-based plagiarism detection platform that helps educators and students detect and prevent academic dishonesty.
• ecoText: A digital textbook platform that provides affordable and accessible textbooks for college students.
• Education Technology Professionals: A company that provides IT solutions and services for schools, districts, and education agencies.
• LiFT Learning: A platform that helps schools design and implement personalized, competency-based learning models.
• Rosalyn: An AI-powered proctoring solution that ensures academic integrity and quality in online assessments.
• Teachable: A platform that allows anyone to create and sell online courses, coaching, and memberships.
• ImmSchools: A nonprofit organization that supports immigrant and undocumented students and families in accessing and succeeding in education.
• Duolingo: A language learning app that uses gamification, personalization, and adaptive learning to teach over 40 languages to more than 500 million users.
• Coursera: An online learning provider that offers courses, certificates, and degrees from over 200 universities and companies in various fields and disciplines.
• Dreambox Learning: An interactive learning and gaming platform that uses AI to deliver adaptive math instruction for students from kindergarten to eighth grade.
• Paper: An online studying and tutoring service that provides 24/7 academic support, feedback, and essay review for students in grades 3 to 12.
• NovaKid: A language learning platform that uses video chat, gamification, and AI to teach English to children aged 4 to 12.

Time to Build??

Despite the prevailing competition, many industry players continue to serve the market in conventional ways. While the optimal focus for entrepreneurs—end customers or educational institutions—remains a topic of debate, I am inclined to believe that the game-changers will center their attention on the learners, forging direct-to-consumer experiences.

Such a focus taps into a vast, diverse market that emphasizes value and innovation. Catering to consumers allows for greater customization, convenience, accessibility, and engagement. In contrast, a business-to-business approach targeting educational institutions might not provide the quickest avenue for growth and innovation. These institutions often prioritize compliance and certifications, hindering educational alignment with rapidly changing market demands.

Generative AI's potential to revolutionize the education sector goes beyond mere software and technology. Echoing Satya Nadella's insights, AI promises to redefine productivity for everyone, indicating a multi-trillion-dollar market opportunity with the power to reshape the lives of people globally.

Generative AI stands at the cusp of overhauling the entire educational lifecycle. Through this technology, we can craft immersive, tailor-made experiences, ensuring everyone has limitless access to top-tier education and knowledge.

Let's build.?

Note: The sources for this article were gathered via Bing Chat. They are available upon request.