How to solve the Digital Divide in European edtech

By Charles McIntyre, CEO of IBIS Capital and Co-Founder, EdTech Europe

The Europe Union has a workforce 45% larger and a student population 30% larger than the US, yet Europe invests a fraction of what the US does into EdTech businesses. Since 2007 Europe has invested less than 10% of the $6bn invested by US investors into e-learning. We should be very worried.  

The knowledge economy is a fundamental support to the rest of our economic lives. Without it we lose our ability to develop skilled workers, build competitive advantages as nations and generate growth. To keep developing the knowledge economy we need to ensure, as with other sectors, that we maintain a level of innovation to improve the efficacy and efficiency of our learning systems.

In large areas of our lives, digital has superseded our former analogue selves. Industry sectors such as media and entertainment have responded quickly to the digital opportunity. Approximately 35% of this sector is now digital. This compares to approximately 3% of the education sector. Education is under-innovated and severely underinvested. 

However, digital for education is not just about reformatting books and training manuals it is about applying digital technology to deliver a new form of learning architecture. An architecture that harnesses the social reach of the internet, that delivers personalised learning and training that can automatically adjust to an individual’s learning competence and that uses big data analysis to understand the most effective ways for learners to progress.  

Part of this new learning architecture is providing appropriately valued certificates for online course completion. One of the incentives for any learning or training exercise is being able to take away a certificate that is recognised by other institutions or employers.  At the moment this a large gap in the armoury of e-learning. You complete the course but nobody values the certificate. If we can provide the same accreditation and testing for the online world as the offline, then the sector will grow exponentially. 

So what can be done in Europe? I believe that there are two practical things that the EU could do now that would radically alter the education and training landscape here in Europe. 

1.     Stimulate capital flows to the EdTech market:

Follow the model used in Israel that kick-started its hugely successful tech venture investing. So my proposal is that the EU commits to a €500m pan-European fund that will make up to €5m investments on a 2:1 basis. So for every €1 of third party money invested in an EdTech company this EU fund will invest €2 on the same basis. This is not soft money as it would be invested on the same commercial terms. The importance of this fund is that it provides risk capital into part of the market where we there is a market failure in Europe. We also can see, as in the Israeli example, that intervention can make a big difference. In 2014, Israel boasted the largest concentration of start-ups per head in the world.

2.     Create pan-European Certification for Online Courses:

As I have said, a certificate from an accredited body for training or education is a key element to course participation as it provides the passport for skilled job applications. In the online training and education world this issue has not been properly addressed. A supra-national accreditation body for online courses would provide the necessary support for ensuring effective use of online courses. The result would be a growing single digital market for skills. Individuals can then rapidly acquire new skills, respond to changes in market conditions and reach a wider employer audience. 

Implementing these two actions would plant a large flag in Europe saying that we are serious about responding to a new digital world. The attraction of this approach is that the cost is significantly less than building say, one new university in Europe, and the impact would be both significant and sustainable in the long term. Investing in EdTech is a virtuous circle in so many ways. There is an obvious benefit to our collective skill base, but it also ensures that Europe which has been home to some of oldest education establishments in the world retains that edge into the future.