EdTechX on COVID-19: ‘A great digital leap for both education and the future of work’

Charles McIntyre, CEO of IBIS Capital and EdTechX Global; and Benjamin Vendrenne-Cloquet, CEO of EdTechX, took the ‘virtual’ floor for a powerful keynote presentation at the inaugural EdTechX digital summit

The COVID-19 crisis has brought brought digital education and work into the mainstream, said EdTechX CEO’s at EdTechX Europe’s inaugural online summit.

Charles McIntyre, CEO of IBIS Capital and EdTechX Global; and Benjamin Vedrenne-Cloquet, CEO of EdTechX, delivered a topical keynote presentation on COVID-19: The [great] disruptor of education.

Labelling the outbreak a ‘Cerberus-like crisis’, Vedrenne-Cloquet (V-C) delved into the virus’s ‘three heads’, describing the health, economic and psychological impacts of the virus, exploring how these will affect the future of education and work.

Health impacts

This is not the first time that the world has been brought to its knees by a pandemic, and it’s by no means the last. Speaking at the event, V-C cited a range of similar outbreaks that infected anywhere between 12m–200m people, lasting any length of time from months to multiple centuries (smallpox was around for 200 years before being declared eradicated in 1980).

“Optimists will say we’re better equipped to deal with the crisis now than the 15th century; pessimists will say our open, borderless, fluid societies and economies are actually paradise-like, dream-like conditions for a virus of this kind” – Benjamin Vedrenne-Cloquet

Economic impacts

The outbreak has driven the global economy towards ‘unprecedented milestones’, with US data revealing that the crisis has:

  • Caused unemployment to soar from 4% to 15%
  • Caused FED interest rates to shrink from 2.5% to 0%
  • Caused oil crashes of 70%
  • Reduced the Purchasing Managers’ Index (PMI) from 52% to 37%
  • Caused a threefold increase in stock volatility
  • Spurred a US$2.5tn increase in quantitative easing

The International Monetary Fund (IMF) has deemed the coronavirus pandemic as the worst economic crisis since the Great Depression in the 1930s.

“This is a very different animal to the Great Depression…it came from human problems, monetary and financial shocks that hit the global system…it has some of the same feel, a feel of panic, a feel of volatility, but it’s much closer to a major snowstorm or a natural disaster than a 30s depression, it’s quite different” – former chair of the federal reserve, Ben Bernanke

V-C explained that the outbreak is leading the world towards a new economic order; one in which China – the virus’s origin country – heads a new era of global economic leadership. Thanks to its rapid and varied responses to the pandemic, China will be the only country in the world that will not experience GDP reduction as a result of COVID-19.

Psychological impacts

By the end of April, a third of the global population were experiencing some form of lockdown; while 1.52bn children were affected by school closures by the end of March; and today, restrictions remain for a huge portion of the international workforce. Human daily activity came to an almost complete stop, and with most of the population working in isolation, experts forecast a secondary ‘burnout’ pandemic post-COVID-19.

“So it looks like we’ve hit the worst of times, but, as often, there is another side to the coin” – Benjamin Vedrenne-Cloquet

The future of education

Source: Wikipedia

When you consider the the Edtech Adoption Life Cycle pre-pandemic, edtech was predominantly considered a tool for innovators and early adopters. But as V-C highlighted, coronavirus has pulled education technology into the mainstream, fast-tracking the adoption process by 5-10 years.

“This could be the biggest sustained, mass experiment in online education since the internet was founded in the 1980s” – Bloomberg

When the lockdown was announced, nation-by-nation, schools, colleges, universities and other education providers and businesses scrambled to implement tools that would enable remote working and learning. This is a major boon for the edtech sector as, inevitably, technology usage has grown significantly and at a rate never seen before.

Since the start of the crisis:

  • Use of Google Classroom has grown 400%
  • Use of Byju’s has grown 60%
  • Use of Duolingo has grown 60%
  • Use of Pearson has grown 44%

But as V-C stated in the presentation, a challenge edtech companies now face is that the majority of this surge has been driven by non-paid adoption.

“I may make here a cynical comment – while it is great to have edtech companies reacting cohesively and generously to the crisis by providing their solutions for free, they may have missed the opportunity to prove they can monetise at scale” – Benjamin Vedrenne-Cloquet

Despite this, while long-term usage of classroom tech will vary depending on the product, V-C emphasised that overall, come the end of the crisis, “all product segments will be net winners vs. pre-COVID”.

Learning from China

As a nation, China immediately recognised just how much the outbreak would disrupt the education sector, quickly declaring the virus a national emergency.

Now, China is has provided a model for how to effectively handle a crisis such as this. The country reacted early on with the creation of a national taskforce, including:

  • A national online cloud classroom
  • A national tech alliance between the government, Huawei, Alibaba and Baidu, providing 7,000 servers for 50m students, alongside curated software apps and solutions
  • Nationally-televised live broadcast classrooms to reach rural areas deprived of 4G access

“So if there’s a country where edtech has gone mass market in no time and in a very efficient manner, it is China” – Benjamin Vedrenne-Cloquet

According to Bloomberg data, all education stock in China with a digital delivery component – such as TAL Education, New Oriental, GSX and Koolearn – has increased by at least 25% in price during the crisis.

‘Digital leap in the workplace’

There’s no doubt that the outbreak has transformed the way we work, with McIntyre and V-C calling the work from home (WFH) or remote working movement ‘The Next Normal’ for the workforce.

COVID-19 has cemented video communications platform Zoom‘s place in history, deeming it the fastest digital service ever to reach 200m users in just three months; a monumental achievement when you consider that Fortnite took 18 months to reach 100m users, and Instagram took 24 months to reach 100m users.

Slack has also seen significant growth throughout the lockdown, seeing a 20% rise in average daily messages; as well as Microsoft Teams, which experienced 3.7 times WoW growth in March.

With the potential for human interaction being passed over in favour of automation, what can we envision for ‘The Next Normal’ in the workplace?

McIntyre and V-C picture a future of work that can be separated into four categories:

  • Virtual/remote – some employees will never go back to the workplace, maintaining the remote working model and increasing flexibility
  • Onsite flexible – some businesses will favour a bled of digital and online shifts, defining a plan for staged return based on local context
  • Onsite critical – some will return to work with increased flexibility, learning how they can operate in staggered shifts
  • ‘Other’ – the implementation of reskilling programmes, ‘training sabbaticals’ and large-scale lay-offs that could impact a significant portion of middle management

Greater levels of technology, automation and upskilling opportunities will be the most favourable drivers for the future of work.

What next?

“In a world of accelerated disruption, we are keen to see how this shapes out across education and training” – Charles McIntyre

The short-term impacts of the outbreak mean we have witnessed a headlong rush to online video delivery to replace face-to-face contact. But McIntyre explained that the longer-term structural impact depends on human behaviour and willingness to adopt digital solutions that aim to enhance, rather than replicate, face-to-face learning and experience.

“Video attempts to substitute classroom broadcasting but this is with less engagement and empathy. Online classroom tools that add levels of intelligence through adaptive learning, bespoke content and engagement are the long-term positive contributions of learning efficacy” – Charles McIntyre

Technology for learning will experience considerable gains – especially those in the business of Online Program Management (OPM). Here, McIntyre used the example of digital course provider FutureLearn, which hosted 1m new learners in the month of March alone. With its requirements for immersion and travel, on the other hand, international education may never be the same.

“The point is that, in the upcoming recessionary environment, resources will be scarce, budgets will be trimmed, investors increasingly cautious and access to cash will be key” – Charles McIntyre

The EdTechX CEOs listed the three biggest challenges the world now has to contend with:

  • A recession of US$4tn to the global economy this year alone
  • Unemployment reaching levels never seen before
  • Repayment programmes leading to a mountain of public debt

“As they say: “act in haste and repent at leisure, but sadly we can’t wait, and so the levers we need are focused investment to accelerate technological advancement and deliver improved productivity. The Faustian Bargain of the capitalist world is that we borrow today on the basis we can repay out of tomorrow’s growth. If we don’t have fundamental growth, the system breaks down, so reshaping our world to create real 21st century skills and growth is vital for the next stage of our story” – Charles McIntyre

It’s now vital that we reconsider demand vs. supply with the student as the consumer, since the reduction in household incomes caused by COVID-19 and the resulting lockdown has a knock-on effect on consumer ability to spend on education. How then, do we enable affected households to still benefit from improved education, despite the declining economic landscape?

McIntyre suggests that here, supply has a huge role to play, with distance learning providing greater reach, improved efficacy and lower cost.

“Making edtech work effectively will have a vast impact on the world’s youth in the future” – Charles McIntyre

Dire need for investment

In the last 10 years, edtech investment has increased tenfold, reaching US$5.4bn in 2019. And with the edtech market standing at three times the size of the global media and entertainment sector, edtech’s fast-growing status will result in expansion of over 2.5 times in the next five years. But for innovation to continue, the sector needs sustained investment.

Ultimately, in a world post-COVID-19, digital will be mainstream, and that means experiential or live events end up as the premium. This is ‘The Next Normal’ post-digital transition in action – and it’s something we’ve already seen in media (cinema vs. on-demand), music and entertainment (live concert vs. streamed), and even e-commerce and retail (visiting a shopping centre vs. ordering online). The same will be true for education and work.

As V-C poignantly concluded:

“And that’s what COVID and social distancing is telling us – that we have entered a ‘Next Normal’ where most human-to-human physical and experiential activities are rarifying, and so becoming scarce, and so, premium. This may be the sign of a much greater disruption. This may be the sign that 2020 is actually the year when digital capitalism has gone mainstream”

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