Turbulence and Opportunity: What does it mean for the e-Assessment community
Tim Downie, eAA board member and founder of Adactia Consulting Ltd, shares his advice for Ed-Tech and Assessment Businesses in these times of uncertainty and turbulence. Tim is listed in our Consultants Directory. See below for more info
"The founder friendly investment environment is coming to an end as capital becomes harder to find and investors are looking more critically at the long-term sustainability of business models’
This comment, by a panelist from a leading Ed-Tech Investment house, at the Education Summit held at the London Business Centre on September 30th 2022 highlighted just how quickly the market has changed for Ed-Tech and Assessment companies over the last few months.
The UK economic and political environment is experiencing the kind of turbulence and uncertainty not seen for decades. Alongside serious geo-political events such as the war in Ukraine and the ongoing issues with Covid, especially in China, there are global macro-economic factors all playing a part. A key factor is that the post pandemic recovery is driving global demand faster than supply capacity can keep up. This is happening at the same time as a seismic shift in the workforce with people over 50 leaving the employment market in high numbers. These and other factors are creating economic headwinds that weren’t there even a few years ago.
The outcome of uncertainty and turbulence is an increase in the cost of investment including higher interest rates and inflation at levels not seen since the last century. These factors create an uncertain outlook for investors and business owners as they develop investment and growth strategies for their portfolios and businesses.
What does this mean for members of the e-Assessment community?
Firstly, the good news is that Education generally tends to be relatively recession proof. As an essential public service in most countries of the world it continues to be funded even during the toughest of economic circumstances.
The second encouraging factor is that of the estimated $10 trillion spent globally on Education each year only about $20 billion is spent on Ed-Tech. This leaves plenty of space within existing budgets for technology and service providers to make an impact if they can demonstrate the efficacy of their products and services.
There are also hotspots emerging within the Education, Ed-Tech and Assessment markets as a consequence of global economic changes.
Scarcity of skilled workers drives employers, and in some cases Governments, to invest in training and development of the existing workforce. For Assessment Service providers this creates opportunities to support the assessment and certification of skills both in the workplace and for the consumer market. An economy where labour and money are in short supply creates the perfect conditions for those Assessment Service providers who can deliver high quality assessment and certification within low overhead models.
Other hotspots that are being created out of global change are an increased focus upon Apprenticeships and skills-based training, lifelong learning to empower individuals to command a higher premium in the workforce and pathway services to support students accessing international opportunities to study at both K12 and Higher Education levels.
In his message of congratulations to the new UK Prime Minister Rishi Sunak, Indian Prime Minister Narendra Modi focused upon ‘Roadmap 2030’. This is an agreement that, in part, focuses upon improving the pathways for young people to study and work in India and the UK. This includes mutual recognition of qualifications between the two countries. This is just one, very significant, example of how important it will be for people in the global workforce of the future to have credible and certified skills and qualifications.
Difficult times ahead! Important factors to consider.
Even with these positive factors supporting growth in the Ed-Tech and Assessment markets there are still difficult times ahead for business owners and investors in the sector.
One impact of the pandemic was to massively accelerate the use of technology within Education and Assessment in particular. You only have to look at the massive increase in revenues that some online proctoring service providers experienced during 2020 – 22 to see how quickly market acceptance of remotely taken exams accelerated. Similar patterns were experienced by providers of digital exam platforms, content and learning management systems and of course by the very large-scale providers such as Google and Microsoft.
However, the investor market is now looking carefully to see how sustainable those business models will be in a post-pandemic educational system. Some change is here to stay but, in many cases, the rapid growth and sometimes almost exponential growth forecasts are no longer reliable as teachers and learners revert to pre-pandemic ways of working.
Assessment Technology and Service providers who are looking for investment, whether to grow or to exit, need to be able to demonstrate that their proposition has a bright future in a more ‘normal’ world and doesn’t rely upon the accelerating factors of lockdowns and travel restrictions.
Another area of focus for investors is the strength of the team within the business. As well as an inspirational and strong leadership team, investors want to be certain that the business will be able to recruit and retain a workforce with the skills needed to deliver long term growth. This means having a clear and credible recruitment and retention strategy as well as the ability to invest in the existing team to keep their skills and expertise up to date.
More than anything, to survive and thrive in an Ed-Tech and Assessment market that is facing budget and workforce challenges a company must be able to prove that its proposition is effective in delivering the outcomes it promises.
Efficacy can be as simple as taking cost out of existing operations or as ambitious as improving learning outcomes for students. Whatever the target, in a challenging environment, schools, awarding organisations, government ministries and individual consumers will only buy what is essential. Demonstrable efficacy will sell more products and services and massively increase the value of any business to investors of all types.
E-Assessment Association – Here to Support and Help
As an e-Assessment community we are in a period of challenge and opportunity unlike anything many of us will have faced before. The e-assessment association with its diverse membership of Qualification Providers, Assessment practitioners, technology and service providers, consultants, advisors and creative entrepreneurs is uniquely placed to share experiences and learn together. If you aren’t already involved, please think about joining one of the Special Interest Groups (SIGS) that look at specific communities within Assessment or if you would like to contribute to the newsletter or any of our events including our annual conference then please get in touch.
Tim Downie is a board member of the e-AA and founder of Adactia Consulting Ltd. Adactia provides strategy development and sales execution expertise to help Ed-Tech and Assessment Businesses grow in value.
The eAA Consultants Directory
The eAA has an online directory of independent consultants for those looking for the an individual with the right experience, skills, knowledge and capabilities to help their organisation with their assessment needs,
If you would like to be listed in our directory, please email [email protected] for more information.