COVID-19 Special Outlook
Across the board, organizations of all types are expecting to be worse off in the short term as a result of COVID-19. Education institutions are expecting to be the hardest hit with 91% of respondents indicating they will be moderately (61%) or substantially (30%) worse off in the short term.
On the other hand, only 50% of organizations providing technology services to education are expecting to be worse off in the short term, with one third expecting to be better off due to COVID-19, presumably expecting their tech services to be more in demand as institutions pivot to online delivery.
Short Term Impact of COVID-19 by Organization Type
Long Term Impact of COVID-19 by Organization Type
While expectations for the long-term paint a more positive picture, still over 50% of education institutions expect to be worse off as a result of COVID-19. Concerns around the future of traditional international education models and also optimism that “the time for online learning has come” are evident in sentiment of respondents.
Most investors in the space see no change for their business in the long term, with 58% of tech services expecting positive long-term impact as a result of expectations around “huge growth in online platforms that are more sophisticated than now, online proctoring of in-home assessments and non-traditional TNE with mixed modality”.
1. Current and Future Conditions
Over 50% of respondents marked the current conditions for global education moderately or substantially worse than six months ago, a figure which has jumped from 24% in Sept 2019 and 20% one year ago. Although one third of respondents expect conditions to improve in the next six months, over half are still expecting conditions to be worse than today, sentiment echoed in comments such as “sharp dip, slow recovery”.
Current global education conditions compared with 6 months ago
Expected conditions, next 6 months
Three times as many respondents expect a decrease in enrolment/customer demand since the last global survey, now with over 40% of respondents signalling they expect less demand going forward, up from 12.6% in September of last year.
At the same time, just over 40% are expecting an increase in enrolment/customer demand in the next 6 months, likely representing the different categories of respondents from institutions versus service and tech providers. However, clearly overall the market is expecting reduced demand compared with six and twelve months ago.
Change in Demand Outlook over Last 3 Surveys
Change in Demand Outlook by Region, March 2020
Analysis by region shows some differences in expected enrolments/customer demand over the next six months with Oceania expecting the biggest dip in demand, likely resulting from the significant exposure to Asian markets for international education
Respondents from Africa and the Middle East show the greatest confidence in the outlook for growth followed by North America, where 49% of respondents expected growth in demand over the next 6 months, with one respondent commenting “COVID-19 compels the world to be more connected. It will stimulate collaboration and open up new opportunities”. Respondent, North America.
45% of respondents from Asia and Europe expect decreasing demand in the next half year, with a number of comments connecting future demand to new ways of delivering learning. “I have a language learning company providing corporate solutions. In Italy we were stuck with face to face learning, now business understands the real value of digital transformation. Respondent, Italy.
3. Growth Strategy
A quarter of all respondents now identify new technologies as their primary growth strategy, an increase of 10% since September 2019, with little doubt that COVID-19 is a key driver of this change, with one respondent noting, “we offer a platform for delivering live online classes and are experiencing a huge increase in business as teachers and schools around the world seek solutions for delivering live online classes”. Respondent, North America.
Less respondents indicated that new product development was their top driver of growth (from 26% to 21%). Growth into new markets has seen a dip of 6% (from 27% to 21%), while growth in existing markets (25%) and growth through operational improvements (9%) are steady over the last two surveys.
One respondent notes, “The market is adjusting rapidly from F2F to online. This has re-focussed organisations previously reluctant to change, to invest in EdTech and new opportunities for flexible delivery”. Respondent, UK.
Top Growth Strategy over Last 3 Surveys
Top Growth Strategy by Sector, March 2020
Respondents from all sectors with the exception of PreK identified technology as a key growth strategy, with 30% of those in the life-long learning and vocational sectors and one quarter of those in higher education selecting technology as their top strategy for growth.
PreK, K12 and Corporate training sectors are seeking the most growth in existing markets compared with other sectors, while those in the Vocational and K12 sectors are seeking growth via operational improvements.
“I am hoping that with COVID-19, educational institutions will look at technology solutions to help solve the challenges in giving skills to students and I would like to see a part of that solution become full time long term…..opportunity for a new norm.” Respondent, India.
4. Workforce Changes
There has been a steadily worsening outlook for changes to workforce in education over the past few surveys. In March 2019, only 7% of respondents expected a decrease in the size of their organization's workforce within the next six months, with that figure jumping almost four-fold to 26% in the March 2020 survey.
Short term challenges with potential gains in the longer term is a pattern across multiple aspects of the March 2020 survey. “We will have short term cash flow challenges due to schools not being able to pay, but long term gain as schools will now be more open to online tools post virus.” Respondent, North America.
Workforce Outlook over Last 3 Surveys
Workforce Outlook by Region, March 2020
However, regional differences are stark with 45-50% of respondents from North America and Asia expecting growth in their organization’s workforce within the next six months, compared with less than 10% from the Middle East and 20% in Europe.
While potentially a challenge for skills shortages with their current workforce, some respondents see the possibilities offered by online delivery for incumbent institutions. “Could be a pivot point in the adoption of online technologies by legacy providers.” Respondent, Asia.
Unsurprisingly the biggest anticipated impact on education workforces are in Higher Education and Corporate Training with approx 30% expected their workforces to be reduced over the next 6 months. 25% of Pre K, K12 and Vocational institutions are expecting reduced workforces. 18% of Lifelong Learning Organizations are expecting reductions which whilst the lowest for March 2020 is still higher than the average across all sectors for the two prior surveys.
Workforce Outlook by Sector, March 2020
Workforce Outlook by Organization Size, March 2020
There is a clear pattern to expectations about workforce growth, with those from larger organizations reporting negative expectations about workforce growth over the next six months. Almost 44% of organizations/institutions with over 10,000 workers expect their workforce to reduce in number in the next six months.
“In the long run, the changes wrought by Coronavirus will help drive substantial innovation in education, which will be great for companies that lead innovative change (and potentially very damaging to institutions that are resistant to change)”. Respondent, 10,000+ Employee Org.
Almost 85% of respondents expect disruption to their part of the education market before 2025, with 57% of those expecting disruption within the next 24 months*. An additional 12% expect disruption to their market by 2030. 10% of respondents expect that disruption will never occur to the education system, half of those from Asia, and the remainder from North America and Europe.
Global responses are a reminder of the different impacts of macro-changes, with one respondent from Africa noting, “Need to consider implications for students in developing countries where EdTech isn't always an option”. Respondent, Africa.
*Expectation about disruption in the next 24 months is a new question inserted in the March 2020 survey
Disruption Expectations over Last 3 Surveys
Disruption Expectations by Region, March 2020
Respondents from Oceania, the Middle East and North America expect disruption sooner than in other markets, with one respondent noting, “COVID-19 has had a devastating and major impact on education globally. As the world recovers, it will be interesting to observe how the disruption transforms the mentality around the value and need for online learning”. Respondent, North America.
In Europe, half of all respondents expect disruption within the next 24 months. However, not all disruption is viewed as a negative event, with one respondent noting, “this is a one time golden opportunity for change. Educators HAVE to try to use technology now, they have no choice. This is the time to disrupt the education system!” Respondent, Europe.
The areas of Corporate Training and LifeLong Learning expect the greatest levels of disruption*, each with over 90% of respondents expecting disruption to their part of the sector by 2025. “The workforce today expects dynamic learning portals but HR is still struggling with outdated training methods which do not jibe with the current generation, of which 50% are millennials.” Respondent, Corporate Training Sector.
Respondents from the Higher Education, Vocational and K12 sectors have similar expectations with respect to disruption, with between 79% and 83% expecting disruption by 2025. Over 7% of respondents from the Vocational sector indicated that disruption would ‘never’ occur in their part of the sector.
*With the exception of PreK, which has a very small sample size in the March 2030 survey.
Disruption Expectations by Sector, March 2020
Disruption Expectations by Organization Size, March 2020
While the largest organizations/institutions generally expect disruption sooner, those from organizations of all sizes typically expect disruption to occur before 2025.
As disruption has different meaning to different contexts, the impact will also vary depending on organization size and part of the sector, with one respondent noting “It's looking disastrous right now, how quickly we can restore confidence and normal operations will be key.” Respondent, 1-20 Employee Org. and another, “We’ve been closed for 2 weeks. Teaching being moved online with minimal planning and guidance. Unknown effects short-term and longer term”. Respondent, 2,000-10,000 Employee Org.