Education Week - Navigating the Ed-Tech Marketplace - (Page S2)

Major Policy Shifts, Economic Forces Shape the Market Personalized learning, digital devices, better budgets fuel spending on education technology BY SEAN CAVANAGH T he multibillion-dollar market for educational technology is in one sense being shaped from the top down- through major policies and economic forces influencing spending across states and school districts. But it's also being fueled from the ground up-by a belief among school leaders and entrepreneurs, that digital tools will give schools the power to customize learning to meet individual students' needs. Researchers and industry groups studying the market say they now see a growing demand for ed-tech products, an uptick that has followed a prolonged period of lean budgets at the state and local levels. Some of that demand is being driven by big shifts in state laws and district policy, which have collectively ramped up the pressure schools face to raise academic achievement and evaluate the performance of schools, students, and teachers more precisely. Other nationwide policy shifts are also at work, such as the adoption of the Common Core State Standards and the development of online tests aligned to them, both of which have prompted school officials to look at ed-tech purchases to prepare them for those new benchmarks. Yet much of the activity in the market today is also focused squarely on the promise-however vaguely defined-that ed-tech products and services will help teachers transform learning, student by student. The goal, as espoused in the selling points of edtech companies across the market, is to create "personalized learning," or instruction that can be shaped through devices, platforms, and systems to raise the performance of students of very different ability levels. An increasing number of districts are counting on mobile devices such as tablets, in particular-tools they believe students are already comfortable using-to deliver that specially tailored academic content. For districts and schools-traditionally, the main buyers in the market-the challenge is to figure out how the myriad tools touting different benefits can meet those different needs. It is not easy. Despite the omnipresence of technology in many schools and students' lives, many ed-tech products in potentially promising areas, such as personalized learning and blended learning, are far from maturity, said Larry Johnson, the ceo of the New Media Consortium, an Austin, Texas-based associaS2 | NAVIGATING THE ED-TECH MARKETPLACE EDUCATION WEEK * June 11, 2014 tion that helps K-12 and college officials make sense of digital trends. "There are a lot of vendors in the market who hope they can make a hit in this area of focus," said Mr. Johnson. But for schools, the reality is that "it's early days," he said. "It's a confusing market. We don't have a clear way of doing things." Budget Picture Brightens Overall, data show that state K-12 budgets have stabilized and rebounded since the nadir of the Great Recession, which officially ended in late 2009 but drained state revenues well after that. Even before states and districts had climbed out of that hole, the market for K-12 educational technology grew by 3 percent, to $8 billion, from the 2010-11 to 2011-12 school years, according to a report released last year by the Software & Information Industry Association, a Washington-based trade organization. That research was based on confidential sales information from companies who responded to a survey by the association. Since then, the budget picture has brightened somewhat. Forty-two states approved spending increases for K-12 education in their fiscal 2014 general-fund budgets, while just five states cut funding in that area, according to the National Association of State Budget Officers, in Washington. That represents a turnaround from four years earlier, when 30 states made targeted cuts to K-12 education for their fiscal 2010 budgets. Not that the financial picture for schools is rosy. At least 34 states provided less per-student funding in 2013-14 in inflation-adjusted dollars than they did before the recession, according to the Center on Budget and Policy Priorities, a Washington policy organization that advocates for low- and middle-income Americans. But the improvements appear to be helping spur spending on educational technology. Information put forward by the Association of American Publishers this year said that year-to-date sales of combined digital and print instructional materials in 2013 were up 7 percent over the previous year, according to the Washington-based association. Meanwhile, there appears to be plenty of faith in the strength of the market among investors putting PAGE S4 > SOURCE: GSV Advisors > www.edweek.org/go/edtechmarket Venture capitalists made more than 200 disclosed investments in education and training programs in 2013, a significant increase from a few years ago. Roughly 40 percent of those deals involved K-12 businesses, according to a recent analysis. 2009 K-12 Higher Education Bridge Companies focused on transitions between K-12, college, and career Corporate Companies focused on education and skillstraining within corporations Multisector Deals involving companies with products that span across sectors Test Prep 1 60 0 203 10 57 3 8 17 22 7 2013 88 28 22 SNAPSHOT OF EDUCATION DEALMAKING w iSTOCKPHOTO http://www.edweek.org/go/edtechmarket

Education Week - Navigating the Ed-Tech Marketplace

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