The Ever-Growing Ed-Tech Market

Every few months, a new study claims that gadgets in the classroom don’t improve learning—but that hasn’t stopped the educational technology market’s steady upward climb.

The ed-tech market totaled $8.38 billion in the 2012-13 academic year, the most recent year the Education Technology Industry Network has such information available. That number is up from $7.9 billion the year before, and up 11.7 percent from 2009, when the network began compiling these annual reports.

recent push to limit testing in schools—the segment may soon see a testing pushback that will hurt revenue down the road.

Revenue for management systems—such as Blackboard Learn—grew 40 percent, putting it back at levels last seen in 2010. The growth is consistent with more ed-tech products across the board, but the pre-’10 dip in this particular area happened in part because “nobody wants to call their product a ‘learning management system,’ because that doesn’t sound exciting,” Billings said. “So if a product is mainly [a learning management system] but also offers some content, they’ll try to put it in a ‘content’ category instead.”

Innovation Zone, or iZone, that acts as a middleman to match schools with ed-tech companies, depending on the needs of both, for these short-term trials. There are similar examples across the country, from a partnership between California’s Silicon Valley Education Foundation with the New Schools Venture Fund, to an organization called Leap Innovations that works with schools in Chicago.

are offered high-speed broadband, while others wait for their rationed-out Internet time. As the ed-tech market grows, companies will, by necessity, first serve the classrooms with the infrastructure to support their technologies. This can lead to a widening in the so-called “connectivity gap”—which activists say can directly contribute  to the achievement gap plaguing K-12 education.

As for future shifts in the market, Wan predicts there will be growing investor interest in so-called behavior management apps like Remind and ClassDojo, which allow teachers to communicate with parents more often and more consistently. Arts and humanities ed-tech tools haven’t taken off yet, in large part because success in those areas is much harder to quantify and assess than in STEM fields, Wan said. And digital textbooks, a once-hot area, are in a tight spot. “Digital textbooks still tend to be PDFs, and most people would agree that an interactive PDF might not be the best way to go, so [I] think we’re going to start seeing a lot of questions about what it means to be a digital textbook in this day and age,” Wan said.

The U.S. Department of Education has started independently tracking technology-related equipment spending after an influx in requests from researchers, according to department spokesman Stephen Cornman.  He added that, currently, ed-tech spending is included in general supplies and equipment, but this new information won’t be available until March next year.

The Education Technology Industry Network is also in the process of finalizing its report for the 2013-14 year. Billings said it projects that the amount of money schools spent on classroom technology will have continued to grow by a few percentage points. “We have come back after the economic downturn a few years ago, and we’re expecting the numbers to be good,” she said. “I don’t think the market is a bubble.”