Electronic Education and Training Technology Business

Report Highlights

• American expenditures on electronic educational and training technology and services, which will total an estimated $17.2 billion in 1999 will increase to $49.3 billion by the year 2004, expanding at an AAGR nearly four times as high as the 6.1% growth rate of educational spending overall. Corporate training technology expenditures will account for the largest portion of total education technology spending in 2004, 34.4%, followed closely by K-12 institutions, which will account for 33.7% of projected spending totals. Post-secondary education technology spending will make up 28.4% of projected totals, while military and other government technology training expenditures will tally 3.5% of totals.
• By the year 2004, networking and telecommunications will be the largest product category of educational technology (ET) spending, eclipsing educational hardware, which has historically led educational technology budgets. Distance learning applications will be the third largest product category, moving ahead of software - the fourth largest category -and consulting and technical training. Public institutions in all sectors are expected to account for 45.8% or $22.6 billion of total expenditures, while spending on private institutions, including corporations, passes 54.2% of totals, or $26.71 billion.

INTRODUCTION

OBJECTIVES

As recently as a decade ago, computers in schools, although increasingly present, were still more a novelty or curiosity than an integral part of the educational process. Even in the corporate world and in the military, which had each undergone computerization revolutions in the 1970s and 1980s, the use of electronic technology for training purposes remained marginal.

The decade of the 1990s, however, has ushered in a sea of change in educational institutions at all levels. At the start of the decade, for instance, the ratio of students to computers in America's K-12 schools was about one computer for every 25 students. By the end of the decade that figure will be approximately one computer to every six students. In 1990 virtually no American public schools had even rudimentary local networking capabilities. At the close of 1999 fully 80% of schools have Internet access, and over 90% of schools with over 500 students have functioning local area networks. Almost all of corporate training in the early 1990s, even in large multi-national companies, still took place, as traditionally, in special classrooms or at centralized company training centers. By 1999, nearly a quarter of all corporate training was being delivered by electronic means right to employee's desktops.

The introduction of the Internet and World Wide Web into American schools has, of course, been the subject of much fanfare, focused on the challenge, enunciated by the Clinton administration in 1995, of wiring all of America's schools to the Net by the year 2000. On a less publicly visible level, however, a whole, ever-expanding gamut of new instructional and education management technologies, from video laser-discs to satellite enabled conferencing, are steadily becoming mainstays of the educational experience for a majority of American students. This process is being driven forward not only by political leaders, but by teachers, administrators, parents, and, perhaps above all, by the current generation of students, the first to grow-up in a world of personal computers and the Internet.

As educational institutions move forward from the 1990s into a new decade and a new century, the key question they face is no longer whether to employ new electronic educational and training technologies, but which ones to employ, and where and how to do so most effectively. It is now a widely accepted fact in most quarters that educational technologies are here to stay, and, for better or worse, are changing all facets of the teaching and learning experience.

The embrace of computer and other new technologies by educational and training institutions has spawned a substantially new industry devoted to educational and training technology and services. This new industry has few connections (the exception being textbook publishers turned school software developers) to the traditional education services industry, which comprises, for example, textbook publishers, construction companies, stationary, paper and school supply companies, and cafeteria services. This report will explore the unique structure of this new industry, one made up of a wide variety of enterprises: computer hardware and software companies; networking and telecommunications equipment and service providers; Internet service providers; electronic publishers; satellite video providers and programmers; web-ware developers; computer training companies; and consultants. It will also explore the recent dynamics and trends of the different educational markets they serve. Among the key questions the report will address are:

• How the four major educational and training markets, K-12, post-secondary, corporate and defense/military differ, and are similar, in terms of financing, expenditures, technology usage, and demand patterns; and

• What the key potentials are for growth in each market.

REASONS FOR REPORT

The electronic education technology and training industry has, through its short history, been a strange meeting ground for different companies and industries: a few long-time participants in education; many more entirely new to the field; some education specialists; and others whose core is in consumer and markets. This report is designed for marketers from each of these industries. By focussing on how computer technology is changing the traditional education markets, it will help marketers from companies that have been involved with education in the past and want to shift their educational orientation to capitalize on new technology. It will also help supply marketers from companies just moving into the educational sector with a detailed analysis of the unique patterns and trends that are shaping the educational technology .

The field, driven by accelerating technological change, which shows no sign of ebbing, has moved into a myriad of different product applications. These applications include palmtop computer information appliances; web based training; satellite television instruction; multi-media encyclopedias; and virtual classrooms.

CONTRIBUTIONS

This study delineates the most important developments in electronic, instructional, administrative, evaluative and management technologies over the past several years, tracing the history, as well as reporting on the current state of the art. It will examine the near term commercial opportunities and challenges of a number of different technologies and products. Through the study of historic patterns, new or impending technological breakthroughs, and extensive dialogs with key industry insiders, institutional forecasts are made of dominant market expenditure trends projected from 1999 through the year 2004.

SCOPE

This BCC report includes all aspects of electronic educational technology, including computer hardware and software, network and telecommunications, distance learning and technical training and consulting. The report also takes into account historic and emerging enrollment trends, student demographics, technology expenditures, and usage patterns. The report projects critical trends that are likely to shape the near future based on a thorough historical overview and detailed analysis of the present.

METHODOLOGY AND SOURCES

Preparation of this report involved in-depth study and critical analysis of published data from a wide variety of government and private sources. Industry projections have been made by BCC-based original studies of economic, social and demographic trends, as well as critical examination of projections made by industry analysts and those found in public sources.