The Future of EdTech: A case study on India and China

“EdTech is the next fintech”, many have claimed in the remote learning era. And until July 2021, China was leading the charge on this rapidly growing tech vertical. With major multinationals like Softbank pouring billions into startups via venture capital, innovative educational tools using AI and apps, and a potential market of 283 million students, China revolutionized online learning during lockdowns.

This came to a crashing halt when China heavily regulated its private education industry, citing the high-pressure environment, falling birth rates, and malpractices like false advertising and price wars. India has since taken up the mantle in Asia with good investment in 2021 (as shown by global intelligence firm HolonIQ), several startups attaining unicorn status and growing household expenditure on education. Yet the government recently expressed similar concerns over malpractices and pricing, which begs the question: What lessons can India take from China to create a healthy environment for innovative EdTech?

Simply put, the aim should be to foster growth in EdTech, without allowing malpractices in pursuit of profit or killing the golden goose altogether.

Looking at China’s EdTech boom, China’s key strength was progressive national planning with constant innovation and “deep integration” of digital technologies like AI, big data, or even internet, into every level of industry and society. This encouraged students to adapt with COVID-19 and adopt technologies to continue learning. India too pivoted, with online certifications, live tutoring, and AI-based learning making education accessible amidst lockdowns. Yet in August 2021, the School Children's Online and Offline Learning (SCHOOL) survey across 15 states reported only 24% of students in urban areas and 8% of those in rural areas studied online regularly (as shown by India Today).

Thus, it becomes apparent that the actual benefits of the EdTech boom are largely restricted to upper echelons of society. To maximize the benefits of educational technology with improved access and quality of education for the whole population, India needs to implement stronger integration policies for digital technologies across its education sector (amongst others). This includes updating dated digitization policies implemented pre-COVID and improving infrastructure which affects online learning for middle- and lower-income students, such as internet access. With stronger policy support, India can look forward to a flourishing EdTech sector where the benefits of digital education penetrate throughout the student population.

Policy is a double-edged sword, however, and India can also learn from the (government directed) downturn in China’s private education sector. Common concerns for both countries have included companies using deceptive pricing and advertising for online courses. Chinese authorities fined such companies before clamping down on for-profit education overall, while India’s major EdTech companies formed the self-regulatory India EdTech Consortium (IEC) this January following government concerns.

While the IEC is new, it could prove to be a smart decision down the road (akin to NASSCOM in the ‘80s for the IT sector). Ideally, it will enable private players to provide quality, affordable education to students by matching IEC regulations to accepted standards, set by government education authorities (thereby preventing competitive practices like false advertising); while generally deterring the need for state intervention in the future. As seen in China, the profit motive is still crucial (and essential, for entrepreneurship and innovations) for attracting investment and growth in the nascent EdTech industry- making state intervention a risky turn for the industry.

EdTech can transform India’s education sector in the following decade- but only if the industry can maintain a robust public-private partnership with each side pulling their own weight over the years. Whether they can walk the tightrope, which many before them have failed, is to be seen.

Note: a different variation of this piece was also published on the Oxford Economics company blog.