Research
The Future of E-Learning Is More Growth
By virtually every measure, electronic learning is experiencing unprecedented growth and will continue to do so for the foreseeable future. A new analysis and forecast released this month by research firm Ambient Insight bolstered previous research in this area, showing that electronic learning, by dollar volume, reached $27.1 billion in 2009 and predicting this figure will nearly double that by 2014, with academic institutions leading the way.
According to the report, "The Worldwide Market for Self-paced eLearning Products and Services: 2009-2014 Forecast and Analysis," by 2014, e-learning will reach a dollar volume of $49.6 billion, representing a compound annual growth rate (CAGR) of 12.8 percent over five years. The dollar figures in the research included expenditures in five categories of electronic learning technologies, or "self-paced e-learning products." These included: packaged content, custom content development services, learning platform and tool hosting services, authoring software and tools, and installed learning platforms.
Sam Adkins, chief research officer at Ambient Insight, explained that in North America--the largest region for electronic learning--the growth is being driven by academic institutions, both preK-12 and higher education.
The report said, "The largest expenditures for packaged content in 2009 were made by the PreK-12 and higher education buyers, which accounted for 43 percent of all North American purchases. These institutions combined outspend the corporations. The higher education segment will be the largest buyer by the end of the forecast period driven by the robust expansion of online programs in both non-profit and for-profit institutions. The for-profit institutions are experiencing an explosion in demand and they are outspending their non-profit counterparts."
North America, the report said, will continue to be the largest e-learning market for the next five years, while Asia, with a "breathtaking" five-year CAGR of 33.5 percent, will edge out Western Europe by 2014 to take the No. 2 slot.
In higher education, the current economic situation is helping to fuel the growth, Adkins said, particularly in career and vocational programs. For-profit institutions are dominating online education, owing partly to this trend. The chart below, covering the United States specifically, shows that not only did for-profits dominate in total 2009 enrollments, but they also dominated growth from 2008 to 2009.
| 2009: Top U.S. Higher Education Online Institutions by Enrollment Totals |
| Institution | 2009 Online Enrollment Totals | Online Enrollment Growth from 2008 to 2009 |
| University of Phoenix Online | 310,400 | 22% |
| Kaplan University | 68,200 | 47% |
| DeVry | 56,300 | 26% |
| Strayer University | 54,300 | 25% |
| American Public Education | 53,600 | 49% |
| Bridgepoint Education | 45,500 | 101% |
| Walden University | 40,500 | 17% |
| UMassOnline | 40,000 | 18% |
| Liberty University | 36,200 | 15% |
| Education Management | 34,800 | 54% |
| Capella Education | 33,900 | 26% |
| Grand Canyon Education | 32,600 | 53% |
| University of Maryland University College | 30,400 | 17% |
| Source: The Worldwide Market for Self-paced eLearning Products and Services: 2009-2014 Forecast and Analysis, Ambient Insight, February 2010. |
"Considering that the for-profits market aggressively to adult students, the demand is heavily concentrated in the adult demographic," Adkins said.
In prek-12, growth is being fueled by the proliferation of online virtual schools that are part of state and local education systems and online charter schools that operate independent of these systems in many cases. Both are helping preK-12 experience a 17 percent CAGR over the next five years, outpacing overall projected growth by more than four percentage points.
Interestingly, the report noted that the United States is unique in the world, even in North America, in the organzation of its online preK-12 programs:
The PreK-12 systems in Canada and the US are quite different," the report said. "For example, the virtual school and the cyber charter school phenomenon is a distinct US trend. Virtual schools in the US are administered by the school systems and many offer full time programs to students. There is only one virtual school in Canada (Northern BC Distance Education School) that has fulltime students. They had 130 fulltime students in the 2008 school year. In contrast, there were over 200,000 students enrolled in virtual schools in the US as of 2009.
Also, in the US, many virtual schools purchase content and services from commercial "education management" firms such as K12, Inc., Insight Schools, Advanced Academics, and Connections Academy. The annual enrollment growth rates for these firms are impressive. For example, from 2008 to 2009, K12's enrollments grew by 35%.
As of October 2009, there are only two charter schools in Canada and neither of them offers online courses. In contrast, there are over 185,000 children in the US enrolled in cyber charter schools. By 2014, 1.5 million US children will be taking online classes in cyber charter schools.
Adkins added that Ambient Insight is predicting continued strength and support for online preK-12 education, despite some fears by suppliers that growth in e-learning will be impacted heavily once ARRA funds were exhausted.
The complete report, "The Worldwide Market for Self-paced eLearning Products and Services: 2009-2014 Forecast and Analysis," can be purchased for $4,825. An executive summary of the report, which includes further details and information about methodology, can by found here.