PreK-12 Dominates Growth in E-Learning
Driven in part by rapid growth in online education, by 2015, preK-12 academic institutions in the United States will spend $4.9 billion on "self-paced" electronic learning products and services, according to a new report released this week by research firm Ambient Insight. That represents a compound annual growth rate of 16.8 percent from 2010 spending levels, outpacing every other segment, including higher education and healthcare.
The report, "The US Market for Self-paced eLearning Products and Services: 2010-2015 Forecast and Analysis," encompasses a category of electronic learning that Ambient Insight refers to as "self-paced," which includes learning management, classroom management, and learning content management systems, along with student information systems and hosted learning platforms, among others. This category does not include mobile learning, gaming, or several other major e-learning categories. (Ambient Insight's detailed methodology and category definitions can be found here.)
Worldwide Growth
Across all segments, the market for these electronic learning products and services grew to $18.2 billion in the United States in 2010. That overall figure will climb to $24.2 billion in 2015, according to Ambient Insight's latest forecast--a relatively modest 5.9 percent compound annual growth comparable to that of Western Europe but lagging far behind Asia (at nearly a 30 percent five-year CAGR from 2010 to 2015), Eastern Europe (nearly 25 percent CAGR), Latin America (about 18 percent CAGR), and Africa (roughly 17 percent CAGR).
Ambient said Asia's growth rate will propel it to become the second-largest consumer of these types of electronic learning products by 2015, just ahead of Western Europe and just behind North America.
PreK-12 Growth Driven by Online Schooling, Recession
The disproportionately high growth of self-paced e-learning in preK-12 is being driven in large part by four factors: the "rapid growth of virtual schools, the dramatic increase in online students, the recession, and state budget cuts," the last of which is causing schools to shift budgets from programs like classroom-based summer credit recovery courses to self-paced courses, according to the report.
In fact, researchers noted that overall numbers of preK-12 students attending physical classrooms only will decline (by 4.2 percent) by 2015, while the population begins to migrate to virtual schools, online charter schools, and online supplemental instruction. More than 10 million students will participate in some amount of online supplemental instruction by 2015, up from 2010 levels of 2.9 million, for a compound annual growth rate of 28 percent. More dramatic growth will be seen in online charter schools and virtual schools.
"State-run virtual schools used to target courses that were not available to rural students," Ambient Insight Chief Research Officer Sam S. Adkins told THE Journal. "Now they are targeting core curricula and credit recovery as well. As a way to cut costs. States are passing legislation to open virtual schools to the entire state population as well. (Florida, Arizona, and North Carolina are good examples.) The school district becomes state wide."
The report also forecast dramatic growth in homeschooling, with a commensurate rise in the volume of students participating in self-paced e-learning courses. The number of students participating in homeschooling, according to the report, will grow 9.5 percent annually for the next five years, reaching 4.6 million in 2015. And three-quarters of those homeschooled students will be online. All told, more than 17 million preK-12 students in the United States will be engaged in online learning to some degree by 2015.
"The increase in homeschooling is a complex social phenomenon," Adkins told us. "As the commercial suppliers increasingly target the home school market (K12 Inc. for example), this will almost certainly cause a spike in home schooling as students/parents now have access to certified online teachers and standard courses."
Ambient Insight's latest report, "The US Market for Self-paced eLearning Products and Services: 2010-2015 Forecast and Analysis," is available now from Ambient Insight for $4,825 for an organizational site license. Further information, including a free executive summary with additional details, can be found here.