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The global higher education market size was USD 1,090.87 billion in 2019 and is projected to reach USD 2,367.51 billion by 2027, exhibiting a CAGR of 10.2% during the forecast period.
This market is experiencing unprecedented growth as the education sector is seen as a significant contributor to economic development and national wealth. The increasing popularity of electronic learning and mobile learning is validating the development of this market. Also, the increasing number of student enrollments in educational institutions is a key driver for market growth. For example, according to the ‘All India Survey on Higher Education – 2018-19’, the total number of enrolments was estimated to be 37.4 million. Thus, the growing number of enrolments in higher education public institutions is a significant driver for market growth.
The popularity of online learning platforms has significantly risen over the past few years. This popularity is attributed to the extensive student engagement ability of these platforms. Improved connectivity, preference for device-based computing, availability of cloud-based resources, and the emergence of collaborative learning are some of the major factors positively impacting the higher education market growth. Increasing government initiatives, funding, and growing international student mobility are the other key factors creating opportunities for players in this market.
COVID-19 Pandemic to Dramatically Disrupt the Higher Education Ecosystem
The Covid-19 pandemic has shut down most schools and colleges across the world. As per a report published by the Boston College Center for International Higher Education, as of April 6, 2020, globally, 220 million post-secondary students have been affected as universities and tertiary education institutes closed down in 170 countries and communities. Broadly, global higher education is fundamentally likely to remain stable. However, major short-term and perhaps long-term disruptions and consequences are inevitable and are becoming severe as the pandemic continues.
Institutions are struggling with severe financial challenges as the global and domestic economies are expected to face an unprecedented recession. The immediate challenge that most of the institutions face today involves unexpected cash flow disturbances. Institutions lose auxiliary revenues such as parking fees, dining outlet sales, and lab maintenance fees, among others, as students are unable to study on campus. They also face unforeseen expenses, including partial refunds on educational fees, accommodation rooms, and the requirement to deploy virtual education platforms. Thus, the market is experiencing an unexpected downturn during the COVID-19 crisis.
The pandemic has also significantly affected the number of enrollments that has decreased severely during the crisis. For instance, as per the National Student Clearinghouse Research Center Report - 2019, the number of college student enrollments has fallen to 1.3%, with the loss of about 231,000 students compared to the year earlier. The crisis is anticipated to have a long-term impact on this market, as institutes cannot predict the upcoming enrollments. Apart from this, a substantial decrease in international students is another key challenge that the higher education industry is expected to face in the upcoming period.
Traditional face-to-face learning approaches have suddenly shifted to virtual, blended learning systems through online learning platforms. For instance, in March 2020, the World University of Design (WUD) – India shifted to online teaching to ensure educational continuity during the pandemic time. Thus, the crisis has changed the learning ecosystem dramatically by imposing online smart education approaches. For instance, as per a publication by the Smart Learning Institute of Beijing Normal University (SLIBNU) and the UNESCO International Research and Training Centre for Rural Education (UNESCO INRULED), in March 2020, the Chinese Ministry of Education started providing flexible online learning to over 270 million students through the “Disrupted Classes, Undisrupted Learning” program. Institutes have also shifted increasingly towards modern educational culture and technologies. Institutes are adopting advanced solutions to make infrastructures more responsive, engaging, and insightful than ever before. Thus, this unprecedented growth in the demand for education technologies during the present crisis is fueling market growth.
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Developing IT Infrastructures to Enhance Adoption of E-Learning Approaches in Higher Education
The arrival of electronic learning (E-learning) has transformed the whole educational landscape, thereby helping students and teachers to overcome geographical barriers. E-learning methodologies use information technologies for supporting teaching and learning through online platforms. These technologies have allowed access to teaching materials anywhere so that students can learn from their own homes and at their own pace.
One crucial factor that supports e-learning adoption is the availability of developed IT infrastructures. Uninterrupted supply of electricity and stable internet connectivity are the key components of IT infrastructure. As per World Bank data, in 2018, 84% of citizens in the European Union, 66% in Latin America, and 18% in the least developed countries had Internet access. Thus, the rapid developments in IT infrastructure across the globe are accelerating e-learning adoption in institutions.
Besides, the perceived ease of use (EOU) of these systems is another technological factor influencing the adoption of e-learning technologies. It highlights the increasing utilization of blended learning (BL) platforms to offer the advantages of both traditional and online learning approaches. Reduced infrastructure and low cost are the other advantageous factors that are driving the growth of this market.
Increasing Proliferation of Online Teaching-Learning Systems to Aid Market Growth
Online learning has started to gain much pace in the higher education sector. The availability of high-speed internet, increasing usage of personal computing devices, low-cost data revolution, and governments’ digital push are the key factors responsible for driving the popularity of online learning platforms. The trend of distance learning across North American countries has significantly accelerated online teaching-learning approaches. Several institutes have started enrolling students for partial or fully online educational programs at the institutional level. As per the ‘Online Education in 2019’ report published in September 2019 by Northeastern University, 1.46 million students were enrolled in online four-year undergraduate programs, 774,000 in two-year programs, and 869,000 for graduate-level courses. Apart from this, the COVID-19 pandemic has strengthened the support for online coaching. Thus, the crisis is also expected to considerably expand the usage of distance education platforms.
Institutions’ Efforts for Upgrading Existing Educational Ecosystem to Reshape Market Landscape
The highly competitive landscape of this industry is enticing institutes to upgrade their pedagogy and campus environments. Organizations are increasingly spending money to deploy advanced Ed-tech solutions to enhance educational quality. The trend of modernization is leading to reforms by reorganizing institutions to enable students and faculties to be more active participants. In February 2020, for instance, the Ireland-based Royal College of Surgeons announced the launch of CampusNexus Engage, a system of intelligence to augment lifecycle communications with students and prospects.
The proliferation of open learning resources is further accelerating the adoption of smart technologies. The emergence of the ‘personalized learning experience’ concept is also driving the need for institutional systems to upgrade. The growing acceptance of online learning, e-learning, and blended learning approaches supports technological proliferation in education.
Insufficient State Funding and Higher Tuition Fees to Limit Enrollments
Insufficient government funding enforces institutes to obtain revenues and make expenditures through the fees collected from students. Several universities, colleges, and institutes have started generating revenues from students' tuition fees rather than government funding. Besides, the rapidly transforming educational culture is forcing organizations to increase their expenses for the modernization of their services and infrastructures. However, the rising need for increasing tuition charges puts tremendous strain on students. This factor is likely to affect the number of enrollments and thus the overall market growth. Thus, the increasing amount of tuition fees is affecting the number of student enrollments in institutes.
Substantial Spending on Learning Hardware and Software to Drive Market Growth
Based on components, the market has been classified into hardware, solutions, and services. Among these, the hardware segment is presently holding a major market share, while the solutions segment is likely to exhibit substantial growth during the forecast period. Projectors, interactive whiteboards, printers, PCs, laptops, tablets, smartphones, and other personal computing devices have become essential components of modern educational systems. As per the report published in April 2019 by the Government of the UK, each year, schools in England spend about USD 13 billion on non-staff expenses, and of these, USD 608 million is spent on learning hardware and software. Apart from this, the acceptance of modern learning approaches such as E-learning, virtual classrooms, mobile learning, distance learning, and others are escalating the demand for educational hardware and software.
The solutions segment is further classified into student information systems, learning management systems, student response systems, campus management, performance management, and others. Among these, the learning management systems and campus management systems sub-segments are holding a commanding market share and are likely to grow at a fast pace. The increasing need for centralized operational management and dynamic response systems at campuses accelerates the demand for campus management systems. Progressive approaches towards online training and learning are also supporting the demand for learning management systems. For instance, in April 2020, Cornerstone OnDemand announced that its LMS platform utilized almost 27.5 billion user hours during March 2020. Training and consulting services are also likely to boost market growth during the forecast period.
Robust Flexibility and Scalability Features of Online Learning to Increase Its Popularity
Based on the type of learning mode, the market has been segmented into offline learning and online learning. Offline learning in the market would capture maximum share due to the high preference for traditional teaching-learning methods. The digital transformation of educational ecosystems allows the incorporation of new teaching-learning approaches such as e-learning or m-learning. This technology-facilitated learning approach displays excellent potential from an educational perspective. The emergence of blended learning has eased the transition from offline to online learning. Funding for online education programs is expected to rise considerably during the forecast period. For example, as per a national survey conducted by Higher Ed and Gallup in 2019, 56% of college and university chief academic officers (CAOs) agreed that they have planned to allot significant funds to online programs in 2019.
The use of online learning has enormously increased over the past few years. This progress is evidenced by the thriving of e-learning, cognitive classes, and massive open online courses (MOOCs). Thus, the online learning segment in the market is likely to exhibit a high CAGR during the forecast period. The ability of advanced learning methods to reduce the faculty’s workload by automating various educational processes is encouraging organizations to adopt these technologies. Besides, the scalability and flexibility offered by online learning platforms are likely to aid this segment’s growth in the coming years. In January 2020, for instance, the United Arab Emirates-based Khawarizmi International College deployed an open-source LMS system to enhance its educational landscape.
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State Universities to Hold Significant Market Share Backed by Increasing Number of Universities
By end-user, the market has been classified into private colleges, community colleges, and state universities. The state universities segment has captured the maximum market share, while the private colleges segment is likely to exhibit significant growth. This growth can be attributed to the increasing numbers of institutions and universities. According to the ‘All-India Survey on Higher Education (AISHE)’ conducted by the HRD Ministry, in September 2019, the number of total higher educational institutions in India has grown from 49,964 to 51,649 and universities from 903 to 993 during 2017-2019.
The community colleges segment is likely to exhibit slow growth as the enrollments in community colleges have slumped in the past decade.
North America Higher Education Market Size, 2019 (USD Billion)
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Geographically, the market is studied across five major regions, namely North America, South America, Europe, the Middle East & Africa, and Asia Pacific.
Presently, North America dominates the higher education market share, generating 368.21 billion in revenues in 2019. This dominance has been attributed to the significant spending on the education sector in the region. The United States is considered as an education hub with the highest number of institutions and universities in the world. Significant investments in educational technologies are fueling market growth across the United States. In addition, governmental efforts to broaden the education landscape at the international level are also propelling the regional market. Technological developments in the education sector are expected to ensure promising growth in the North America market.
Europe is expected to capture a substantial share in the global market as the region is showcasing a notable rise in the number of institutions. European institutions have adapted their teaching and learning approaches in response to the changing demand and societal and technological developments. Progressive prospects towards advanced learning approaches are expected to drive market growth across Europe. The regional organizations are focused on increasing mobility, collaborations, structural reforms, and improving international visibility. This factor will also contribute to regional market growth.
Asia Pacific is witnessing tremendous growth due to the increasing importance of higher education in the region. Education has become a vital element for Asian countries to support economic and sociological development. Ongoing digitization across various countries is stimulating the demand for advanced teaching-learning approaches in Asia Pacific. Governments in several Asia-Pacific countries, including Japan, India, Australia, and Malaysia, are supporting online learning methods, which is further augmenting market value across the region. Developing IT infrastructure, acceptance of modern educational culture, and governmental support are the key factors that are propelling this market across Asia Pacific.
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The Middle East & Africa region is creating excellent opportunities for education providers and rising investments have stimulated a favorable environment in the region’s education industry. The region is showcasing supportive demand conditions for education due to steady population growth. As per the ‘Understanding Middle East Education’ report published in the year 2018 by PWC, in Egypt, 2.4 million students' enrollments were recorded in 2016. Thus, the Middle East and Africa region would showcase healthy growth owing to rising enrollments.
Strategic Partnerships, Collaborations, and New Product Launches are the Key Strategies Adopted by Vendors
Key companies in the higher education market are continuously focusing on the evolution of their existing product and service portfolios. Vendors are launching customized solutions by keeping institutes’ and students’ needs in mind. In July 2020, for instance, Blackboard, Inc. launched a data-driven, scalable, and proactive student retention solution that enables institutes to facilitate personalized coaching and early student intervention.
Advanced technologies such as artificial intelligence, machine learning, and deep learning help key players to develop innovative solutions. Strategic partnerships between key players enable them to strengthen and expand their product and service offerings mutually. Besides, partnerships and collaborations with educational institutes help vendors to expand their business portfolio.
Apart from this, several key players are adopting business strategies such as mergers and acquisitions to boost their market position. For example, in February 2020, Veritas Capital Fund Management, LLC acquired two companies named Edcentric Holdings LLC and Campus Management Acquisition Corp for accelerating the technology business.
An Infographic Representation of Higher Education Market
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The higher education market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.
Value (USD billion)
Component; Learning Mode; End User and Region
By Learning Mode
Fortune Business Insights says that the global market size was USD 1,090.87 billion in 2019 and is projected to reach USD 2,367.51 billion by 2027.
In 2019, the North America market value stood at USD 368.21 billion.
Growing at a CAGR of 10.2%, the market will exhibit steady growth in the forecast period (2020-2027).
The offline learning segment is the leading segment in this market during the forecast period.
The increasing proliferation of online teaching-learning systems is driving market growth.
Astera Software., CollegeDegrees.com, LLC, Bain & Company, Inc., Dell Inc., and VMware, Inc. are the major players in the global market.
North America dominated the market share in 2019.
The increasing proliferation of online teaching-learning approaches is expected to drive market growth. Additionally, institutions efforts towards upgrading existing educational ecosystems are also reshaping the higher education landscape.
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