Education is at the heart of human survival as it facilitates progress and development of humanity. Education drives change, but ironically education itself has gone through limited change since the conventional classroom education was initiated. However, this is bound to change soon. With the mass adoption of internet and high speed broadband worldwide, concepts of E-learning could come to existence.
E-learning is comprised of Massive Online Open Courses (MOOC’s), Mobile Learning apps and Learning Management Systems (LMS). Together they allow wide access to education to anybody with an internet connection.
E-learning is an information good. Just like with other information goods such as CDs and books, initial fixed costs of creating the content are high but the costs of replication and distribution are low. Due to these attributes, E-learning can be easily be scaled to hundreds of thousands of students globally.
In comparison to traditional classroom education, the variety of courses is much larger online, leading to the long tail product variety effect. Next, flexibility in terms of course choice and time spent also rises as the students can choose to do the course of their choice at their pace. However, E-learning suffers from a low retention rate caused by a huge number of course drop-outs. And despite the fact that MOOC providers are trying to simulate the classroom environment online, E-learning courses still lack the face-to-face communication aspect of education that is vital for student-to-student knowledge sharing.
In terms of industry attractiveness, E-Learning is still a fairly new industry with few major players leading the market. Due to the difficulty of entering the market caused by the strong barriers of entry, the threat from new entrants is low. The barriers are the high initial investments for the content and credibility building. Yet, the threat of substitution is moderate as E-learning can only partially substitute traditional education. And although switching from one provider to another by consumers is easy, their independent nature causes the bargaining power of the consumer to be moderate.
Since the inception of E-learning, the industry has been going through rounds of evolution. Some major trends that in our opinion shall evolve in this industry are integration of E-learning in social media and gamification of the content. Given the fact that on average people spend over two hours on social media in an unproductive manner, E-learning could enter the field with short educational content videos that would be both useful and effortless to the viewer. We expect to see more micro-courses that shall appear on social media feeds in the form of short customized videos. Similarly, in the hope of making education more natural and effortless, gamification of studies shall be more common. Contrary to traditional education, gamification will always set the problems in context, making it easier for students to maintain their attention.
Overall, E-learning has the potential to create a global classroom that is free from inequality and prejudice allowing everybody to have access to the knowledge from top universities worldwide.
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