What were the top stories in the education marketplace in 2014? Think big.
Big political and economic forces, from the planning and implementation of common-core standards and tests to the continued surge of private investment into the school market, shaped the development of ed-tech products and services, as well as district demands. Key decisions in state and district policy and purchasing, meanwhile, helped define which companies are poised to control the market in the near term, and perhaps for years to come.
I combed through some of the most widely read stories and blog items about the marketplace over the past year in Education Week, and looked through all our coverage for overall trends. I’ve also laid out some of the stories to keep an eye on for in the new year.
But first let’s take a look back.
Biggest Stories from 2014
Wheeling and dealing. Venture capitalists and other investors have been keenly interested in the education market for years now, and their fixation on opportunities in schools remained strong in 2014, by most indications. While the total number of education deals dropped, the overall value of those deals jumped, to $8 billion in 2014, according to one report.
Testing, testing, testing. Over the past year, we’ve witnessed a massive flow of money to companies via the state and local testing markets. A big chunk of money was spent on designing the exams aligned to the common-core tests, work overseen by two main testing consortia. Roughly $360 million in federal funds flowed to testing companies to help craft and implement common-core tests, with much of that money landing in the hands of the nation’s biggest vendors, as we explained in a recent Education Week story. But the spending on assessment also played out in many other forms—from individual state’s hiring of vendors to local districts’ purchasing of interim and formative assessments.
Battles over contracts. With tens of millions of dollars, and in some cases hundreds of millions on the line, it’s not surprising that a number of protests and legal fights broke out over the awarding of state contracts for testing. The most high-profile squabble was the American Institute for Research’s challenge of a potentially enormous common-core testing contract to a rival, Pearson. That case is ongoing. (Also see my story examining the AIR’s ascent in the U.S. testing industry.)
Digital device choices for districts. In recent years, school districts were choosing digital tablets, particularly Apple’s iPad, as the devices for delivering educational content to students. But the market appears to be shifting. Recent industry data show that more districts are going with Chromebooks, drawn by a lower price, cloud-based storage, and a perceived ability to promote collaboration within schools and districts.
Data-privacy fears. Parents’ and advocates’ worries about data privacy morphed from a peripheral issue in the K-12 community to one that is affecting how companies of all sizes are creating products and marketing them to schools. As worries increased, a number of school and industry organization have responded by putting forward model policies to help school officials set privacy expectations for companies trying to do business in their districts. The stakes are high: Many of the products aimed at “personalizing” learning rely on the use of data, and companies that don’t develop policies to protect student information would seem to do so at their peril.
Huge ed-tech purchases (and buyer’s remorse). Districts around the country made ambitious, and often costly ed-tech purchases. The ones that worked well typically didn’t end up in the news cycle. The purchases that didn’t work well, such as the Los Angeles’ Unified School District’s troubled rollout of a 1-to-1 iPad program, have caused major blowback for district decisionmakers. It’s possible that L.A.’s rough experience could have an upside for other districts. It seems to have prompted some reflection among district officials, and researchers who’ve studied ed tech, about how districts can roll out ambitious digital plans in more thoughtful and strategic ways.
Things to Watch in 2015
K-12 budgets climbing upward. Notice that I did not say, “rocketing upward.” State spending on K-12 was held in check for years by the Great Recession and its long tail. Yet there are signs that things are improving. For the current fiscal budget year, 46 states raised spending on K-12 education, and the average increase was nearly 5 percent after adjusting for inflation, as my colleague Andrew Ujifusa recently reported. At the same time, some states still face difficult financial choices. And there are indications that a complete recovery is a long way off. Thirty states’ K-12 spending remains below fiscal 2008, pre-Recession levels, and 14 states have funding that is at least 10 percent lower than it was then, according to the Center on Budget and Policy Priorities.
Gamers coming to K-12?: Given the fickle nature of the school market, it’s possible we’ll see more companies trying to pull an end run, selling educational products directly to young audiences through other means—namely games. Watch to see if more education-related companies look to make a splash in the consumer market, with the goal of either growing there or expanding into K-12. Over the past year, two companies with big presences in K-12 have made shifts into gaming: Amplify, which is unveiling a line of educational games; and Microsoft, which announced plans to acquire Mojang, the Swedish company that created Minecraft, a wildly popular video game.
Districts becoming smarter, more demanding buyers. We’ve written over the past year about efforts by school leaders to become more sophisticated consumers of ed tech, and efforts by nonprofits to help K-12 officials make smart purchases. We’re also seeing more efforts by major school districts to use their leverage to pressure vendors to accept new standards for interoperability, or making sure their programs and technologies work together, with minimal hassles. If these early efforts take hold, look for other districts to consider following suit.
Schools craving high-quality common-core resources. It was clear in 2014 that school districts, and individual educators, are desperately searching for academic resources that will help students meet the demands of the common-core standards, and the online tests aligned to them. What also seems clear is that school districts and states are taking very different approaches to getting there. While there’s been some speculation and fear that the common core would lead states and districts toward a national curriculum, one recent study found that curriculum aligned to the standards is being crafted locally, with heavy involvement by individual teachers. At the same time, however, there are signs that teachers are dubious of the usefulness of many common-core focused materials. Some researchers who’ve evaluated materials branded as being aligned to the common core say teachers have good reason to be skeptical. That level of skepticism will likely continue.
Going global. We continue to see U.S.-based education companies making major moves into the international market, particularly in Latin America. That trend will likely continue. Recent examples of U.S.-based companies making a splash abroad include Schoology, a provider of learning management systems, which scored a big agreement to serve Uruguay’s schools; and Amazon, which reached a reported deal to provide device-based textbook materials to Brazil’s teaching population. Look for American companies to continue exploring opportunities outside the United States in the years to come.
That’s my list, looking back and looking ahead. What did I miss?