Online Education Market to Grow at 9.37% CAGR, Rising Demand for Higher Education to Drive Growth

Online Education Market to Grow at 9.37% CAGR, Rising Demand for Higher Education to Drive Growth

19 February 2021, New York, USA – The global online education market is expected to reach $337.83 billion in 2025, rising at 9.37% CAGR during the 2021-2025 period. The increased penetration of mobile devices around the world, the growing demand for higher education, and quality certification programs for working professionals and convenience offered by online learning remain key drivers of growth. The online education market continues to make tremendous progress thanks to technological advancements like lowering costs of cloud adoption, growing penetration of smartphones, and rising supply of training institutes for teachers remain major drivers of growth for players in the distance education market.

Demand for Higher Education Remains a Key Driver of Growth for Distance Education

According to National Centre for Education Statistics (NCES) in the US, distance education remains a core demand among post-baccalaureate students in the US. These students seeking post-graduate courses like masters and PhDs seek distance education due to the rising demand for higher education in the professional world. In 2018, 1.2 million postbaccalaureate students engaged in distance learning. This population amounted to over a third of all students enrolled in postbaccalaureate education in the same year. Furthermore, among students enrolled in distance education, 406,000 enrolled in institutions from the same state, making a case for quality, and flexibility offered by distance education. 495,000 students enrolled in distance education from institutes located in different states.

Furthermore, the distance education market remains vast for private players. In 2018, over 87% enrolled in distance education were enrolled through for-profit private institutions, while 27% went through non-profit private institutions. Public institutions only witnessed 25% of the total enrolment. In 2018, the top distance education or online learning institution in the United States remained the Western Governors University with over 120,000 students. Furthermore, according to NCES data, most colleges in the United States (79%) offered either partial distance education or complete distance education programs. These included 4-year, and 2-year undergraduate programs. Furthermore, nearly all public universities engaged in distance education, making it a preferred choice for mass, cost-effective education which remains the key demand from the global student population. Distance education also promises more opportunities in the near future for new players, as in 2018, only 59% of private colleges offered distance programs. The trend is visible in higher education with institutions like Harvard, MIT jumping into the race to offer online learning courses. However, colleges around the country still lag behind in the race to develop infrastructure to cater to the global demand for increased quality in affordable higher education.

MOOC to Create New Avenues for Growth in the Online Education Market

The MOOC or the mass open online courses remain a major avenue for growth in the online education market. The demand for online education remains high among various key social demographics in regions like the United States. For example, according to NCES, the demand for online education or distance education has risen significantly over the last few decades among African Americans, Hispanics, Asians, among others. Furthermore, according to recent studies, 73% of learners are still unaware of the opportunities offered by MOOCs, due to the high-concentration of MOOC programs among people requiring higher education. Furthermore, according to the UK Department of Education, in 2018, over half of MOOC learners at least had college degrees, with 79% with a bachelor’s degree, and 44% holding a post-graduate degree.

According to the UNESCO Institute for Lifelong Learning’s online survey, the demand for higher education from Europe remains high among applicants from developing countries. The survey received the majority of its response (over 50%) from individuals outside of Europe. Furthermore, the response percentage was in line with enrolment for its academic programs online, with most registrations coming from outside of Europe. Furthermore, the study revealed that over 50% of applicants are currently in employment, while 30.05% are students. Moreover, self-employed individuals made-up 9.62% of distance education student make-up, while unemployed individuals made up for 6.34% of the total population. Men and women on parental leave also accounted for 1.41%, with rising demand for productivity from corporations around the world.

Covid-19 Pandemic Remains a Major Driver as well as Restraint for Growth

The covid-19 has disrupted conventional classroom-based learning across the world. This remained a major driver of growth for the online education market, as a large population has devoted itself to learning online with simple, and basic digital tools to guide their path. The growing influx of technological advancements to cater to this population including academies like Udemy, data storage portals for educational lessons, and assignments, and the growing influx of advanced learning courses available online remains a promising development in the online education market. The Covid-19 pandemic also forced global investors to take notice of the online education market with companies like Byju’s reaching a top worldwide valuation in the Edtech space during the pandemic. Moreover, the growing expansion of online courses in new languages, and growing support from tech giants like Google for translation services, along with advancements in transcriptions remains a major driver of growth in the online education market.

The pandemic has raised doubts about the long-term viability, and sustainability of the future of the distance education market. The questions about the efficacy of online education as compared to classroom-based models can emerge as a restraint to growth once the pandemic subsides for players in the online education market.

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