Venture Capital for Higher Education?

What’s next? What are the possibilities opened up by innovation and technology trends for the immediate future?

An audience of more than 100 gathered on Friday 20th of Feb at the London Technology Summit 2009 to hear what CEOs from businesses like Amazon, Vodafone, Cisco, Google and McKinsey think about the future.

I went, curious to see whether education would be mentioned at any time during the debates. My hopes were high, since the audience consisted overwhelmingly of students and the event was organised by the Tech Club of the London Business School – surely someone would discuss the future of education I thought. The students, because of the importance of education for their future job prospects and the Big Guns CEOs because education determines what the workforce and customers that generate their profits will be like.

Well, whatever the hundred plus audience thought mattered, it was not education. Perhaps because they, as students of mostly elite universities, took it for granted; or thought they would be out of university by the time change happened; or maybe because they believed that change in education was something beyond their control that would happen anyway. The few times education came into the discussions were in relation to the ways in which technology opened up opportunity for delivering education in developing countries and emerging markets. While everyone was enthusiastic about the idea of children in Africa learning through their mobile phones, no one seemed to consider the possibility of the same learning innovation happening at the Said Business School in Oxford.

I managed to elbow my way to several of the speakers, surrounded by young people eager to get their hands on some VIP business cards. I asked what changes they anticipated technology to bring to education. They startled, paused and gave me a safely vague response.

Puzzled, I cornered a young venture capitalist from a leading firm (a very leading firm it is indeed) dealing with web innovations, and asked him if there were any interesting start-ups bringing new technologies to education. He wiggled a bit and then said “Not really, but then, there are no money to be made in education really, so why would anyone invest efforts to do things differently there?” I wanted to say “Ha, matey, how wrong you are!” but then I thought “Do I have evidence to the contrary?”

At a forum populated by people, whose decision-making is all about questions like “What are the costs?”, “How big is the market?”, “How to monetize this?”, does higher education have the answers? If someone wants to invest in an innovation for mobile phones, they can easily find information about what the market in mobile phones is like, was like in the past and perhaps (but very cautiously these days) what it will be like in the future. The boom in innovation in technology is enabled by the emergence and flourishing of a market for technological innovations. Markets however exist and perform their magic for spiriting in innovations only if they have information. What is necessary to enable people external to higher education to invest into innovations in higher education? Perhaps digging up and feeding into the innovation markets information about the possibilities to make money while helping education grow. Or, oops, was that an inappropriate thing to say? Venture capitalism in higher education? Still, the food offered at the summit consisted mainly of digestive biscuits, so instead I returned with some food for thought:
•    Is making money out of investment in higher education technology and start ups a bad thing?
•    What will encourage people to invest and universities to accept their investment?
•    What information is necessary and how to make it available?
•    Are there regular sources of information about the annual spending on technology and web services by universities in the UK? Compared to the US for example? By segments and trends?
•    Do we know how much do students today spend on personal technology? How much are their prepared to spend for technology and web services enabling their studies at university? Do institutions underestimate students willingness to buy their own learning gadgets?

And what about the questions with which the Technology Summit started – what’s next? What will the future for technology be like? Well – whatever we make it.

Sandra Romenska

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1 Comment

  1. bdra

     /  February 23, 2009

    Sandra, you have my sympathy! Venture capital won’t come our way in education, it seems, because there are no big financial profits in education. In 1967 I was paid from funds provided to the American Institutes for Research in the Behavioral Sciences (Palo Alto, California) by Westinghouse Education, a new branch of Westinghouse, a giant of US industry. I directed part of a $2 million project to develop the first computer managed education system for children in grades K-12. The project was a flop. General Motors had an education arm then too. They and a few other very big companies thought there were profits to be made in education. They all lost money.

    The current picture is not as bleak as you found it, however. Private, commercially-oriented distance education enterprises are now the Open University’s chief competitors worldwide. Publishers think they can make big money in education by controlling and distributing intellectual property, despite the open source movement.

    If governments are prepared to put money into public-private partnerships there may even be profits to be made out of universities, most of which run at a loss and depend on subsidies. What if UoL were sold to, say, Mitsubishi with a government guarantee of 50% of the annual expenditure? It’s happening already in the NHS, I’m told…

    And where and how will e-learning develop if the buyer of educational institutions is Nokia or Sony or Siemens?


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