With Brexit Looming, Is There a Place for the UK in Global Edtech?

With the Brexit limbo set to linger for a few months yet, uncertainty looks likely to continue affecting the U.K.’s commercial relationships. Foreign direct investment in the country has fallen by nearly 20% in the last three years, and the same period has seen British companies less likely to enter into foreign trade than before.

Despite a difficult short-term picture, though, there is some hope that the U.K. can continue to thrive in areas such as education—a sector that can tap into the country’s strong heritage and international reputation. To be one of the leading players in a $250 billion global industry would be a huge win. But can the country make the necessary step up?

The edtech sector certainly shows promise. It is one of the U.K.’s fastest-growing industries, with a 22% revenue growth year-over-year. It accounts for 4% of all U.K. technology companies, and is projected to be worth £3.4 billion by 2021. Roughly a quarter of Europe’s edtech companies are based in the U.K., attracting 35% of European edtech startup investment. London is a launch pad for edtech startups and has a growing reputation as a leading hub where many foreign nationals choose to establish their edtech companies.

Nonetheless, from a global perspective, the U.K. and Europe as a whole are presently dwarfed by bigger players. More than 3,000 edtech companies are currently active across Europe, but they receive just 6% of global edtech venture capital. On the other hand, just China and India together represent more than 70%. Moreover, UK edtech is currently only generating around £170 million in exports—much smaller than one would expect for a service-centric economy that ranks as the world’s fifth-largest.

However, changes are underway – both from government and within the sector itself – that aim to secure London’s future as a global edtech powerhouse. While the UK is abundant in the technical and creative skills required to create world-class edtech products, it has until recently lacked the ecosystem necessary for products to achieve exposure and make the transition to global markets. But this is beginning to change.

One of the most difficult issues in marketing—and buying—edtech is demonstrating that a product will bring tangible, measurable benefits. Creating such evidence requires both skill in empirical research techniques and, crucially, access to pupils in order to measure impact. To solve this problem, the government has recently announced the creation of a series of school “testbeds” that will work with startups to develop an evidence base for the best innovations.

Alongside this, other institutions are beginning to work with edtech businesses to help them understand how to use research to create solid evidence for the suitability of their product. A prime example is University College London’s EDUCATE initiative, which brings together edtech entrepreneurs, academics and educators in a structured research mentoring program.

The second critical element in supporting this industry is an ecosystem that connects new companies with funders, potential customers, experts—and each other. An increasing number of organizations are aiming to nurture London’s many fledgling startups and create these links. Established events such as the BESA’s Bett show are now working in tandem with new, innovative conferences such as Learnit and peer networks such as the Edtech Exchange. Investment groups like the Nasdaq-listed EdTechX has launched the EdtechX Europe conference and Edtech Week (a series of 40-plus events) in London, as well as hosting other events across Europe, Asia and Africa.

At the government level, the U.K.’s Department for International Development is looking at targeting learning outcomes, supported by edtech, through the development of an EdTech Research and Innovation Hub that focuses on the developing world. And at the same time, Nesta supports edtech impact investment and Emerge Education is building a funding network to accelerate promising edtech projects.

These emerging networks will be hugely important in creating opportunities for U.K. edtech in the coming years. Although Chinese and US startups attract more attention, the fact that they tend to focus on their own large domestic markets means there is a huge opportunity for European and U.K. companies to step in and scale internationally at an earlier stage.

Nonetheless, despite these supports, U.K. education entrepreneurs must be conscious of the future risks to their place in the global tech ecosystem. Many London-registered startups rely heavily on development operations based in other European countries, as well as a good deal of funding from European businesses. There is strong competition from hubs in Berlin, Stockholm and Paris, so it will be important to continue nurturing the country’s overseas links, regardless of what version of Brexit the UK arrives at. However, if London can continue to strengthen its reputation as an international edtech hub, there’s no reason it can’t be a global leader in creating positive educational impact.

Vikas Pota is group chief executive of Tmrw Digital

This article appeared on EdSurge on 19th May 2019