The term ‘new normal’ is increasingly used in discussions and publications about the economy, technology, and business. But what exactly does it mean, especially for education technology providers? Leading up to the Ed Tech Business Forum, we’ll be looking at the drivers of the ‘new normal’ in this blog. Here’s the first post in our new series, “The New Normal”:
Education Economic Climate
It’s not going to get better. The budgets at education institutions have been slashed over the past few years and they’re preparing for even more dramatic cuts in 2012. NEA chief economist, Dr. Richard Sims, gave a very sobering presentation at the SIIA Ed Tech Business Forum in 2009: What Does a Post-Stimulus World Look Like? His presentation was the most requested in the history of this conference.
Dr. Sims predicted there would be bleak years ahead even with Stimulus funds that were going into education institutions at the time. And he was right. Now in 2011, with the ongoing economic uncertainty, we don’t know how long it will take for the education market to recover. And when it does, what will normal look like?
We know it won’t be like the years of growth we saw in the 90s. In fact, education funding will really never return to its long-term growth trend. And, even more sobering, this lower investment in human capital will lower future earnings, productivity, and competitiveness in the US – all forcing more permanent effects on the economy.
Technology Solutions
Even though education institution budgets have been dramatically cut, technology companies continue building smaller, faster, less expensive devices for the consumer, business, and education markets. So, the new normal in technology solutions will be personal, digital, Internet-connected, and wireless. These solutions will require faster and faster bandwidth, support more social media use – and will probably grow our concerns about personal privacy.
In the new normal, technology providers will continue to build innovative products and services for education institutions – but will increasingly incorporate cloud services, utilize more power mobile devices, and integrate open education resources. Given the decreased size of education budgets, the technology solutions will have to prove they lower the cost of instructional and administrative services within institutions.
Business Practices
The new normal for education technology businesses will be lowering their costs, both in the building of and supporting of products and services. Businesses will need to better understand why K-20 decision makers buy their products and how they are used – or not. They will be getting even closer to their customers. The new normal in business practices will likely include developing new licensing models for Cloud-based products and services, increasing their sales channels for mobile products and services, and adjusting their business models to compete with free education resources.
K-20 institutions are not the only customers being asked to ‘do more with less’ but due to resource-constrained state and local governments, they may be in that position longer than other customers. Ed Tech companies will need to show decision-makers the value on their investments made in their products and services for some time to come.