'When public policy ‘fails’ and venture capital ‘saves’ education: Edtech investors as economic and political actors' Janja Komljenovic, Ben Williams, Rebecca Eynon and Huw C Davies in (2023) Globalization, Societies and Education comments
Educational technology (Edtech) investors have become increasingly influential in education; however, they remain under-researched. We address this deficit and introduce the grammar and landscape of Edtech investment into education research. We empirically examine venture capital Edtech investors and argue that they are economic and political actors. Investors construct the Edtech industry through their investment and advancing particular imaginaries. They legitimate their authority in education through narratives of expertise and measures of social impact. They consolidate the Edtech industry by constructing social networks to perform the political work of futuring. The analysis provides original insights into the power of Edtech investors in education and proposes a research agenda examining new relations between the education, technology, and finance industries.
Educational technology (Edtech) increasingly structures teaching and learning processes, determines how education is governed, and reframes educational purposes and aims (Decuypere, Grimaldi, and Landri 2021). Since Edtech is so impactful for education, it matters what kind of Edtech is incubated, innovated, and rolled out into the sector. The nature of Edtech is determined by socio-techno-financial processes resulting from power struggles between various actors (Komljenovic 2021). We argue it is investors who increasingly influence the nature of Edtech. They can realise future visions by structuring the direction of entire industries through their funding priorities (Cooiman 2022). However, they do more than only invest financial resources; they conduct studies, issue reports, educate entrepreneurs and other actors, organise networking, work with policymakers, and more (Williamson and Komljenovic 2023). Hence, investment and consequent actions are as much political decisions about the future as they are financial decisions about funding startup companies. What can and cannot exist is determined by an investment decision (Feher 2018), and investors seek to materialise particular visions of futures through very laborious actions that accompany the investment itself (Muniesa et al. 2017).
Historically, investors were hesitant to invest in the education sector due to low returns, long investment cycles, fragmented markets, heavy regulation, and public hesitancy towards privatisation. This has changed with the emergence and growth of Edtech, akin to other sectors in the digital economy, accelerated by the pandemic (Teräs et al. 2020). Education via Edtech is seen to have an enormous opportunity for growth among investors as one of the last sectors that have not yet been digitalised. In other words, Edtech made education investable.
The Edtech industry is relatively young. While we can trace the use of the first computers for academic research back to the mid-1940s and their first use in university and school classrooms to the 1960s (Molnar 1997), the Edtech industry as we know it today developed in the early 2010s. Since 2010, the number of newly established Edtech companies has sharply increased (Komljenovic, Sellar, and Birch 2021). Venture capital (VC) investment in Edtech rose from $500 million in 2010 to more than $20 billion in 2021 (As of November 24, 2022, HolonIQ listed on its website https://www.holoniq.com/notes/global-Edtech-venture-capital-report-full-year-2021). And the COVID-19 pandemic accelerated investment in Edtech and its use in education (Williamson and Hogan 2020). The Edtech industry is now consolidating, as indicated by the rising value of individual investments into particular companies (Brighteye Ventures 2022) and an increasing number of acquisitions (Brighteye Ventures 2022), indicating the emergence of ‘Big Edtech’ (Williamson 2022). The number of Edtech ‘unicorns’, companies valued at more than $1 billion, increased from 0 in 2014 to 62 in 2021 (Brighteye Ventures 2022). An important reason that the Edtech industry has grown and consolidated is capital investment.
Surprisingly, Edtech investors, particularly VC investors, remain under-researched in education research. In this article, we ask who Edtech investors are, how they operate, and what are the consequences. We argue that Edtech investors became economic and political actors in the education ensemble of multisector influences on policy and practice (Robertson and Dale 2015) who need to be brought into research focus. We address the research gap by discussing Edtech investors’ operations, exploring the political and economic actions of two Edtech VC investors through an original empirical study, and proposing a research programme to investigate these key actors further.
We proceed as follows. First, we provide a brief overview of the practices of Edtech investors to illuminate the investment landscape and its grammar. We then explain our approach to the empirical study. We proceed by discussing three forms of VC investors’ economic and political labouring of making the Edtech industry, legitimating their role, and consolidating the industry. We conclude by reflecting on the implications for education.
