Where Are All Those Ed Tech Dollars Going?

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The largest segment of the $7.76 billion ed-tech market, according to the industry group SIIA is "instructional support," which accounts for up to 38 percent of the market -- and that's increased by 12 percent over the previous year.

Companies within the "instructional support" space earned $892 million, with assessment and testing products registering as the most profitable sector under that category. Some factors that might have influenced the rise in spending on assessment, according to SIIA officials, are the increased use of data and data analysis as well as online assessments, as schools move from print to digital in the move to meeting the Common Core State Standards.

These are numbers reported by the Software and Information Industry Association for the 2010-2011 year for the Pre-K-12 ed-tech market. Overall, the entire industry's value increased by 3.5 percent from the previous year.

This is the SIIA's second survey of companies selling non-hardware educational products and services. Of the 581 companies in the ed-tech space, 105 responded to the survey. SIIA and their research partner, Consulting Services for Education, extrapolated the results of the overall findings based on the direct responses they received.

It's also worth noting that companies that create content services have almost as large a market share -- 36 percent -- as those working in instructional support. Within that category, English Language Arts and reading programs take up the most space and revenue, earning $400 million. The next largest group, math software, reported $160 million in profits. Science content revenue has gone up 10 percent.

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Other noteworthy information:

  • Bring Your Own Device, or BYOD programs are taking off, opening up opportunities for mobile learning programs.
  • Open education resources are disrupting markets in ways that will clearly have a big impact, although it’s not clear yet how.
  • According to the survey, public schools tend to move much more slowly at adapting technology than private schools.Data from digital services is going to become ever more important, especially as schools move toward adopting Common Core State Standards.

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[NOTE: The current version of the article reflects the fact that the largest segment of the ed-tech market is instructional support, which accounts for up to 38 percent of the market -- and that's increased by 12 percent over the previous year.]

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