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About e-Learning
Introduction
e-Learning is the convergence of the
web and learning on all levels,
whether it be elementary school, college, or business. Knowledge is
now considered a competitive advantage and a company’s most
important asset. Many facts, figures, and forces behind e-Learning
are not only causing excitement in boardrooms across the world but
are also making Wall Street and the investment community take a
closer look.
e-Learning is made up of several
methods of learning, which are enhanced or facilitated by
technology. As a component of e-Learning, web-based or online
learning is likely to be the fastest-growing method for delivering
education and training.
Megatrends in areas such as
demographics, technology, globalization, branding,
consolidation/privatization, and outsourcing will greatly affect the
way we learn. These
megatrends will affect all learning markets including early
education, K-12 education, post-secondary education, corporate
training, and consumer products and services. The dearth of skilled
labor in the corporate world will only increase the need for
e-Learning.
One of the biggest trends affecting
the size of the e-Learning market is the astounding growth on the
Internet. In the next three years, devices on the Internet are
expected to grow from 147.4 million to 345.6 million. In the
four-year period between 1998 and 2002, 223 million new users will
be online worldwide. By 2002, 21.9 million more kids and 16.6
million more teens will be on the Web. Global online ad spending
will reach $33 billion by 2004 and e-Commerce is expected to top the
$1 trillion mark by 2003.
Many giants in the technology world
are investing in and providing advanced products for and services
tailored to the learning market. These companies, which are expected to make great inroads
into e-Learning, include AOL, Yahoo, Microsoft, IBM, AT&T, Sun
Microsystems, Oracle, and Harcourt.
The global education and training
market is a $2 trillion industry, with $740 billion in the U.S.
Approximately 10% of the $740 billion is "for-profit"
business. The growth rate for the different education and training
markets is projected at 10-15% but, at least in the corporate
sector, e-Learning will far outstrip classroom training over the
next few years, claiming almost half of the overall corporate
training market.
Educational trends include home
schooling, which is growing at 15% ($1.3 billion market). Ten
percent of students are attending private schools ($2.6 billion
market). The number of high school graduates is expected to increase
20% by 2008, while working adults represent nearly half of all
post-secondary students.
Educational software was a $7 billion
market in 1997 and is expected to grow by 14% over the next few
years; $2.5 billion of the $6.1 billion supplemental educational
materials market is sold to consumers, and educational toys are the
fastest growing segment of the toy market. All these trends seem to
reflect both demographic and societal movements toward providing a
better education for anyone who wants to learn.
In the lifelong learner market,
self-help books grew at a 21% rate from 1993-1997, and 87% of people
that go online do so to pursue information about a hobby or lifelong
interest.
By 2003, corporate training will
expand to $62.5 billion with $15 billion in outsourced training. Currently, small- to medium-sized businesses
are being overlooked in the emerging e-Learning space but probably
not for long. Nearly 60% of the workforce is employed by small- to
medium-sized businesses and employees of these smaller businesses
are more likely to turn to the web for training resources.
About This Document
This document is an abridgement of several documents from various
investment groups that are investigating e-Learning and expecting it
to be one of the next big things to be revolutionized by the
Internet. The investment groups represented in this document include
Merrill Lynch, Banc of America Securities, USbancorp – Piper
Jaffray, SunTrust Equitable, WR Hambrecht + Co, Thomas Weisel
Partners, and Dain Rauscher Inc.
This document is broken into two
parts. The first part answers the question, "What is
e-Learning?" and focuses on the trends and forces behind
e-Learning. The second part of the document addresses the numbers
and the size of the learning market. Although the numbers mentioned
in the various e-Learning reports differ, the opportunities remain
extensive.
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