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Driving
Forces
With the megatrends in
mind, USbancorp – Piper Jaffray provides an overview of the
societal and technological changes. Among the foreseen changes are
those that will affect general education in the United States.
Already, various states have taken up initiatives to elevate
scholastic results.
e-Learning is an
outgrowth of a number of far-reaching societal and technological
changes that have been evolving over the last several years.
Knowledge is now the raw material that fuels our economy, as the
demand for skilled workers reaches all-time highs. Coupled with
the increasing demand for skilled workers is the well-documented
fact that prosperity is a close cousin of education--America pays
a premium to the well-educated. We are seeing a number of key
demographic trends come together to increase the demand for
education and training. The baby boom echo is spawning the next
generation of high school students. Working adults are going back
to school in record numbers. Many Americans have come to
realize that in order to continue to have something to offer the
workplace, learning must be a lifelong activity, not just
something we did back in school. Political winds are blowing, too,
raising education to the forefront as a national priority.
Emphasis on accountability in education has made assessment and
testing a hot button across the United States. Federal and
state programs seek to reduce the class size, solve the teacher
shortage crisis, attract and retain the best and brightest
teachers, and fund programs that enhance the overall educational
experience. The changes we are seeing in society are converging at
lightning speed with advancements in technology. One of the most
powerful technological advancements that has hit the scene in
recent history is the Internet, which in a few short years has
become the bedrock for information, communication, and commerce.
The collision of the Internet and America's thirst for knowledge
has given birth to a new industry that we call
"e-Learning." The e-Learning industry is marked by a
host of business models, some of which never before existed, with
no one player dominating the competitive landscape.
Information and
knowledge are the thermonuclear competitive weapons of our time.
Knowledge is more valuable and more powerful than natural
resources, big factories, or fat bankrolls.
-Tom Stewart, Intellectual Capital
With the understanding
that web-based training is a subset of the overall e-Learning
market, web-based training is the fastest growing, and soon to be
dominant, delivery mechanism for e-Learning. According to the Dain
Rauscher Wessels report,
We expect a shift toward
Web-based training. Due to the growing demand for employee
training coupled with time and budgetary constraints, managers are
looking for a more convenient and efficient alternative to
classroom-based instruction. Technology-based training has been a
viable alternative to classroom training over the past couple of
years. Web-based training is a rapidly growing part of
technology-based training. As mentioned, due to the rapid pace of
technological change, organizations are faced with the ongoing
challenge of retooling their workforce. Many organizations are
having difficulty keeping up with IT training demand and are
beginning to recognize the advantages of on-demand, Web-based
training options.
Several players in the
IT training market are pioneering the development of new learning
tools that deliver training in a convenient, cost-efficient
manner. The emerging delivery mechanism for these learning tools
is through the training company's Web site or through the client's
corporate intranet. We believe that this type of delivery model
has the potential to transform the corporate learning process by
bringing an extended platform of coursework to a much larger and
geographically dispersed number of students. The
overwhelming economic benefits should accelerate demand for
Web-based training over the next several years. Within the
IT training market, Web-based training is projected to grow from
5% in 1998 to 40% by the year 2003.
…We anticipate a more
robust demand environment going forward based on the following
factors, among others:
- Advancements in
Internet strategies and technologies;
- Maturation of
corporate infrastructures to handle Web-based deployment;
- Increased acceptance
by senior managements of the soundness of Internet-based
training;
- Increased buyer
willingness based on a greater understanding of Web-based
training- options; and
- Greater provider
understanding of the buyer’s requirements.
Based on these factors,
the market for e-learning is projected to exceed $7 billion in 2002
compared to $234 million in 1997. This represents an annual compound
growth rate of 98% over the five-year period. The forecast
represents incremental growth in Web-based training content,
services, and tools, as well as ongoing revenue from the shift in
technology-based delivery to Web-based delivery.
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