Let’s start with the quote from Gartner “Top 10 Strategic Technology Trends for 2020”:
The future will be characterized by smart devices delivering increasingly insightful digital services everywhere. We call this the “intelligent digital mesh.” It can be described as:
The intelligent theme explores how AI — with a particular emphasis on machine learning — is seeping into virtually every existing technology and creating entirely new technology categories. The exploitation of AI will be a major battleground for technology providers through 2022. Using AI for well-scoped and targeted purposes delivers more flexible, insightful and increasingly autonomous systems.
The digital theme focuses on blending the digital and physical worlds to create a natural and immersive digitally enhanced experience. As the amount of data that things produce increases exponentially, compute power shifts to the edge to process stream data and send summary data to central systems. Digital trends, along with opportunities enabled by AI, are driving the next generation of digital business and the creation of digital business ecosystems. In this intelligent digital world, massive amounts of rich and varied data are generated, thus necessitating a greater focus on digital ethics and privacy and on the transparency and traceability that they require.
The mesh theme refers to exploiting connections between an expanding set of people and businesses — as well as devices, content, and services — to deliver digital business outcomes. The mesh demands new capabilities that reduce friction, provide in-depth security and respond to events across these connections.
Intelligent digital mesh has been a consistent theme of Gartner’s strategic technology trends for the past few years, and it will continue as an important underlying force over the next five years. However, this theme focuses on the set of technical characteristics of the trend. It is also important to put the trends in the context of the people and organizations that will be impacted. Rather than building a technology stack and then exploring the potential applications, organizations must consider the business and human context first. We call this “people-centric smart spaces” and this structure is used to organize and evaluate the primary impact of the strategic trends for 2020.
According to this perspective, Gartner has identified the top 10 technology trends.
However, “silos” will be the roadblock to that future. Intelligence comes from data, the basis of AI power is the aggregate of data. And the “mesh” needs exploiting connectivity across boundaries to integrate everything needed for better user experience. The collaboration of people for the integration of technologies without limits is the key.
It’s also true for enterprises going through the digital transformation based on analytics, automation, and AI. From the smart factory to the supply chain to customer needs, the data should be connected and computed to enable agile and responsive management across boundaries. As digital networks and algorithms are woven into the fabric of firms, company divisions and even industries begin to function differently and the lines between them blur.
We envision the L&D department or corporate universities are connectors to support the AI transformation since learning is the connector for employees’ brains and hence actions. There is a need for data connectivity in this new model in order to make sense of how to support people better.
Because of the faster pace of change and the complexity of the VUCA age, a lot of learning is often happening in the work by solving problems and creating values as well as tacit knowledge. Australia Swinburne University Centre for the New Workforce argues that “learning-integrated work” is the model for the future workforce with the augmentation of technologies. (‘Peak Human Potential – Preparing Australia’s workforce for the digital future’) Analytics, automation, AI, wearables are among those technologies that build up “Augmented Intelligence” for workers. The old “learning-then-work” model can only serve the bottom layer of this pyramid below.
Content isn’t the most critical asset in this new model, the desired skills and competencies are. The traditional competency modeling method might be too slow to respond. Extracting knowledge, behaviors, and workflows from high performers, and leverage data feedback directly from business outcomes to adjust the old competency model will be more agile. Naturally, connecting that data and patterns from high performers with other workers will be desired.
As everything is more connected in the industry 4.0 age, how businesses are led, organized and resourced and how decisions are made might be shifted in order to respond faster to the environment — it will be more data-driven if insights can be unlocked from the connected data across the boundaries of departments in enterprises or even outside. More insights between learning and business outcomes can support workers to develop themselves better as well as own the learning (learning shifts from push to pull).
“China is a sleeping giant. Let her sleep, for when she wakes she will move the world.” ― Napoleon Bonaparte”
2015, NetDragon Websoft Inc., a leading developer and operator of online games and mobile internet platforms in China, acquired Promethean, a London-listed world leader in the rapidly growing global interactive learning technologies market.
2016, China’s WeiDong acquired DEMOS international vocational education group, the 2nd largest vocational education player in Europe with 45 years of history, and Brest Business School.
2017, NetDragon acquired JumpStart, an educational game company behind iconic titles including Math Blaster.
2018, NetDragon bought Sokikom, an online game-based math program, and gobbled up Edmodo, one the largest online social communities of teachers and students in the world.
These are just a few examples of China’s interest in education industry.
The Capital Momentum
2018 will likely see China out-invest the US in education innovation and technology 3 to 1. Ten companies alone are responsible for 50%of the $4.5B of venture capital in 2018 fueling China’s unstoppable appetite for quality education at scale. US investment has been surpassed by China since 2 years ago and the gap is growing. The charts below demonstrate the growth momentum of China education capital market. (according to HolonIQ)
Source: HolonIQ
The Opportunity
Because of its population size, China education market could be the most attractive one in the world. Now the young generation of parents want and can afford a quality education beyond rote memorization, plus the government is revolutionizing its education system with several new policies published recently. And, for adult education, the country is transforming its workforce with remarkable ambition. The top-down system led by the government strategic policies is quite efficient. These create an opportunity that’s unimaginable before and elsewhere. But, what are the market needs?
For K12:
Quality contents are always desired in China, and localization is necessary to scale up although entering those flourishing international schools and local programs is a great start. Learning English is always in high demand, but the market is also very crowded. One well-known unicorn VIPKID grows on this need basis plus the live tutoring model – which is proven to be well-accepted in China. Its success has inspired other learning programs to follow suit.
Facing the 4th industry revolution with AI and robots shaping the future of work rapidly, individuals and nations all start to value higher order thinking skills and soft skills. For K12, pan-quality education (sports, music, dance, art, critical thinking, STEM, coding) is an emerging hot segment, differentiated products that are hard to be replaced will be appreciated. Combining online live teaching model or self-learning, China kids have started to learn coding, music or arts online.
Both school education market and the after-school program market are huge. But selling to schools is much harder than selling to parents. For the later, leveraging social media tools, current after-school programs and celebrity parents could be very helpful. But, for the former, collaborating with the right partners is crucial. Above all, no matter you are in to-C, to-B or to-S (School) model, the central government policies have significant impact on the overall market.
China’s government has started to push AI education into K12 schools. In the latest published education standard for high schools by MOE on Jan. 16, 2018, Computer Science education has been added as required and elective courses like in the US. While China’s government puts more emphasis on“data and information” in order to build up the awareness and knowledge toward understanding AI, which is mainly built on big data. (read more here) The enthusiasm about AI education in China K12 vertical is higher than any other countries.
For Vocational, Higher Education and Corporate Learning
These are different verticals facing different stakeholders, but they are all related with workforce needs. The job market is currently under reshaping and restructuring in China like in other countries. Technical skills building for IoT, AI, smart manufacturing, Blockchain and semiconductor are in high demand. Also the awareness education for non-technical roles (such as HR managers or L&D designers) are much needed, related online education resources are of high interest in China.
Apparently, China central government is urging to level up the skillsets of its workforce. Its policy encourages leveraging global quality education resources or programs. Collaborations across boundaries are happening more than ever. School systems work with enterprises to bridge the skill gap. International collaborations such as international learning pathways, both online and in-person, are very welcome. Technology solutions to support learning ecosystem will be appreciated.
As for leveraging AI in education systems or corporate learning, it’s just at the early stage. The interest is high, but there are too many marketing talks and too less evidence-based implementation results and learning science studies. That means the opportunity is huge. China has some advantages in this than other countries – one, the digitalization of education is better than most of other countries; second, there is less resistance for collecting data because of privacy concern; third, the user base is much bigger.
On China’s stock exchange market, the valuation is usually higher than listing inother markets. And, China is opening its stock market more to international investors, it will increase the funding entering the market. Moreover, Shanghai Exchange is setting up a new marketplace called Ke-Chuang-Ban for small companies developing innovations aligned to the central government’s strategic goals. It will greatly reduce the barrier of connecting with funding much needed in growing new businesses.
The Challenges
But, entering China market isn’t easy.
First, it’s the language barrier. What this meant is more than the language itself, it is the right terms you should use in order to let your target audience recognize and resonant with your value. For example, China uses “online education” or “Internet + education” for what we usually call digital learning. Furthermore, the usage of buzzwords such as AI is more aggressive, many are not true in reality-check, but it does draw attention.
The second challenge is the culture difference. The first frustration in this regard might be about building trust between people, the second is about value proposition. Many assumptions, conscious or unconscious, need to be re-examined. When marketing to decision makers, be it school administrators, HR managers or parents, you need to know what they value the most and how others are marketing their products – culture differences matter.
The third challenge is understanding and navigating the regulations, a lot of them are not friendly to foreigners. Having a local partner is particularly important in China, both for cultural reasons and strict regulations.
Finding the right partners is a critical decision, you should avoid giving exclusive right to one partner since the market is very big and possibilities are evolving. Developing dynamic, multi-faceted and deeper collaborations will increase your winning possibilities. Your business model might need to adjust in a big or small way. China market is highly competitive, the pace is fast, and competitors are a lot. Many winners need to integrate more resources in the vertical.
Education business is to serve humans, education systems and organizations, the localization for China market is necessary and should be like establishing a startup. Starting with collaborating with clients and testbeds for implementation testing (iterations) is very helpful. For example, Wise Ocean Accelerator connects with such testbeds and partners in major education verticals to help with market entry.
The other challenges include finding local technology support such as hosting cloud-based service for your product, finding investors and how to do local market competitor analysis correctly. Knowing how to protect your IP should be on your check-list as well.
Should You Join the Market?
China invests 4% of its GDP in education each year. There are around 260M K16 learners in China, plus all adult learners with learning needs driven by 4th industry revolution. As always, with opportunities come challenges, and Wise Ocean Accelerator aims to help you with these challenges. But the commitment of team efforts and resources is necessary, understanding what it takes to succeed in China is the first step.
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