Hybrid educational services
Hybrid educational services
Business Model Description
Bring institutions with high-quality academic programs to all regions of the country allowing access to information and knowledge with a face-to-face digital hybrid model where students in remote areas receive classes in real-time, interacting with teachers and peers technology and resources to support the learning experience.
Expected Impact
This initiative intends to to improve the quality of education in the country, and give population from remote areas access to a good education.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
Sector Classification
Education
Development need
> Illiteracy rate for the population aged 15 years average of 4.8% by 2019, greater for men than women (5.0% vs. 4.5%) and greater for rural areas (10.9%) than urban areas (3.1%).
Policy priority
> The Institutional Strategic Plan of the MinEducacion under construction and the National Ten-Year Education Plan 2016-2026 seek to regulate the scope of education, build an effective educational system, public policy for training educators, promote the use of new technologies, give priority to the development of rural population, among others.
Gender inequalities and marginalization issues
> 10.4% of women who identify themselves as peasant women do not have any educational level. 44.4% reach the basic elementary level.
Investment opportunities
> The government plans to invest in quality education for a future with opportunities for all USD$ 60B (18)
> It also has an additional +USD$ 5B budgeted for the digital transformation pact (18)
Key bottlenecks
> Only 42.56% of households in Colombia have computers and/or tablets, reducing the population that can get internet access
> 23.8M people have no internet presenting significant asymmetries between urban and rural, where 45.7% in the head municipalities have connectivity vs. 6.2 % in scattered rural areas
Education Infrastructure
Development need
> The gap between urban-rural net coverage in preschool, primary and secondary education has been growing since 2014, reaching a difference of 9 percentage points in 2017
> 30% of the children living in rural areas desert from education
Policy priority
> The Institutional Strategic Plan of the MinEducacion, there is a Rural Education Policy that will include teacher training, strengthening and adaptation of the infrastructure and investments for the infrastructure, and schools' provision.
> The government in 2021 plans to spend in construction, improvement, and adaptation of the educational service + USD$ 111M and strengthening the conditions to achieve educational trajectories + USD$ 46M.
Gender inequalities and marginalization issues
> The rural population that has a nine percentage point difference in the net coverage of preschool, primary and secondary education
> 68.6% of the children in rural areas that have no access to middle education due to lack of coverage (31)
Investment opportunities
> The National Development Plan (2018-2020) strives to provide quality comprehensive care in primary education to achieve universal coverage while improving the quality of higher education by recognizing and promoting the diversity of academic institutions and programs (19)
Key bottlenecks
> Only 42.56% of households in Colombia have computers and/or tablets, reducing the population that can get internet access
> 23.8M people have no internet presenting significant asymmetries between urban and rural, where 45.7% in the head municipalities have connectivity vs. 6.2 % in scattered rural areas
Educational Technology
Pipeline Opportunity
Hybrid educational services
Bring institutions with high-quality academic programs to all regions of the country allowing access to information and knowledge with a face-to-face digital hybrid model where students in remote areas receive classes in real-time, interacting with teachers and peers technology and resources to support the learning experience.
Business Case
Market Size and Environment
> USD 1 billion
10% - 15%
> 200.0000 students were the total amount of students in virtual education in 2018, reflecting the sustained increase in a different education (16)
> An average professional degree in Edupol costs USD$ 900 (17). If every young Colombian decided to study under this model, the market's value would result in USD$ 10.5B.
> The EdTech and Smart Classroom market is expected to grow at a CAGR of 10.5% between 2019 and 2027 (22).
Indicative Return
10% - 15%
In 2016, Gray Matters Capital (GMC) invested USD$ 2M in Aulas Amigas. GMC is a fund that seeks returns in the range of 12%-18% (18).
Investment Timeframe
Medium Term (5–10 years)
According to local investors interviewed, an expected holding period for investments in remote educational services with real-time courses would be between 5 to 10 years.
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Business - Business Model Unproven
Capital - CapEx Intensive
Capital - Requires Subsidy
Impact Case
Sustainable Development Need
> Education coverage in Colombia is not universal. First, 47.6% of children have access to middle school in urban areas while 31.4% in rural areas. Secondly, only 53.5% of young adults (17-22 years old) have access to technical, university, or college degree programs (1).
> Colombia does not enjoy high-quality education: (1) It has the worst rating among OECD countries in terms of the academic performance measured by the PISA test (2) Only 14% of urban schools and 4% of rural schools are ranked as superior quality according to SABER tests (1).
> Although the costs of education in Colombia are no the most expensive in absolute terms than those in Mexico or Brazil, they are higher relative to the country's minimum wage or debt capacity of families (3).
Gender & Marginalisation
> The rural population that has a nine percentage point difference in the net coverage of preschool, primary and secondary education.
> 68.6% of the children in rural areas that have no access to middle education due to lack of coverage (31).
Expected Development Outcome
> Improve middle and higher education inclusion for people living in remote areas or those that do not have the resources to be part of the traditional educational model.
> Improve the quality of education to people who live in the rural parts of Colombia, improving the probability of being accepted in the labor market and improving beneficiaries' welfare.
> Allow different educational options with greater coverage and quality without the need for mobilization so it can offer a lower cost.
Gender & Marginalisation
> E-learning will not only provide rural communities with the possibility of educating themselves but even more importantly, receive a quality education. Due to their remoteness or geographical difficulty, these communities do not receive the necessary number of teachers and quality education.
> By using these platforms, coverage gaps can be reduced, as it will facilitate the arrival of people in remote areas.+
Primary SDGs addressed
4.1.1 Proportion of children and young people (a) in grades 2/3; (b) at the end of primary; and (c) at the end of lower secondary achieving at least a minimum proficiency level in (i) reading and (ii) mathematics, by sex
4.1.2 Completion rate (primary education, lower secondary education, upper secondary education)
4.a.1 Proportion of schools offering basic services, by type of service
> Students with a satisfactory or advanced performance level, 5th grade, language, national tests, (2017): 43% (26). > Students with a satisfactory or advanced performance level, 5th grade, mathematics, national tests (2017): 28% (26). > Students with a satisfactory or advanced performance level, 9th grade, language, national tests, (2017): 48% (26). > Students with a satisfactory or advanced performance level, 9th grade, mathematics, national tests (2017): 26% (26).
> Gross coverage rate in secondary education varies significantly from department to department in a range from 23.9% to 100%, with the national average in 85.84%. Regarding gender, girls had a coverage rate of 91.6% (2019) while boys had 80.3% (2019) (26).
> The gap between urban and rural net coverage in preschool, primary and secondary education was nine percentage points in 2019 (26). > The percentage of students at official educational venues with internet connection versus the total number of students of official educational venues reaches 62% for the national average. However, within the country, it ranges from 16.5% to 96.6% (26).
> Students with a satisfactory or advanced performance level, 5th grade, language, national tests, (2030) 44.5% (26). > Students with a satisfactory or advanced performance level, 5th grade, mathematics, national tests (2030) 38.1% (26). > Students with a satisfactory or advanced performance level, 9th grade, language, national tests already exceeded the goal (26). > Students with a satisfactory or advanced performance level, 9th grade, mathematics, national tests, (2030) 29.7% (26).
> Gross coverage rate in secondary education is expected to reach 95% by 2030 (26).
> The gap between urban and rural net coverage in preschool, primary and secondary education is expected to decrease to 5.5 percentage points by 2030 (26). > The percentage of students at official educational venues with internet connection versus the total number of students of official educational venues are expected to reach 100% by 2030 (26).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Public sector
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Impact Risks
> Loss of jobs for local education professionals.
> Loss of development of social skills due to non-face-to-face coexistence.
> Excess screen exposure can cause eye problems.
> Gender inequality and/or marginalization risk: Loss of cultural values that can be preserved through interaction and not remote education.
Impact Classification
What
Positive and important outcome due to increase in education coverage.
Risk
Lack of educational coverage due to financial or geographical reasons.
Impact Thesis
This initiative intends to to improve the quality of education in the country, and give population from remote areas access to a good education.
Enabling Environment
Policy Environment
(National Development Plan (2018-2020)): Strives to provide quality comprehensive care in primary education to achieve universal coverage while improving the quality of higher education by recognizing and promoting the diversity of academic institutions and programs (19).
(Ten-Year National Education Plan 2016-2026): Seeks that new information technologies and telecommunications are transversal in the educational system. The latter means including the topics of the critical use and appropriation of technology, culture, and the digital economy into the curricula. But MinEducacion clearly states these changes start with teachers' development in the area (28).
(Technologies to learn): Develop a policy that aims to promote innovation in educational practices through digital technologies to develop competencies in students of preschool, primary and secondary education, defined by DNP, MinEducacion, and MinTIC. This by increasing access to digital technologies, improving internet connectivity, promoting the appropriation of digital technologies, and strengthening monitoring and evaluation to improve use, access, and impact. of digital technologies (29).
Financial Environment
Financial incentives: Global investments in EdTech will reach USD$ 252B by 2020. The global e-learning market is growing over 14% annually, being LatAm the fourth largest market with expectations to generate revenues of USD$ 3B in 2023 (22).
Fiscal incentives: According to law 1943 of 2018, virtual education services for the development of digital content are excluded from the sales tax (VAT) according to the regulations of the MinTIC (30).
Regulatory Environment
(Law 1978 of 2019): Encourages the use of the ICT in different sectors such as education by promoting internet coverage and tech-adoption for virtual education (20).
(Decree 1075, 2015): in which it dictates the rules for the education sector, including the guidelines for certified virtual and long-distance education (21).
(Decree 2226 of 2019): Article 17 requires the SNCTI to coordinate with the MinEducacion for the incorporation of technology in formation. Article 19 seeks digital literacy in learning skills in primary education (27).
(Law 1943 of 2018): Article 10 states that virtual education services for the development of digital content will be excluded from sales tax (VAT) (30).
Marketplace Participants
Private Sector
Kuepa, Aulas Amigas, and Edupol are educational institutions with a presence in LatAm bringing high-quality education programs to remote regions, allowing people to earn a degree or gain professional abilities without incurring the costs of regular tuitions.
Government
The MinTIC and the MinEducacion have carried out actions to advance the connectivity of students, as part of their strategy to Learn Digital (9).
Multilaterals
UNICEF has adapted and expanded its digital platforms for communication, monitoring, and remote programming. These platforms include virtual learning courses, educational sessions on radio and television, telemedicine services, among others (10).
Target Locations
References
- (1) DNP (2017) – Plan Nacional de Desarrollo (2018 – 2022)
- (2) Portafolio (2019) – Colombia, con la peor nota de la Ocde en pruebas PISA. Accessed May 13th 2020
- (3) Semana (2015) – Costo de la educación superior en Colombia. Accessed May 13th 2020
- (4) DANE (2018) – Censo Poblacional y de Vivienda. Accesssed May 12th 2020
- (5) MinEducación (2019) – Estadísticas sectoriales de educación. Accessed May 13th 2020
- (6) Equidad Mujer.gov (2020) Teachers day
- (7) MinEducacion (2019) 2020 budget aproved: the largest budget in history
- (8) El Espectador (2013) Aspiration difficulties
- (9) MinEducacion (2020) National Government advances actions to improve the connectivity of students to the educational platforms that are part of the Learn Digital strategy
- (10) UNICEF (2020) Update on UNICEF humanitarian action: the 2019 coronavirus disease pandemic
- (16) ElTiempo (2020) – ¿Cómo está la educación virtual en Colombia frente a la región? Accessed May 23rd 2020
- (17) Edupol (2020) - Aulas virtuales Accessed May 22nd 2020
- (18) Gray Matters Capital (2018) – Aulas Amigas. Accessed May 30th 2020
- (19) Gray Matters Capital (2018) – Aulas Amigas. Accessed May 30th 2020
- (20) Plan Nacional de Desarrollo (2018 – 2020)
- (21) Jenny Villada (2019) – La educación virtual:Retos y desafíos en Colombia
- (22) The Insight Partners (2019) South America EdTech and Smart Classroom Market
- (23) Edupol (2020) - Aulas virtuales Accessed may 22nd 2020
- (24) Lusting (2019) - An Overview of Edtech in Latin America. Accessed May 22nd 2020
- (25) Escuela Nueva. Accesed August 20th 2020
- (26) National Planning Department (2019) - 2030 Agenda in Colombia
- (27) Administrative Department of the Public Function (2019) Decree 2226 of 2019
- (28)MinEducacion (2016) Ten-Year National Education Plan 2016-2026
- (29) DNP, MinEducacion and MinTIC (2020) Technologies to Learn: National Policy to promote innovation in educational practices through digital technologies
- (30) MinTic (2018) Law 1943 established as following