Why Are Edtech Companies Under Government Scanner?

Kinnary Nensee Kinnary Nensee
Jul 19, 2022 4 min read
Why Are Edtech Companies Under Government Scanner?

It is the combined use of computer hardware, software and educational theory to enhance, engage and individualised classroom learning. Edtech refers to the industry of companies that create educational technology.

Edtech’s growth can be attributed to the potential scalability for individualised learning. IoT devices are being acknowledged and appreciated for their ability to create digital classrooms, no matter where the student is.

Blockchain tools are assisting teachers in grading tests and holding students responsible for their work. Edtech tools are changing the very core of what constituted classrooms in the past.

What Are the Purpose and Benefits of Edtech?
Why Is Edtech Under Government Scanner?
What Steps Should an Edtech Company Take To Comply With the Government?
Challenges Faced by Edtech Companies

What Are the Purpose and Benefits of Edtech?

The last two years have seen monumental growth in the Edtech industry fuelled by a need to continue education during the harsh lockdowns of the COVID-19 pandemic. Edtech fulfils a variety of purposes in the education field.

  • Improved student outcomes.
  • Enhanced individualized education.
  • Reduces the teaching burden on instructors.
  • Better engagement with the students.
  • Accessible long-distance learning.
  • Gamification of learning inducing fun.
  • Accommodation of multiple learning styles.
  • Instant feedback to teachers.
  • Encourages collaboration.

Why Is Edtech Under Government Scanner?

The Department of Consumer Affairs has taken a very serious note of the complaints they have received over the aggressive misselling of courses by Edtech companies like Byju’s, Vedantu, UpGrad, Unacademy, Great Learning, WhiteHat Jr and a few other edtech startups.

The Advertising Standards Council of India (ASCI), in its annual complaint report, shows that the education sector has emerged as the largest violator of the advertising code between April 2021 and March 2022. The ASCI has stated that nearly 33% of the total complaints that it has received in this time period pertaining to the Edtech sector.

It also highlighted that these complaints were not a new development, considering several Edtech startups have lately been under the consumer radar for misleading advertisements. A case in point was the case between Pradeep Poonia and WhiteHat Jr. in 2020-2021.

Pradeep Ponia on LinkedIn
Pradeep Ponia on LinkedIn

The limelight on the Edtech sector has also been highlighted by the UGC (University Grants Commission) issuing a diktat to higher education institutes to withdraw any degree or diploma programs that are offered in partnerships with Edtech companies.

On Friday, the government issued a warning to the Edtech companies, clearly stating that it will be forced to bring stringent guidelines to curb unfair trade practices and encourage better transparency.

What Steps Should an Edtech Company Take To Comply With the Government?

In absence of self-regulation by the Edtech companies, the government has warned of stringent regulations to address the below-mentioned agenda :

  • Curb misleading advertisements.
  • Upholding consumer interests across the system.
  • Deal with blatant disregard for existing guidelines and regulations.
  • Maintain robust checkpoints that align with consumer interest.
  • Address the high cost of education through Edtech companies and make it more affordable.

Challenges Faced by Edtech Companies

The Edtech industry witnessed a boom in 2020, thanks to the lockdowns bringing the face-to-face ways of teaching to a standstill. It has helped to modernize an industry that was deeply traditional and reserved.

The opportunities and potential for growth of Edtech are limitless. However, it also offers some big challenges.

Survival in a highly competitive market

This industry is tough and unforgiving due to the very fluid nature of technology. Constant upgrades and newer technological advances mean the industry has to not only keep up with it but also has to pitch a very unique value proposition to its subscribers.

A new entrant needs a new value proposition and an older player needs to adapt consistently to keep their value propositions relevant and unique over time.

Building partnerships with a traditional industry

This is probably the biggest challenge of them all. To earn the trust of an industry that is as traditional as it is old. Validation of claims of adding value needs strong documentation support.

Being Relevant in an ever-changing world of technology

This means staying on top of every new technological advance that occurs in this sector and also making it relevant to the existing business model. This is as time-consuming as it is costly. A necessary evil tool for survival.

An audience-grabbing market strategy

The first step is to make a product to fit the market. Then reach out to the target audience. Of course, the biggest consideration is the price of the product. And the last and most relevant is getting and keeping customers.

Managing fears about data collection and security

While the world has moved online, the fears of data collection and security are very real. These fears, sometimes, rule the decision-making process and have to be successfully addressed.

Communication Flow

The communication gap between the company and its target audience has to be properly addressed. The target audience and their differences have to be understood and the communication technology has to be designed accordingly.

User activation and usage

The only way to retain the customers year after year is to encourage user engagement, spark their interest and continually remind them of the product's value. The app has to be easy to use and easily accessible. This requires constant software updates and regular customer communication.

Managing retention

This is possible through a high level of customer service, offering different levels to cover beginners, intermediate and higher levels of educational material, and offering a customized learning path to suit a customer’s need.

Conclusion

While the Edtech industry saw a great boom during the pandemic lockdowns, now the schools have reopened. There is also a dearth of funding options due to a slowing economy and the looming threat of an economic crisis.  

All this is leading to massive layoffs within the sector and shutdowns of a few startups. Now, the edtech industry is facing government scrutiny and ire. Presently, it looks like the USD 3 billion market is in a spot of trouble.

However, with the vastness of the world and the opportunities that this sector of education has opened up, it is clear, that while it may undergo some changes, it is here to stay.

FAQs

Why are Edtech companies under the government scanner?

The government has concerns over the complaints regarding misleading advertisements by edtech firms in India.

What is the future of EdTech companies?

As per a report, the edtech industry will reach $4 billion by 2025.

Why do EdTech startups fail?

Edtech startups spend huge amounts of money on advertising and gaining customers but they fail to make money from their business models.

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