Edtech, a portmanteau of “education technology”, refers to technology that helps facilitate learning.

China’s current, watered-down edtech industry is not indicative of the global appetite for the services offered by the technology. Regions like South America are showing a desire for the teaching and learning on offer, so the industry will bloom there instead.

China’s edtech clampdown has overturned a lucrative industry, but companies have survived

In July 2021, Beijing clamped down on the lucrative private tutoring industry in China to make the cost of living cheaper for families. The government did this by banning for-profit tutoring in core school subjects and restricting foreign investment in the sector.

According to the forthcoming edtech report from the GlobalData Thematic Intelligence team, enterprises are now looking overseas for growth and adapting to new markets. The report states that there are significant barriers to overcome when localizing in a new country, but it is possible to take market share. This gives Chinese companies a license to debut their innovative technology abroad instead of at home.

For instance, Beifang International Education Group (BIEG) is China’s largest private education company. It runs 22 universities and vocational schools and has close to 350,000 students. In October 2023, a memorandum of understanding was signed between BIEG and Coventry University with the intent of offering new education resources.

Despite restrictions, China is still the largest market for educational technology. STEM subjects and vocational schools are still supported by Chinese government policy, however this positive environment may quickly change.

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China’s edtech ambitions are weak, but potential is recognised in South America

Edtech helped Brazilian operators like Cogna Educação, Anima Educação, and Afya see their stocks rise as the theme gained more traction in the region. Brazil’s demographics mean that edtech can have an important impact on the nation; it has a sizable young population and a correspondingly large educational system to go alongside it.

However, there is a lot of inefficiency in the system, and standards are below other South American countries, meaning that there is undoubtedly potential for Brazilian companies to become leaders within the higher education space. Also, consumers in Brazil are turning to online education services to improve their skills. A survey by Economist Impact found that 86% of Brazilian youth had participated in online educational courses, in comparison to 74% in the US. It is evident that there is high demand for edtech services in the nation.

Children and teenagers are at more risk

However, with the increase in the popularity of edtech, there are growing issues. For example, in April 2023, Human Rights Watch reported that “educational websites directed at Brazilian students, including two created by state education secretariats, conducted surveillance on children and harvested their personal data”. Edtech companies could potentially access very personal data, for instance, health information, location, and chat histories.

Children and teenagers are at more risk, and edtech companies often operate at a primary or secondary school level, making data privacy an issue that cannot be ignored. This issue can start to be resolved by edtech companies placing more emphasis on protection measures like encryption and multifactor authentication. Chinese edtech ambitions may have had to be watered down, but developments in nations like Brazil show the edtech theme still has worldwide potential.