Fascinating Facts About Online Education in 2023

A lot of surprising facts exist about the online education market that most people have never heard because the legacy media have never devoted much attention to those kinds of stories. And that’s especially true of the legacy business press, which frequently appears to downplay some major developments in this arena.

Below we present some of the statistics our team has run across recently here at OnlineEducation.com that struck us as fascinating.

But first, we kick off our report with one particularly fascinating statistic because it’s so widely reported—and yet so completely false.

Before we present some of our investigation’s more interesting statistics, a caveat is in order. In our research, we ran across hundreds of assertions about online education purported to be facts, yet provided without citations or URL links to actual sources. Most of these unverified assertions continue to appear online after their first publication many years ago, even on websites that ostensibly appear to be credible and reliable sources.

The most extreme example relates to a statement attributed to IBM about productivity gains from e-learning. This assertion has probably been used tens of thousands of times worldwide in the online education industry—in vendor sales proposals, investment decisions, and startup company business plans and pitches to venture capital investors. “Nobody ever got fired for buying IBM” was a mantra of the business community throughout the 1980s, before Big Blue’s downsizing bloodbath after financial problems forced tens of thousands of layoffs late in the decade and an end to the company’s famous no-layoff policy.

Yet 34 years later, the IBM brand retains so much cachet that it still delivers magical credibility to facts and data linked with it—whether or not those assertions might actually be true or associated with IBM at all.

Although the precise language varies, one can find on Google hundreds of articles and documents containing an assertion that every dollar invested in online education returns $30 from gains in productivity. Usually attributed to a 2014 IBM white paper entitled “The Value of Training,” some of the plausible reasons cited are that enterprise employees trained online can promptly apply their new skills on the job and resume work more rapidly, presumably because they wouldn’t need to travel to another city and stay in a hotel to attend training seminars as typical before 2020 (and as we also discuss below.)

A frequently shared 2016 infographic that’s still online even claims this effect to be especially relevant for sales professionals whose earnings depend upon time spent in the field. Nevertheless, this statistic is false. It’s unequivocally complete and total nonsense.

In 2019 the British management consulting firm Learning Accelerators Ltd. launched an investigation after they could not find any discussion of this statistic in IBM’s report. What they learned was that in a different white paper titled “The Value of Training—and the High Cost of Doing Nothing,” IBM had cited a widely-quoted 200-page 1999 study by Merrill Lynch that described how Motorola estimated that “every dollar spent on training yielded US $30 in productivity gains within three years.”

However, Motorola was talking about corporate training in general. The company could not possibly have been talking about online training in 1999, which as Learning Accelerators correctly points out, did not exist in its current form nearly a quarter of a century ago.

Besides the public’s continuing trust in IBM’s brand, Learning Accelerators posits another explanation for why this outlandish claim about investment returns has proliferated so widely. The firm argues that writers at vendors and other outlets appear to be blatantly plagiarizing material from lists of “e-learning statistics” without performing any fact-checking or due diligence. The firm then raises a provocative legal issue:

In this case no “Investment Disclaimer” appears to have been applied and the information provided to many buyers of eLearning products and services appears to be demonstrably incorrect. Which raises the interesting question—if a vendor proposal for eLearning products or services was originally accepted on the basis of faulty investment advice and the client is later disappointed by the low productivity return—does any potential financial liability arise?

We relay this story about the bogus “IBM” data to raise an important point related to statistics about the online education industry. Unlike the legions of writers who should know better than to parrot nonsense about the returns from e-learning without performing any fact-checking, we’ve taken appropriate steps to verify all the interesting statistics that appear below.

Nonetheless, because so many of the statistics about this industry shared online are demonstrably false, readers still need to exercise heightened critical thinking and discernment skills whenever they see a statistic like that one on the internet. And that’s especially true if they might be making a high-value business or investment decision based in part on that sort of assertion.

Most people have yet to learn of just how enormous the worldwide market for online education is becoming. The economic statistics website Statista forecasts that the total global online education market, including all market segments, will approach $400 billion by 2026. That’s double the market size of $200 billion only seven years earlier in 2019.

The statistics platform similarly expects some key market segments also to double. These include the segments for learning management systems, from $18 to $36 billion. They also include the rapid e-learning market, from $2.0 to $4.5 billion. However, some segments are poised for even more spectacular growth. For example, Statista forecasts the market for virtual classrooms to triple, from $11.5 to $33.5 billion.

Statista’s projections are probably a 2022 update of the estimates originally reported in “Global E-Learning Market Analysis 2019,” a study compiled by Syngene Research. At that time Syngene estimated that the market would reach $336.98 billion by 2026, and would likely grow at a compound annual growth rate (CAGR) of 9.1 percent between 2018 and 2026.

Sixty-six percent of Americans have been more motivated to seek online learning since the pandemic began. We know that’s a fact because during 2020, Coursera’s user base climbed by two-thirds, from 45 million learners in 2019 to 75 million in 2021.

As a result, a 2022 analysis of online learning trends by the Vancouver-based online course creation software developer Thinkific shows unprecedented surges in student demand for online instruction between 2019 and 2021, irrespective of economic sector or market segment.

For example, student demand for software and technology courses skyrocketed by 3,600 percent. Meanwhile, demand for health and fitness instruction increased by 2,650 percent, while arts and entertainment courses climbed 2,500 percent.

Compared with the tech courses, marketing and business education posted anemic gains of only 1,820 percent, and personal development instruction ended up in the study’s cellar, gaining a paltry 1,270 percent.

Enterprise customers are also snatching up online courses for their employees. So far, about 2,300 companies have signed up for the new Coursera Business product line, including a quarter of the Fortune 500. Why would those firms do that? An analysis prepared by KPMG International in 2015 indicates that travel expenses alone, such as flights and hotel stays, account for up to 60 percent of total employee training costs—and companies that switch to online education never pay all these costs.

MOOCs, or massive open online courses, have been plagued by minuscule completion rates for years. For example, this MIT study published in the journal Science found completion rates typically around three percent for many such courses.

But a new type of online course boasts spectacular completion rates above 70 percent, and in many classes, rates approaching 100 percent. Hailed as the “beginning of a new era of online education,” these courses are known as cohort-based courses, or CBCs.

This “new era” characterization seems ironic because this model is nothing more than the traditional in-person higher education model ported to an online environment. Unlike the flexible and individualized asynchronous online courses that take advantage of many of the best capabilities available through online instruction, CBCs are more rigid courses taken by a group of students—the cohort—at the same time. Such students learn from their teachers in a live environment where they interact, collaborate, and compete for grades with classmates. They progress through the syllabus topics together at the same pace, all graduate simultaneously, and enjoy access to their own alumni network.

Reportedly the results include a sense of community and high accountability, which lead to dazzling completion rates. One of the first cohort programs, the 2016 altMBA led by Seth Godin, surprised observers when it returned a completion rate of 96 percent.

Another online education startup, New York University marketing professor Scott Galloway’s Section 4, boasts completion rates above 70 percent. And Professor David Shrier of London’s Imperial College Business School reports routine completion rates for his similar executive education startup Esme Learning of 98 to 100 percent.

Most of us have never heard of most of the obscure companies within the current crop of venture-funded startups in the United States. However, as Statista also describes in their report “Leading EdTech Unicorns Worldwide in 2022, by Valuation,” four of these American unicorns are online education providers poised for massive growth, and their valuations are colossal:

BetterUp

Today, business coaching is big business. The firm currently with the largest market capitalization, San Francisco-based BetterUp offers an artificial intelligence platform that matches enterprise employees with peak performance coaches for online corporate training and development purposes. Its current valuation is about $4.7 billion.

Articulate

The next best-capitalized firm, New York City-based Articulate develops and markets an online course-building platform similar to Thinkific or Teachable, but geared instead for corporate workplace training and enterprise management systems. Articulate currently carries a market capitalization of about $3.7 billion.

Course Hero

Course Hero embodies the ultimate “I wish I had thought of that first” business concept. Whoever would have thought only a couple of years ago that collections of university course lecture notes and old tests could be fashioned into a multi-billion-dollar online business? Silicon Valley-based Course Hero provides study resources that support college and graduate students through its online learning platform valued at about $3.6 billion.

Handshake

San Francisco-based Handshake’s platform helps college and graduate students win internship and job offers at graduation. The firm provides an online career network that matches students with corporate recruiters and hiring companies. Like Course Hero, Handshake’s current market cap is about $3.6 billion.