A student listening attentively as a tutor is teaching online. One thing’s for sure, the digital education sector is getting competitive and Malaysia needs to step up its game or once again be left behind. — Photo: Didik Kita
INVESTING in digital education is advancing globally. And the Covid-19 pandemic has a lot to do with this.
When the pandemic hit, classrooms around the world had to quickly find ways to ensure that lessons continued. Most switched to an online setting for students and teachers to carry on learning and teaching.
This is where it gets interesting for the investor as a host of opportunities emerged, especially in the areas of online learning platforms, dis-tance learning programmes and educational software.
These are not entirely new, especially in the more developed nations which have been at it for more than a decade.
The pandemic, however, quickened their pace of growth. In recent years, many quality online education-related programmes, platforms and material companies have surfaced and gone public, giving investors an opportunity to have a slice of the seemingly lucrative market.
“We believe the size of the digital education market could be even larger now in the wake of the pandemic which made many educational institutions and organisations to rapidly adapt technology in education,” says J.P. Morgan Asset Management in a report to clients.
It sees the global digital education market achieving a compound annual growth rate or CAGR of 31% next year, reaching an estimated market size of US$33.2bil (RM154.99bil).
In Malaysia, it’s coming to a year since the National Digital Education Policy was introduced.
The policy, which focuses on reducing the digital gap and impro-ving the digital-based learning process at schools, is crucial as it plays a key role in ensuring that we are on par with our counterparts.
More importantly, it is supposed to help the country develop human capital that is competitive and future-proof.
Already, Malaysia has fallen seven rungs in the latest International Institute for Management Development World Competitiveness Ranking amid concerns that this could be a trend if the country does not buck up.
Digital education is also crucial to realise broader economic and social outcomes, an OECD report notes.
“The wider economy is moving away from reliance on low-skilled routine tasks, towards technology-based non-routine labour. In addition to digital skills, these trends require a broad spectrum of cognitive and socio-emotional skills to adapt to a fast-moving professional environment.”
Despite this, Malaysia seriously lacks quality digital education companies. There are almost none to invest in. In fact, even with the implementation of the National Digital Education Policy, not much has changed yet in terms of what happens in the classroom and student learning, says a CEO of a non-profit teaching organisation.
“But teachers do have access to a lot (more) digital tools, including quite a few AI platforms,” he says.
On Bursa Malaysia, there is a company called Sasbadi Holdings Bhd
which has some digital education element to it but the group still considers itself “principally, a publisher of educational materials, undertaking print publishing, focusing on primary and secondary school education.”
Apart from Sasbadi, the only two education companies that are listed on the stock exchange are SEG International Bhd (SEGi) and Cyberjaya Education Group Bhd, but they are in the traditional tertiary education sector.
There is talk that HELP University, once listed and later delisted, will be making its way to Bursa Malaysia again, with an IPO planned for 2026. But again, this will be more of a conventional education play.
In Singapore, there are numerous digital education start-ups, which are at their final stages of start-up financing, meaning they are fairly successful, stable and ready to expand in a major way.
Examples include Emeritus, an online platform which offers tutoring; LingoAce, also an online platform but specifically for the learning of languages; and Cialfo, which sells school management software.
One thing’s for sure — it is getting competitive and Malaysia needs to step up its game or once again be left behind.
This article first appeared in Star Biz7 weekly edition.
