Leveraging Technology in Education

How technology is changing education and why businesses want to enter this industry

Last week, I went to Copenhagen for my job, which involves both teaching and working in IT. My main goals were to pick up new ideas, connect with other pros, and see how schools are using technology. I'm part of a group called The Dutch Investors, where we share what we know to stay ahead in our investment fields.

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Why technology is important in modern education

Schools are always changing, bringing new challenges for teachers. Just when you think you're up-to-date, something new pops up. It's important for teachers to keep up so they can prepare students to be smart and curious. Technology is becoming a big part of teaching, and its role is only going to grow. Not just for teachers, for kids as well, perhaps even more. Technology has connected the world in which they are growing up. Kids need to understand the technology, how to use it, its risks and usage, and so much more.

In Copenhagen, I met up with 20 people from the Northern Netherlands, including IT experts, teachers, school heads, and policymakers. We went there to see how countries like Denmark integrate technology into their schools. While most of my colleagues focused mainly on the technology side, I, as an investor, was viewing things through a different lens. I was scouting for business opportunities, identifying potential risks, and trying to gather as much information as I could. We went to a group of so-called Apple Distinguished Schools (ADS), which is already quite big in Scandinavia and spreading through Europe. These schools get to buy Apple products at a big discount, as long as the schools (mostly) use Apple devices. We also visited various STEAM facilities, where they host a plethora of technologies ranging from LEGO sets and 3D printers to laser cutters, AR and VR devices, and an array of other fascinating tech gadgets.

The appeal of the educational sector to businesses

Living in the Netherlands, I know a lot about the Dutch market. But there are lots of opportunities elsewhere that I'm excited to explore. In the Netherlands, schools must use a 'student tracking system' to handle private student information. This creates special market opportunities for companies like NEDAP, a Dutch firm that operates in niche markets and builds custom software for these systems.

Founded in 2004, NEDAP's Parnassys system is designed for (mostly) primary schools in the Netherlands. It offers great customer support and keeps adding new features from the education sector. Schools rely a lot on the Parnassys system, and since there aren't many alternatives, NEDAP, the company behind Parnassys, can gradually increase their prices. Although there are a couple of other options, switching to them is really tough, time-consuming, and costly. Plus, these alternatives aren't specifically made for primary schools, use outdated software, and don't update as often as Parnassys does.

The educational duopoly in the Netherlands

Besides software, the Dutch educational market is largely dominated by two major suppliers, Heutink and the Rolf Group, who control over 90% of it. Whether schools need textbooks, pencils, furniture, IT equipment, or any other school-related items, they typically have to go through one of these suppliers. As family-owned businesses, Heutink and the Rolf Group have significant influence over pricing. They also have the financial strength to acquire smaller, competing companies. This makes it very difficult for schools to find alternative suppliers, as the market options are limited and largely held by these two dominant players. This level of control also allows Heutink and the Rolf Group to set market conditions and prices, further solidifying their hold on the educational supplies market in the Netherlands.

What I learned from other educators and IT experts

My time in Copenhagen was eye-opening. From top-notch educational software to the latest classroom technology, integrating technology into education is changing how we teach and learn. It’s not just an improvement; it's a must-have to modernize education and make it more accessible and effective.

While the goal of education should be for kids to learn as much as possible and become thoughtful citizens, it's also a gold mine for businesses. Sure, you can have opinions about it, and yes, there are pros and cons, but it also pushes companies to do their best to have top-notch technology, which leads schools to choose their software and/or devices. My trip to Copenhagen confirmed what I experienced as a teacher. You get stuck in the education sector with expensive contracts and high switching costs. Education is innovating and changing faster than ever, and there's a lot of money for companies to make. As an investor, that's really interesting.

In my next article, "Education and Technology," I'll go deeper into how big companies like Apple and Google are investing in education. They are developing educational tools and platforms tailored to the needs of students and teachers. Through initiatives like Apple Distinguished Schools and Google’s education programs, these tech giants are setting the stage. We'll look at success stories from these programs to see how effectively technology can be integrated into education and how they will profit from it.