Online Vocational Training: The Future of Education
Executive Summary:
Online vocational training is emerging as a pivotal component in the evolution of higher education. Its significance is underpinned by the rapidly expanding market size, the diversity of courses offered, and its role in addressing the mismatch between traditional university education and job market demands.
Importantly, categories of education offered online are continuously evolving to match unmet needs and increase the popularity and utilization of these resources. Specifically:
Key categories in online vocational education include STEM and non-STEM courses. STEM courses, which accounted for over 77% of the global industry revenue in 2021, cover subjects like engineering, technology, and mathematics.
Non-STEM courses, expected to register the highest growth rate, span a broad spectrum, including finance, accounting, fashion, and management.
Vocational fields like plumbing, electrician, welding, and HVAC often require apprenticeships or practical sessions, ensuring hands-on experience alongside online instruction.
Mismatch Between University Education and Job Market:
There's a growing realization that factors other than college education, including relationships, internships and previous experience, significantly influence employability. Despite efforts to provide transparency in higher education outcomes, there's considerable variation in students' experiences, influenced by their choice of major, school and timing.
Further, the relation between major and employment field is not directly correlated. In STEM fields, in particular, a significant number of graduates do not secure jobs in their study area, challenging the notion that a STEM degree guarantees job security.
When combined with the increasingly burdensome cost of college, the value of online education becomes even more clear. In the U.S. alone, total student loan debt stands at $1.75 trillion, with an average debt of $28,950 per borrower.
A majority of students from both public and private four-year institutions graduate with education debt, underscoring the financial strain of traditional college education.
Market Size and Growth Rates:
With the increase in offerings and market dynamics outlined above, the recent growth and continued outlook for the online education sector is exciting both in the U.S. and globally.
The global technical and vocational education market, valued at USD 622.4 billion in 2021, is projected to grow at a CAGR of 9.8% from 2022 to 2030.
In Europe, the e-learning market reached US$ 67.9 Billion in 2022, with expectations to grow to US$ 136.9 Billion by 2028, indicating a CAGR of 12.2% during 2023-2028.
These statistics reflect a growing recognition of online vocational training's ability to keep pace with technological advancements and offer skill-based learning.
Outlook:
Online vocational training represents a critical shift in the higher education landscape. Its robust growth, diverse course offerings, and practical orientation position it as a viable alternative to traditional university education, which increasingly fails to align with job market needs and imposes significant financial burdens. This shift is not just a trend but a necessary evolution in education, providing accessible, skill-focused, and financially sustainable options for learners worldwide.
As the offerings and subjects continue to evolve, we expect to see specialized newcomers to the space capture market share, and established players (like Chegg) continue to evolve their offerings as well, making for a potentially dynamic market poised for consolidation and other M&A activity.
Online vocational education is not just a sector experiencing substantial growth; it represents a fundamental transformation in how we approach education and career preparation, one that is more aligned with the evolving demands of the global job market.