While educators are debating the risks and opportunities of generative AI as a learning tool, some edtech companies are leveraging AI to increase revenue and reduce costs.
Contrary to the notion that generative AI is disrupting education, Morgan Stanley believes that the latest AI technologies can ultimately improve access to education and improve quality.
EdTech companies are getting opportunities from generative AI that the market may have missed.
Generative AI will bring $200 billion in value to the global education industry by 2025.
By 2025, reskilling and retraining alone could require $6 billion in investment, and edtech companies are poised to meet this demand.
Among educators, the associated enthusiasm for the potential benefits of generative AI has been overshadowed by concerns about the misuse of the technology. Some school systems have even banned the use of generative AI chatbots due to concerns about plagiarism and misinformation. Others believe that the use of technology is inevitable, and these educators encourage their students to become proficient in the new technology.
It's important to note that the term "generative AI" in this research report refers to unsupervised or semi-supervised machine learning algorithms that can create new content using existing text, images, audio, or **.
The confusion surrounding the ultimate impact of generative AI in education has cast a shadow over edtech companies and the education industry as a whole, with heightened concerns about the growth of generative AI users. However, Morgan Stanley research analysts believe that the market is a bit too negative in the debate about generative AI, while many people ignore the potential of the technology to improve learning efficiency at all levels. Improving the quality of education and helping a lot of people gain access to education is positive for the edtech industry in the long run.
Brenda Duverce, an analyst at Morgan Stanley's sustainability research team, said, "Generative AI can actually improve the overall learning experience by reducing administrative work, maximizing human interaction, and retraining or learning new skills for people whose jobs are affected by the technology." "By 2025, these efforts and increased efficiencies will bring $200 billion in value to the global education industry, which will ultimately result in higher revenues and lower costs for edtech companies. ”
The core competency of generative AI – creating and disseminating information – makes this technology logical in the field of education. First, generative AI can increase productivity and allow people to spend more time on more valuable activities: for example, teachers can use chatbot tools to review and revise, grade exams, check content for accuracy and plagiarism, or prepare coursework to free up more time to engage with students.
In addition, teachers can use generative AI to tailor lessons and performance assessments to meet the needs of individual students for a more personalized learning experience. At the same time, generative AI's virtual assistants can help reduce labor costs by automating some administrative tasks, such as registration, onboarding, course scheduling, and payments, among others.
Over time, generative AI can help parsing K-12, higher education, and companies that provide corporate learning and development access to vast amounts of data, and help these institutions make more informed decisions about program development, hiring, and more, as well as fine-tune the services they provide.
Morgan Stanley analyst Duverce said, "Among education companies, those that are most capable of generating returns have started to roll out some AI products and features to customers." Those that develop unique products and stand out with innovation should do well in the long run. ”
Morgan Stanley Research estimates that current generative AI technology could impact a quarter of today's occupations, rising to 44 percent within three years. But in the long run, fears that large numbers of workers will lose their jobs or become permanently unemployed may be unfounded.
Educational institutions may find themselves in a unique position to meet the growing need to retrain employees displaced by technological advancements, including helping them learn the skills needed to use or develop generative AI.
Analysts estimate that over the next three years, assuming that about 6% of affected employees will need to relearn new skills and retrain, the replacement of employees by generative AI represents a $16 billion market opportunity.
Duverce, an analyst at Morgan Stanley, said: "History tells us that major changes in the technology paradigm are often accompanied by periods of disruption in economic growth and net job creation, which is contrary to the current market debate that jobs will be reduced as AI is created." ”
Author |BT Finance.