By Tasha Seitz and Brandon Boros
As active impact investors, we’ve had the privilege of meeting hundreds of entrepreneurs doing incredible work across each of our four areas of focus: education, health, economic empowerment and resource efficiency. We’ve learned a lot about what opportunities exist to leverage technology for good and how various companies are solving these problems. As we celebrate our five year anniversary, we thought it would be valuable to share some of our observations with the broader impact investing field.
Part 3 of this series provides insights into current trends we’ve seen in the education sector, the main drivers of those trends, and opportunities we see for impact.
Teacher Empowerment & Personalized Learning
Not long ago, a common solution to the problem of having a class with students’ proficiencies at different grade levels was simple, but ineffective. If a third of the class is performing above grade level, a third at grade level and a third below grade level, the most measured approach was to teach to the middle. While striking a seemingly fair balance, it effectively eliminated the attention of two-thirds of the class who thought it was moving either too quickly or too slowly, resulting in only one third of the class growing and learning. As technology has proliferated in classrooms across the country (almost half of classrooms use a digital device every day), teachers now have the increased ability to meet each student at current level of learning and help them grow from there. At the same time, there is increasing emphasis on accountability in education and focus on student growth.
Delivering personalized learning is a challenge, though. Nationwide two-thirds of students are still reading below grade level. Technology is not a silver bullet, but technology products can help teachers meet students where they’re at more efficiently and effectively. We are most excited about ed tech solutions that empower teachers rather than replace them, enabling them to personalize instruction in ways that maintain and enhance students’ engagement with educators and with each other.
ThinkCERCA, one of our portfolio companies, provides a personalized literacy platform that helps students develop and hone their critical thinking skills. Teachers can customize standards-aligned lessons, that fit into their current curriculum, based on each student’s level of literacy. Students read passages appropriate to their reading level and then practice a framework of developing an evidence-based argument in response to a debatable question. The personalized lessons increase student engagement and allow the teacher to provide more specific feedback to individual students. In a study of 102 schools, ThinkCERCA students grew, on average, an additional two years when compared to NWEA grade level norms. Leveraging a blended style of learning through platforms like ThinkCERCA empowers teachers to drive accelerated learning and improve student outcomes.
We also invested earlier this year in BookNook, which enables structured engagements with early readers and a scaffolded instructional approach to building foundational reading skills for students in grades K-5. We’re excited about the company’s potential to accelerate growth in reading skills through technology-supported interactions with students.
Accountability for student outcomes at post-secondary institutions is growing as well, leading to concerns regarding student persistence. Nearly half of all students who go to college drop out. Among minorities, the rate is even higher, with over two-thirds dropping out. This phenomenon has wide reaching economic implications and is doubly hurtful to students who drop out and incur debt but do not have the benefits of a degree. In Q2 2017 median weekly earnings for those with a bachelor’s degree was 66% higher than those with a high school degree. Students who drop out of college earn significantly less than those who graduate and will have to contribute a greater percentage of their earnings to paying down their student loans. Increasing persistence contributes meaningfully to an individual’s potential earnings premium. A 2006 study by the Federal Reserve Bank of Chicago concluded that for each additional year of schooling completed, an individual’s earnings increased by 11%.
We invested last year in a company addressing this challenge, ReUp Education. The company partners with universities to re-enroll students who have dropped out and provide them with coaches to support them through graduation. ReUp utilizes a blend of technology and human coaching to pinpoint each student’s barriers to graduating and connects them with resources to help them overcome those barriers.
An interconnected global economy and the exponential rate of technological change have made it abundantly clear that education needs to be conducted along a continuum of lifelong learning. We see significant opportunity for impact as universities work to better prepare students for 21st century careers. Likewise, companies have identified the skills gap as a key challenge for business and have prioritized re-skilling and upskilling employees to keep their career trajectory on an upward path. We’re actively seeking companies that can utilize technology to address this issue at scale.
We wrote in earlier blog post on economic empowerment about our investment in Viridis, which aims to connect community colleges, their students and graduates, and employers. By closing the loop with employers, Viridis enables community colleges to tailor their course offerings to the local market for job opportunities and share pathways to employment with students. As students pursue these pathways, their progress is kept in an online “Skills Passport” that is visible to the students, college advisors and potential employers. Students can take their Skills Passport with them throughout their career and build upon their validated set of credentials as they gain new skills and certifications. Ultimately, Viridis improves job opportunities and economic mobility for community college graduates, who are disproportionately lower income and minority and often have non-traditional backgrounds (veterans, part time students, mid-career switchers).
Lifelong learning also enables those who have stumbled the opportunity to reach up. We are proud to be an investor in Edovo, which provides an educational platform with over 10,000 hours of educational, vocational, and treatment programming to inmates, during and post-incarceration. In the US, roughly 40% of inmates will return to prison within three years of their release date. A study published by RAND found that inmates that participate in education programs are 43% less likely to recidivate and up to 28% more likely to secure employment post-release.
We are excited to see the edtech landscape continue to evolve, and we welcome your thoughts. Join us next month for the final part of our Impact Tech Opportunity series.
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