Digital Education: From Stop-Gap Measure to Innovation

The school bell’s about to ring, but likely not how any of us want it. I had a call with my nine-year-old son’s school recently and the message was clear: currently, it would be less complex for a novice like me to write code for a new educational app than to account for all the complexities that a safe school reopening this fall requires.

As we’ve known since the beginning of COVID-19, at a baseline level the U.S. needs a combination of effective and readily available testing, test results consistently within 24–48 hours, contact tracing, and stringent quarantine protocols. Unfortunately, that remains unlikely to happen any time soon on a national level (probably a local level too), to the continued detriment of students, parents, teachers, and the economy alike.

COVID leaves a digital mark on school
As a strategist, a portfolio manager, and a realist, I know that from crisis and hardship often comes adaptation and innovation. Extrapolating beyond my most important role as Dad, I’m trying to think ahead to what these complexities mean for education. And one big conclusion is that this era will likely leave a permanent digital imprint on education much sooner than anticipated and at every level, from pre-k to, higher education and vocational schools.

Pre-COVID, education and technology were always converging, but now their intersection is exponentially tighter. We’ve been taking dutiful notes at Global X, most recently in the form of EDUT. The ETF offers exposure to companies that seek to facilitate online learning, as well as enterprise video and communication platforms.

Educational technology is not a new theme; tech set its sights on education long before school became virtual. But the steady wave of pandemic-induced demand has advancements in technologies, notably the cloud and apps, now happening at warp speed.1 I expect companies that provide the infrastructure for all types of digital education to continue to research, devise and revise to meet the needs of for-profit and non-profit education entities. For the immediate term, third-party technology solutions remain vital for students of all ages to continue their education outside the classroom.

Orienting tech for a healthy education
Admittedly, the digital education concept is a little tough for a Gen Xer like me to wrap my head around. There is some sadness in knowing that my son will potentially miss out on almost two years of in person school. I worry about what it means for kids missing the social interaction and friendships that come with a regular school day because learning goes beyond reading, writing and math.

But for many Gen Zers, digital education is likely much more logical, maybe even matter of fact. Technology is what they know. Gen Zers live in a world where video games aren’t just stay-at-home entertainment and social hour. Video games can be a legitimate career choice, not to mention an investment vehicle, like Global X’s HERO. They can also be part of their health care. In June, the U.S. Food and Drug Administration (FDA) approved a video game as a clinical treatment for the first time ever.2 Kids aged 8–12 with attention deficit hyperactivity disorder (ADHD) can now be prescribed EndeavorRX to help increase their focus skills.

Still, kids need to learn from each other by being with each other. And school remains a pretty good place to do that, in my view. Containing such a communicable virus to make any place of communal gathering, like a school, is not at all straightforward. No country has the perfect plan; however, South Korea has been able to base its response around tech, using digital maps to help people follow the virus’ spread, robust digital contact tracing, and wearable tech to monitor people in quarantine.3 Having one of the world’s fastest broadband and wireless networks and a small geographical footprint certainly helps.

Could such a marriage between healthcare and technology like that ever work in the U.S.? Among other challenges, privacy laws would make implementation problematic. But perhaps there are lessons to be learned so that the country can start to pull in the same direction and get kids back in the classroom.

Long-term hope: The best of both worlds
Undoubtedly, COVID-19 has been a hard lesson for the U.S. and its school systems. The abrupt transition to distance learning will remain a challenge this fall, especially for those students lacking sufficient online access at home. But I expect the short-term disruption to eventually give way to positive long-term benefits. The digital learning market is likely too far down the path to not become an education staple from here.

As multifaceted as advanced digital learning can be, though I don’t think that it can ever truly replicate the benefits of a traditional school setting—especially for this generation of students. There’s just too much to learn about life and relationships beyond a screen. So fingers crossed that one day soon we get school doors open and the best of both in-person and digital learning working together for students at every level.

Related ETF
EDUT: The Global X Education ETF seeks to invest in companies providing products and services that facilitate education, including online learning and publishing educational content, as well as those involved in early childhood education, higher education, and professional education.

HERO: The Global X Video Games & Esports ETF seeks to invest in companies that develop or publish video games, facilitate the streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality.