The current global pandemic has brought many industries to its knees. We haven’t experienced a seismic shift in our daily lives like this since the Second World War. The impact has been, and will continue to be, great. However, we must look ahead to ensure our futures are not impacted further by this deadly challenge.
It is this motivation which is now driving the European and American investment communities. The focus has historically been making the highest financial return as quickly as possible, but this outlook has rightly started to change.
In spite of the billions invested across the world in the latest and greatest innovations, technology hasn’t been able to stop or impact the spread of COVID-19 on any notable scale, something embarrassing to us all.
As a result, investors broadly have decided to support the industries and tech where significantly less funding had been placed historically. As an example, we at Perlego have received five times more approaches from new venture capitalists (VCs) and angels since the lockdown.
I believe this is for one of two reasons: they either want to help a future society or they’ve seen failures in the likes of medicine, education and ecotech at this time and see these as the new fintechs in the years to come.
Regardless of the reason, what is essential is to place more focus on the sectors that were previously seen as poor relations to their shiny counterparts. Investment, growth and the opportunity to succeed must be further developed; such is the necessity for innovation on a global scale. It’s sad that it has taken a global crisis to trigger this thinking.
I run Perlego, a platform that provides access to textbooks and content online. When we previously raised a round, I hid the fact that we’re an “edtech” company because of the stigma from investors who had seen previous sector failures and subsequently weren’t interested. It is little surprising then that education technology received just $16.3 billion (€14.6 billion) in 2018, not even 15% that was invested in fintech.
Medtech similarly has struggled. There are large firms that most people have heard of - such as Babylon and Thirva - but the majority face similar issues of being in a highly-regulated market, which in VC and angels’ minds narrows the opportunity for growth and therefore the returns.
These industries need to help their newer entrants. No one is denying that the barrier to entry must be incredibly high. These innovations must be thoroughly tested to guarantee their positive impact but more must be done to invite change.
In 2017, just 7.2% of healthcare expenditure was invested in medical technology, according to MedTech Europe. For edtech, it’s even less, says Credit Suisse, with just 2 to 3% of the $5 trillion (€4.4 trillion) spent globally on education being on digital resources.
Here in the UK, a disappointingly small amount of support comes from the government’s Department for Education to elicit these badly-needed changes. Just 5% of their budget on stimulating edtech, showcasing it as a true opportunity, would make all the difference.
And the need is apparent. Across Europe, there are over 20 million students in tertiary education. Every single student has suffered due to the lack of digital infrastructure in place to allow remote learning, negatively impacting their learning opportunities which could impact future generations.
I believe the challenges faced by us all have brought society closer together, which hopefully can be a silver lining in the aftermath of this tragedy. We must continue to work together to make a difference, which starts with providing the resources needed to flourish in the future.
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