How Much Does the U.S. Spend on Edtech? No One Knows, and That’s a Problem

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The U.S. edtech industry is massive. By our estimate, startups and companies raised upward of $2.2 billion in 2020 alone. Yet, curiously, the amount districts, states and the federal government spend on these products each year is something of an unknown variable.

According to a new analysis published this week by the Edtech Evidence Exchange, a nonprofit organization based out of the University of Virginia, the total figure is also in the billions—perhaps between $26 and $41 billion a year. But that range is merely an estimate—and a conservative one at that.

The ambiguity around edtech spending is doing more harm than most people realize, says Bart Epstein, CEO of the Edtech Evidence Exchange and a research associate professor at the University of Virginia School of Education and Human Development.

“The real question isn’t, ‘How much are we spending?’” he says in an interview. “The real question is, ‘What are we getting for how much we’re spending?’”

Without transparency around edtech spending and results, schools and states can’t share their mistakes and successes. The taxpayers footing the bill for new investments can’t see how effective a product is, and the companies can’t be held accountable for the big promises they make about student progress and outcomes, which are sometimes based on poor research and shoddy claims.

Just as worrying, a district looking to purchase a new reading intervention program won’t know that, in a neighboring county, that same software is failing to move the needle on literacy rates. They also won’t know what amount and rigor of professional development and teacher training is necessary to produce the best results in districts already using the program.

“We are not collectively learning from each other,” Epstein says. “The result is everything is a one-off.”

This is perhaps more urgent now than ever, he says, since many districts went from using technology on an ad hoc basis before the pandemic to integrating it into every class and every lesson they teach. Sonja Santelises, the CEO of Baltimore City Public Schools and someone whose name was recently floated as a potential nominee for U.S. Education Secretary, recently told Epstein that in her district, maybe 30 or 40 percent of students used technology in school before last March. Now, Epstein recalls her saying, it’s 100 percent of students, and she doesn’t foresee a major reversal after the pandemic.

“It used to be that technology was important. Now it is essential,” Epstein says.

The Edtech Evidence Exchange’s estimate of edtech spending relies on research from 2019, which does not account for the new demand brought about by the pandemic. Epstein says he would not be surprised to learn that in 2020, the U.S. collectively spent $60 to $75 billion on edtech.

He may never find out how far off his prediction is, though, unless the industry changes its practices—something Epstein says would need to happen through law or regulation, since districts are not incentivized to reveal their spending and usage.

Should the federal government decide to fund research or pass legislation that would shine “a substantial amount of sunlight” on this industry, Epstein predicts that overall we might see a net increase in edtech spending. Yes, some districts would cut back on the number of licenses they have with edtech companies—perhaps paring down from the hundreds, even upwards of a thousand, edtech products the average school district is running each month. But all told, districts would likely realize that they can’t cut corners on professional development and, Epstein suspects, decide to pay up to better prepare teachers.

Quoting Yoda, Epstein says that in edtech, it is either “Do or do not. There is no try.” Yet too often school districts will spend liberally on edtech solutions only to skimp on the training necessary to use those materials as intended.

“There’s no point buying something that you aren’t going to implement properly. Too many schools think the cost of training and professional development and support are optional,” Epstein says, noting that schools will pay $125,000 for a license but decline the $25,000 training recommended with it.

“They too often think they can ‘make it work’ on their own and that companies are running up the bill by proposing that training and support,” he adds. “But if you’re going to buy a car, the tires are not optional. You’re not saving money by not having tires on your car. Everyone would benefit from a better understanding of the true cost of ownership.”

If school districts were to share their own spending and usage data, everyone—from the districts spending money on the products to the students using them—would benefit.

Maybe a thousand districts are using a math tool, he says, and each is doing different types and amounts of training with teachers to prepare them to use that tool. If those districts shared what that training looked like, how much of it they did and how it impacted student performance, they might find a “sweet spot.” Perhaps districts that did only a few hours of professional development had limited success with the product, while districts that did eight or more hours of professional development saw significant gains in students’ math scores, with diminishing returns after about 12 hours or more of training.

That’s the idea, anyway. For now, Epstein says, such sharing and openness amount to little more than a pipe dream.

“We don’t know what works, where, why and under what circumstances,” he says, exasperated. “As a result, too many schools are buying things on a hope and a prayer and finding out later that [they didn’t get] their money’s worth.”

He adds, matter-of-factly: “There is no reason to believe any of this will change soon.”

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