The needs of the global sustainable development agenda are both broad and urgent, and innovation models are central to addressing them in a timely, efficient, and scalable manner, from promoting inclusive growth to ensuring the longevity of natural resources to addressing issues across the state of the human condition.
Inclusive businesses—including large multinational corporations (MNCs), social enterprises, and impact investors—recognize that the private sector will increasingly play a lead role in solving problems and closing global sustainability gaps. Such endeavors can cost USD 3-5 trillion annually, according to some estimates,1 although the value that businesses can unlock while in the process is estimated to be in the range of USD 12-15 trillion per year.2 Ideally, thus, this suggests a macro-level business case for trying to do good while doing well.
While the macro-level business case provides a tremendous amount of evidence on the private sector’s role in addressing sustainable development challenges, a bottom-up perspective is also crucial to understanding how much technology can be a force for inclusion, or against it. To this end, researchers at Digital Planet placed a group of private enterprises that leverage digital technology to solve sustainable development challenges under a microscope, building a case study for each of them from a bottom-up perspective.
Through this case study approach, we hope to allow our audience to immerse themselves in an enterprise’s journey, answering the question of how companies in different parts of the world are taking on sustainable development challenges and closing inclusion gaps. In addition, in each case study, we employ “The Nine A’s Framework” to analyze an enterprise’s business model. This original framework is designed to provide an outside-in evaluation of a given company’s strengths and weaknesses, as well as to highlight the opportunities and challenges it faced at the time of the writing. Lastly, this compendium allows for a comparison of the enterprises’ business models, revealing several common themes and learnings that business leaders and entrepreneurs should consider for future actions.
In this second edition of the case compendium, we cover three enterprises working in the education technology (ed-tech) and upskilling industry in three distinct emerging markets. Our estimates show that the three companies can collectively unlock more than USD 10 billion in economic value in their respective markets, helping address the following United Nations Sustainable Development Goals (SDGs), including but not limited to: SDG 1, or no poverty; SDG 4, good education; SDG 5, gender equality; SDG 8, decent work and economic growth; SDG 9, industry, innovation, and infrastructure; SDG 10, reduced inequalities, and SGD 17, building partnerships for the Goals.
Below is an overview of the three enterprises in the compendium:
Andela leverages digital platforms and technologies to build a global talent network designed to match qualified engineers from emerging markets with high-quality roles at companies and organizations of their interest. Andela’s business model is unique in that it offers training and upskilling courses to the software engineers using its platform.
HENRY, short for High Earnings Not Reached Yet, works in Latin America, training full-stack software developers to work in well-paying software and tech jobs around the world. HENRY aims to democratize access to careers in tech and close socioeconomic gaps in Latin America.
Noon Academy is a self-professed “social learning platform” which aims to make massive open online courses (MOOCs) fun, engaging, and self-paced.
Looking across the three cases, some insights and learnings which emerged are:
The rapid development of artificial intelligence (AI) and automation technology is projected to permanently alter the labor market. In 2021, roughly 40% of people expected their job and daily tasks to become obsolete within the next five years due to technological advances.3 However, our research indicates that AI will serve to increase firm productivity, reduce production costs,4 and increase wages5 by complementing current jobs rather than replacing them.6 But these benefits cannot be unlocked unless workers undergo additional training that leaves them adequately prepared to implement AI as part of their daily tasks. A World Economic Forum study concluded that 54% of employees would need upskilling by 2022 due to automation and AI adoption.7
As global AI adoption and implementation expands, we anticipate that the demand for AI upskilling services will rise at a comparable rate. Highly-skilled, highly-paid workers, like the future STEM professionals targeted by Andela ad HENRY,8 are projected to be the most impacted by AI adoption.9 Tech-focused companies like Amazon, Accenture,10 Microsoft,11 and Google12 are already equipping their employees with the appropriate training to acquire the everchanging skills necessary to excel in AI-aided jobs.13 Ed-tech startups such as Andela, HENRY, and Noon can serve as the catalysts capable of turning this digital disruption into opportunities for growth. For corporate clients, they can provide the tools necessary to train employees to use AI to its fullest extent. For jobseekers, upskilling services can provide the training needed to future proof candidates and stay ahead of the changes in skills required due to AI adoption.
In 2022, women made up 29% of the tech labor force. Gender disparity in the industry begins long before women consider a career in STEM and continues throughout their professional development. Ed-tech startups could act as disruptors to this insular, disproportionately male talent pool by increasing women’s early exposure to tech, facilitating women’s career mobility in the tech industry, and empowering women to acquire the skills needed to make them competitive by tech industry standards.
Firstly, women’s lack of exposure to the tech field at an early age is reflected in the overwhelmingly male participation rate in high school STEM classes and, later in life, computing degree acquisition. In light of these inherently biased environments, the widespread adoption of ed-tech could open a channel for girls to explore tech independently. Freemium platforms like Noon have user-friendly, interactive interfaces that make academic exploration a pastime rather than a laborious task, making them particularly appealing to younger audiences.
Secondly, opportunities for women to transition into the tech industry remain scarce. Tech companies could increase women’s participation by using ed-tech to onboard young professionals. Noon and HENRY, for example, offer educational services in a format capable of complementing full-time jobs. Their flexibility concerning time and length of interaction can equip women with the skills necessary to pivot into the tech sphere later in their careers.
Lastly, women in tech often bear the brunt of sudden shifts in industry standards. For example, women are more likely than men to lose their jobs as a result of AI and automation tech adoption. The use of ed-tech for reskilling and upskilling is therefore doubly important in regard to women’s roles in the tech sector. Online educational tools empower women to adapt their skills to the reality of the present and acquire new ones to excel in the modern workplace.
Although there is a growing number of tech professionals in developing regions like Latin America and Africa, the tech industry, especially in developed economies like the US, is finding it difficult to recruit tech talent. Employment in the tech sector has mostly stagnated, despite the increased demand, and tech companies have started outsourcing a lot of their work to other countries.
In light of this, startups like Andela and HENRY fulfill a significant gap by leveraging digital platforms and technologies to provide fully remote, low-cost tech education in the form of courses and mentorship programs to interested individuals across the Global South. Andela’s business model also works to bridge the demand-supply gap by matching tech talent with organizations.
While there are challenges to remote learning, educators, school psychologists, and students alike have begun to reap the benefits of remote learning. Research shows that students are more likely to be better learners when they have more academic choices, both with respect to the content and materials, as well as extra-curricular activities. In fact, remote learning allows students to pursue their other interests with more freedom and flexibility, enabling them to focus better on topics and activities that interest and benefit them. Further, self-paced courses can give students more autonomy and control, improving their motivation to learn and their ability to absorb information. A study conducted during the peak of the COVID-19 pandemic showed that flexibility in learning with respect to time schedules and methods proved beneficial to many learners.
Andela and Noon Academy, as studied here, offer remote, self-paced courses to interested students, which has been crucial for their success. Noon Academy, for instance, places student groups at the center of the learning experience, empowering them to learn from each other as well as from the professionals it recruits to teach and train the students. The Andela Learning Community offers MOOCs on a variety of topics that allow students to interact with each other, as well as mentorship programs, which allow for peer-to-peer knowledge sharing.
Many potential beneficiaries of education technology cannot access services like Andela, HENRY, or Noon Academy because they do not have the tools needed to take advantage of them. Some startups like Andela attempt to address this issue by providing direct assistance to users, in such forms as laptops or supplemental income. In the Middle East and North Africa, where internet-connected devices are widely used and readily available, online learning platforms like Noon Academy present viable solutions for remote instruction. User opinions and behaviors in this region reflect a belief that the internet will play a vital role in future modes of academic and professional education. In other areas like Latin America, ed-tech startups like HENRY are working to realize high-earning potential in workers whose uneven access to crucial technology leads to fewer desirable job opportunities. In this region, unstable governments, volatile markets, and high unemployment rates push millions into poverty, which worsened during the COVID-19 pandemic.
The pandemic accelerated digital growth, but it also exposed acute digital inequalities across the globe. As most major economies contracted in response to COVID-19, significant wealth gaps and weak digital infrastructure stymied adoption of new technology even as many operations shifted online. The pandemic rapidly altered the workplace and the classroom, but challenges to hardware affordability, internet access, and digital literacy persist. Ed-tech services are poised to meet the growing need for online learning and remote work. But governments must first meet the needs of groups who face barriers to using them—notably women, rural residents, and low-income families. To ensure equal access to education technology regardless of gender, geographic location, or socioeconomic status, lawmakers should start by investing in high-speed internet.
Startups in the ed-tech and upskilling industry often operate across multiple jurisdictions, making them subject to a broad set of rules and regulations. When matching a qualified engineer to a remote role, for example, Andela must consider taxation and other regulatory requirements of its own country, the client firm’s country, and the contractor’s country. Such compliance challenges compound the costs and uncertainty surrounding outsourcing work, which may give investors pause when considering the profitability of Andela’s business model. Similarly, investors question the increasing costs associated with consumer protection, citing tightening restrictions on data privacy and greater customer appetite for security features. In addition to matters of licensing and security, ed-tech entrepreneurs must also consider differing legal and cultural perceptions of intellectual property. Such discrepancies complicate companies’ plans to ensure the integrity of their systems when serving customers in multiple countries.
Ed-tech startups face cultural as well as financial barriers to success. Entrepreneurs across the industry convey their struggle to establish the value of education technology, highlighting the skepticism of government officials, investors, educators, and parents as one barrier to growth. In Latin America, for example, access to capital is limited by investors who point to a lack of digitalization and adequate infrastructure in the region as the primary constraint. Limited interest from private entities, combined with unfeasible grant criteria from government and philanthropic investors, leaves startups like HENRY with few options for funding. In the Middle East and North Africa, however, investors are betting on projections of significant ed-tech growth, with deals in the education sector jumping from 4 in 2016 to 29 in 2019. Significant government investments in tech startups and digital infrastructure, coupled with robust startup advisory and guidance ecosystems, pave the road to success for Noon Academy and other ed-tech startups in the region.