My thoughts about the DfE’s new £4.6m EdTech Innovation Fund

A few weeks ago I attended the BESA event to explain the new DfE Edtech strategy. So popular was the announcement, BESA had to find a new venue. Ironically the same venue as my first-ever meeting, almost 20 years ago, when I was working for what was then called the Department for Education and Skills (DfES).

My topline notes from the event were:

How UK businesses are the key to the success of both the edtech plans of the DfE as well as the Industrial Strategy and that of the government, more precisely the Department for Business Energy and Industrial Strategy (BEIS).

A new £4.6m Edtech Innovation Fund, a partnership between DfE and NESTA, with up to £100k for 20 organisations ‘to improve, evaluate and grow the reach of digital education tools’ in four areas:

1. Formative Assessment
2. Essay Marking
3. Parental Engagement
4. Timetabling

 

These relate to DfE’s five themed ‘partnership’ EdTeach Challenges (which also have 10 subsidiary ‘Challenges’):

1. Administration
2. Assessment
3. Teaching Practice
4. CPD
5. Learning throughout Life

 

Timing: The EdTeach Innovation Fund grants are:

• Information webinars (June)
• Shortlist development, calls and final application forms (July)
• Final applications due (August)
• Grants awarded (Sept./October)

 

This might give both NESTA and DfE time to refine their goals which sadly seem modelled on the EU’s H2020 edtech funding initiative that has seen about  €500m of taxpayers’ money almost totally wasted (if you disagree let me know the successes because as a former H2020 expert I never saw a single winning bid that I would have put £1 of my own money into).  

My reflections

To a small degree the government is again recognising that edtech has a role to play in supporting and building capacity within the UK education sector and as a potential driver of exports. This is a bit Groundhog Day as those pitching it seem to have no collective memory of the millions spent by DfE’s predecessors on programs like E-Learning Credits, Laptops for Teachers or the significant amounts spent funding projects like BBCjam (via BBC and DCMS) or quangos like BECTA.

Similarly, the enthusiasm shown by just one Minister (Damien Hinds) should be viewed within the prism of the very short and ineffective tenures of most recent Secretaries of State for Education (Nicky Morgan, Justine Greening, et al)  along with the overlapping remits of the various subsidiary education Ministers that include Nick Gibb, Anne Milton, Lord Agnew, Chris Skidmore and Nadhim Zahawi.

Articulation and engagement: that the DfE is trying to work with BESA more closely is a good thing, perhaps less so when it comes to NESTA, who after existing for 20 years seem to want to recreate all the evidence and research about edtech of the last 30 years because no-one specifically told them (or rather paid them) to do it.

It also brought to the gaze of the edtech community a few of the hitherto anonymous people whose remit relates to edtech, these are:
DfE – Deborah McCann, Head of Edtech & Jen Halmshaw, Head of Edtech Delivery
Department for Business, Energy & Industrial Strategy (BEIS) – Dr Rania Leontardi Director, Business Growth and Rowland Tan of the British Business Bank
NESTA – Joysy John, Director of Education and Nancy Wilkinson, Program Manager for Education relates to edtech.

The key weakness with the current plan is that it would be better to map the strengths and gaps in the use of existing edtech products in the themed areas by UK schools and then focus funding on innovation in the gaps. This would both help existing players improve their offerings, interoperability and data (specifically by mandating open data APIs for research) as well as possibly seed new companies. There may be some griping about state subsidies etc, but I doubt these would be a substantive barrier to a wider programme that is in theory as much about building the business capacity of UK edtech companies as it is in improving digital education tools. (The two are not necessarily correlated as for many institutions while improving procurement may seem to mandate using better quality products, the reality is that for most the opportunity cost and complexity of this best-of-breed approach is nullified by the opportunity cost of managing the implementation of products and services from multiple vendors).

BESA (hurrah!), DfE (insincere grin) & the rest (bah humbug)

Caroline Wright and her BESA team put on an excellent event and did exactly what most of their members (or at least those in the edtech bit) have been wanting to see. Less impressive but at least welcome was DfE allocating £4.6m to the EdTech Innovation Fund. This is less than a statistical rounding error in their £80bn+ budget and at best about 1% of the £470m BESA thinks schools spent this year on edtech (a figure I think will crash to <£400m in 2020 as schools scramble to fund the increase in teacher pensions from 14% to an astounding 24%).

NESTA looked foolish when challenged on why they hadn’t done a meta-analysis of the last 30 years of UK and international research into edtech. The answer was what can only be described as ‘terminological inexactitude’. What I really wanted to know was why, out of £4.6m, was a maximum of only £2m going to fund EdTech Innovation grants? That means NESTA is keeping 56% for administration and running their ‘Innovation Testbed’. This seems overly generous and disconnected given that BESA already run LearnED and other direct-to-school initiatives, which these 20 funded pilots could be plugged into? Frankly, I think NESTA have failed to take a proactive lead in edtech research and innovation and are poorly placed and being overly generously remunerated to lead this project. What would be better would be if NESTA did a meta analysis study of existing research and also worked from the ground up with educators, something researchED has been doing for several years.

Least impressive were BEIS and their subsidiary the British Business Bank. I thought Dr Leontardi’s talk must have been written by the former screenwriters of Yes Minister. To me it was nothing but a collection of waffle stitched together with emollient phrases that added up to precisely nothing. Such vacuity may be admired in Whitehall, but holds no value in the real world of education, edtech or those involved in the business of both.

She was also badly briefed when caught flat-footed by a question from the audience, where a representative of a tutoring company asked why, if BEIS wanted to help UK edtech, were her Department threatening online tutoring agencies with criminal prosecution for allegedly breaching an arcane part of a 1973 labour law? Dr Leontardi at least admitted she knew nothing about it, but simply promised to ‘look into it’, but presumably not necessarily act or do anything about, ironic given BEIS has recently been picketed by the staff of an agency contracted to clean their offices who claim they haven’t been paid and have had to rely on food banks.

Least impressive was Rowland Tan of the British Business Bank whose slides claimed they have supported 32 edtech companies, but could only name Hopster, an edutainment app whose substantive investors are actually Sandbox & Co. and Sony Pictures Television Network. The BBB’s actual involvement looks to be limited to providing general 3rd party funding to Newable (formerly GLE) and Angel CoFund who did the actual investing in Hopster. Perhaps had he been better briefed he could have also pointed to Wonky Star Ltd, owners of Night Zookeeper where I was the first investor; instead he gave an unsolicited lecture on the difference between equity and debt to an audience who obviously knew far more about it, and its relevance to edtech, than Mr Tan ever will.

Investors

Much was made of MindCET, the Israeli edtech innovation centre. I love MindCET and have been to lots of their events. In January, as part of the activities of their UK & Israel Edtech Taskforce, they announced High Grade Ventures their JV investment fund created with matched funding from London-based Arie Capital.

Investors featured in a small way with Nic Newman (Emerge) and Joseph Mishon (Founders Factory)  appearing on a panel that was supposed to be about incubators, but drifted far and wide. While Emerge has developed into a the most significant edtech incubator in the UK there was no discourse about why they have fundamentally changed their business model or why major UK education companies like Pearson have at times outsourced their investing in edtech startups (initially through Revolution Learning, now better known as Learn Capital) and why they have started and closed their own incubator programmes and recently put another $50m into a new fund to invest in external edtech startups.

Similarly, neither the DfE, NESTA nor BEIS seem to have even considered involving private sector investors either along the lines of High Grade Ventures or even as some form of EIS/SEIS VCT. That’s a shame as if anything actually comes out of the EdTech Innovation Fund, it will almost certainly need the support of private and possibly (at a later stage) institutional funds. This oversight says a lot about the bodies involved and their lack of deeper strategic understanding of the edtech ecosystem, something they could rectify by allocating either some of the existing £4.6m (say 20% of NESTA’s £2.6m) to seed the fund in partnership with a consortia funded by the British Business Bank? It’s sure to upset those who seem unable or unwilling to reconcile the notion of profit with education, but in the long-term absolutely essential for UK edtech.

Summary

Congratulations to BESA, DfE, NESTA, BEIS in descending order. I remain optimistic that some good will come out of the EdTech Innovation Fund but only if wiser counsel can convince the key players to slightly refocus on where and how they invest this £4.6m.