Professional Documents
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The digital and new media industries in the Sheffield region are growing at a
faster rate than anywhere else in the UK in terms of specialist companies and
new jobs. This is due in no small part to the significant cluster of e-learning
businesses in the city which have made Sheffield the UK centre for such
activity. The city is home to one of the largest applied e-learning services
organisations in the world; Ufi learndirect, as well as a breadth of companies
covering the full spectrum of e-learning solutions and online information
services.
James Wilson
Investment Manager
Creativesheffield
Our knowledge base contains over 400 papers offering insights & advice on
how to utilise e-learning & learning technologies. We have undertaken a
Systematic Literature Review of the available papers on the effective use of e-
learning, in conjunction with the University of Sheffield.
Learning Light works closely with both the University of Leeds & Sheffield, our
most recent joint publication is: “The Use of e-Learning in the Workplace: A
Systematic Literature Review” by Maggie McPherson, School of Education,
University of Leeds, Miguel Baptista Nunes, Department of Information
Studies, University of Sheffield and David Patterson, Learning Light.
David Patterson
The opinions and analysis put forward in this report are those of the authors
alone.
The Report has since become our mostly frequently visited and downloaded
resource but the rapid rate of change in our industry means we need to be
able to respond to the increasing requests for advice and information received
by Learning Light with a new, comprehensive Report.
The focus of the new report is similar to that in 2006, but we have necessarily
updated the content to reflect the changes and trends within both the industry
and the UK marketplace. We also include Appendices including the latest
CIPD survey of e-learning and pundits’ prophecies for 2009 and beyond some
comments on the accuracy (or otherwise) of earlier prophecies. We
particularly seek to offer positive suggestions for both commercial
opportunities and for how e-learning can deliver rapid ROI and performance
improvements to organisations and communities in these turbulent times.
In addition to our own experience and expertise within Learning Light we’ve
drawn on independent sources, including:
o Seb Schmoller, Bersin, Learning Leadership,, David Wilson at
Elearnity.
o BECTA, e-skills, Towards Maturity, DCKTN and The Digital Britain
2009 Strategy, industry SIGs and research bodies
o Training Outsourcing Inc., UK industry leaders and niche players)
o Game Based Learning (GBL) practitioners
Our goal has been to provide both suppliers and purchasers with an
understanding of what’s possible, what’s available and where e-learning
services and products are going. We also comment on the convergence of
technologies and design techniques for business, entertainment, gaming,
learning and assessment. Finally, we include some analysis of public sector
procurement patterns derived from the Learning Light Market Intelligence and
Tender Information Service.
It is from this that we put forward our proposition that the UK e-learning and
learning technology industry is indeed flowering!
We spend the next sections setting out the evidence that we believe
underpins this proposition.
This report began as a simple attempt to update the report written by John
Helmer on behalf of Learning Light valuing the UK e-learning industry. It is
from this original report that our analysis begins, but one we have significantly
developed by both interviewing a number of leading players (vendors) in the
industry to ask their view of the market and by further seeking to quantify the
market size.
However, we begin by updating John Helmer’s work with “what is going on” in
the industry and draw some historical comparisons with other reports, such as
Epic’s market report.
We have drawn on our own financial modeling, the on-going and valuable
work of John Helmer and other research made available to us to assess the
size of the market. In truth we can now offer a “tri –angulation” of what we
believe the market size to be and the likely growth potential.
The financial modeling and third party research all correlated in a robustly
positive trend of continued and significant growth for the UK e-learning
industry. The market size estimates varying between £300 million to £450
million, and growth rates forecast of between 6.7% and 8%.
The UK e-learning Market © Learning Light Limited 2009
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Finally we present a set of trends, both technologies and market drivers which
we believe will underpin this growth, again based on our interviews with the
companies, and other research and opinion gathered.
Our premise being that this industry “flowering” is based not just on organic
growth as more and more companies seek to utilize e-learning and learning
technologies – though we do highlight that training companies (sometimes a
little unfairly seen as the enemy of e-learning in the UK!) and more medium
sized enterprises are adopting e-learning, but that there are other factors are
at work.
This is illustrated in how the UK’s e-learning industry has adopted gaming
and immersive learning scenarios, rapid development tools and is perhaps
more expert in its adoption of Web 2.0 and Social networking than the IT
industry and is on the cusp of delivering true “portable flexible learning” – or
as we search for another cool term - m.learning 2.0!
It is the fascination of both the learning and development community and the
marketeers particularly with social networking that bodes so well for the
e-learning industry.
What is e-learning? There are many terms and definitions applied to this
particular genre of learning. We have used e-learning and learning
technologies as our principle terms of descriptive reference.
In attempting to answer this we have turned to Michael Allen and his work
“Creating Successful e-learning” (Pfeifer 2006) as a starting point.
“The term e-learning applies to the broad range of ways computing and
communication technologies can be used for teaching and learning.”
He does add –
And secondly, in the view of the reports authors, and in the light of the
interviews undertaken with twenty plus e-learning companies we feel that
The UK e-learning Market © Learning Light Limited 2009
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below we illustrate how e-learning is evolving – indeed flowering.
This model seeks to build and illustrate for the purposes of this report the
whole fragrant flower that e-learning and learning technologies is.
How e-learning is
flowering
(Based Michael Allen’s model)
Can all of this flowering really have happened in two years, well, below is a
The UK e-learning Market © Learning Light Limited 2009
22
slide Learning Light began delivering more than three years ago, developed
by our then colleague Jane Hart.
e-Learning 2.0
e-Learning 2.0
SHARING new tools:
COLLABORATION blogging
wikis small/medium-
SYNDICATION SOLUTIONS sized
podcasting informal,
workflow-based, rapid e-learning, orgs
new ways of RSS
embedded learning free Web 2.0 tools
learning social networking SMEs and others
ORGANISATIONAL
Web 2.0
innovation LEARNING
Indeed 2009 saw the publication of e-learning 2.0 by Anita Rosen, with the
cover subtitle “Proven practices, Emerging technologies to Achieve real
results”.
The big question is what are the next petals to be added to the e-learning
flower!
In April 2007, following the Learning Light study, the author of that paper John
Helmer released a new report on the “Movers and Shakers” in the U.K.
e-learning industry, based on a study carried out by Epic. The Epic study
identified 157 companies providing e-learning services in the UK but research
was limited to those whose financial performance is available from Companies
The UK e-learning Market © Learning Light Limited 2009
23
House, 34 in total. This excluded major players like Tata, Line and Brightwave
which from our perspective made the survey of limited value, particularly since
it’s generally accepted that 8-10% of revenues nationally are generated by the
Top Ten players on any list.
John had previously offered 3 listings in the Learning Light 2007 study, which
we have updated and which appears in the tables below.
We are also witnessing the emergence of social enterprises, CICs and not-for-
profits within the industry, helped by access to Open Source technologies.
The 34 companies in the Epic 2007 study; how they are faring
Company Comments
Academy Internet bought by RedTray February 2009
Adval Group defunct
Assima going strong
Atrium disappeared
Communications
Attic Learning disappeared
Easy i now formally known by name of parent company SAI
Group, compliance specialists
EBC sold to Futuremedia, who in turn were acquired by
EdvantageGroup
Enlight disappeared
Epic Bought by Huveaux Group in 2005 and sold to
entrepreneur Andrew Brode in 2008
FT Knowledge Going strong
Fuel IT acquired by LRN (compliance training specialists) and
renamed
Futuremedia 2008 acquired by EdvantageGroup from Norway
gtslearning The driving force in CompTIA e-learning for IT
industry. Going strong.
Happy Computers Continues to win awards for its e-learning and blended
learning.
Imparta Still a force to be reckoned with especially for Sales
and Marketing training
Ivy Learning (Ivy Budget end of market.
Soft)
Jenison One of the success stories of UK industry. Grown from
a budget off-the-shelf supplier to a recognised force in
the industry
KnowledgePool Now one of the largest LBPO companies in the world
learndirect Solutions Still in there, never really cracked the corporate
market but still arguably the largest supplier of level 1
and 2 training in Europe
LRI Strong player in leadership and management market
MARIS Technologies Still going strong; uses offshore production
Outstart Major player in LCMS sector
Pennant Track record in defence, nuclear and heavy industry
PTT Pretty solid player in IT training market
QuestionMark Long established online survey and assessment
software supplier
The UK e-learning Market © Learning Light Limited 2009
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Redtray Still growing both organically and by acquisition
(Bourne, Academy Internet etc).
RTIX acquired by Ultimate Software in October 2006 and
brand name disappeared
RWD Technologies 21 years old, this US-led has successfully emerged
from the SAP / ERP training sector to become a major
performance management supplier, including e-
Learning
Saba US-led dominant force in big-budget HCMS market
SkillSoft Although the massive 3-5 year library deals are
declining in popularity it’s hard to fault SkillSoft’s
service levels, product focus or strategy (e.g. acquiring
Books 24 X 7 and Thomson NETg). NETg merger
pretty much faultless.
SumTotal Originally Docent & Click2Learn, then further growth
by acquisition (Pathlore 2005 and Mindsolve 2006)
Thirdforce Electric Paper, Mindleaders etc…steady growth in
revenues and now entered US market via Mindleaders
but also actively selling Mindleaders in UK
Thomson NETg gone
TPG Academy The Project Group acquired by PPI Learning in 2008
XOR Technology-led and successful across Europe in
major and online training programmes.
The trend to outsource L & D continues worldwide. One problem this can
throw up for suppliers is the disconcerting experience of turning up to a client
meeting to find that the client’s HR operation has been outsourced, and that
instead of talking to their regular contact they now have to negotiate with the
outsource provider – typically a competitor or with a different service focus
and offering from the supplier.
HR, IS and logistics are typically the most outsourced functions in the
enterprise, and the consideration that e-learning involves both HR and IS
means that much heat is being generated by the idea of Learning Business
Process Outsourcing, (LBPO), which is no longer a peculiarly American
phenomenon.
In the USA LBPO is big enough to merit its own league table and industry
association (see: http://www.trainingoutsourcing.com/Index.asp) .
Several companies are making a determined play for the space in the UK,
including Accenture, IBM, QA, KnowledgePool, Capita, Logica CMG, Serco,
Cap Gemini.
This movement into managed learning is coming from both top down and
bottom-up.
Here we hoped to both understand the mood of the industry, and capture its
views as to current Market Trends, Technology Trends, and Future
Industry Trends.
We spoke to companies from the new and very small to the large and well
established, and those on that aspirational journey toward success
(i.e. somewhere in the middle) as we sought to build our picture from an
industry perspective.
The e-learning industry has enjoyed considerable growth in the last few
years, do you anticipate this growth to continue?”
The overall view: Looking good, with the economy driving demand…….
And that’s not all……
While impressed, and pleased with the overall positive nature of the
responses we sought to probe deeper and understand what potential issues
could slow demand, and to identify whether there had been changes to the
sales cycle as the economy contracts.
And
“Have you noticed any changes in terms of sales cycles and starting
projects?”
The overall view: Some slowing in signing contracts and some delays
overall, but an increasingly, opportunity rich environment
We were keen to know more about patterns of public sector procurement and
specifically whether the creation of a specific public sector CPV code
(Common Procurement Vocabulary- 80420000) for OJEU procurement of
e-learning services has had an impact. This CPV was previously attributed to
training services till June 2008.
Learning Light, with its Market Intelligence and Tender Information Service
tracks public sector procurement trends closely. Our view is that usage of this
new CPV code is slow in its uptake, with public sector procurers using a wide
range of CPVs in their procurement, some seeing e-learning as a custom
software development service, and in one instance attributing a CPV relating
to ICT network infrastructure to procure social networking applications.
Has the pattern changed now that e-learning has its own CPV?
The overall view: The public sector is very important to the industry and
the trend remains positive
Our next question was designed to see how well the e-learning industry is
marketing itself, and whether levels of interest are growing outside sectors
that have already adopted e-learning – i.e. will e-learning break out as has so
often been predicted, so we asked:
Our final and rather “cheeky” question for the first section was designed to
sum up views toward the overall economy and introduce the next section of
the interview as we asked our interviewees about the changes in technology
in our industry.
The overall view: We are all realistic about the economy, but it seems to
be an opportunity, as do new industry developments
As noted in the sections above, the industry was realistic about the economy,
but the very firm view was that the recession was an opportunity more than an
issue.
Neither is perceived to have precedence over the other, both are seen as
challenges and opportunities.
We were keen to understand, for example, the impact open source and web
2.0 would have on the e-learning industry. Were these developments likely to
have an impact upon the industries revenues and structure? Or would they
prove disruptive or an opportunity for further market growth?
Our first question was devised to open the topic and bring the much discussed
Open Source technology to the fore. Some interviewees immediately focused
on Moodle, others did not.
The overall view: Its nothing new, we adapt to it and adopt it where
appropriate
Beyond Moodle there was much less controversy about the role of open
source software. The e-learning industry proves itself at being adept in
adopting and adapting all manner of new technologies
Our next question focused on Web 2.0, an area of hype or an opportunity for
e-learning, or even what was referred to as Learning 2.0. The responses
generated a wide range of responses, with almost all seeing the importance of
web 2.0, but many offering a word of warning to temper the enthusiasm
expressed.
Do you feel web 2.0 technologies in general will grow in importance and
use in e-learning?
The overall view: Yes, Yes but use web 2.0 with a “health warning”
Hence our next question, where we sought to focus on the rise of social
networking in particular:
The overall view: Yes again- to anticipated growth and influence, but
with that health warning
Open source, web 2.0 and social networking all add greatly to both the
debate and the opportunity. While some may see the new technologies
as a threat to more conservative business models, these technologies
undoubtedly provide huge opportunities to the content development and
creative companies in the e-learning eco-system. The threat to the LMS
and VLE vendors is there, but again it appears that they too are adapting
to these developments and can take comfort in the innate and
understandable conservativism of many private sector organisations to
adopt these technologies.
In contrast it is our view that it’s the public sector – often seen as a late
comer to the e-learning industry- that is adopting the web 2.0 and social
networking applications. We believe this to be because firstly there is no
existing e-learning technology whose integration they need to consider
and secondly because the culture of sharing good practice in the
organisation is often more established.
It is our view that these technologies will offer greater choice and
greater creative opportunities to improve the learner experience – which
The UK e-learning Market © Learning Light Limited 2009
39
the digital native learner, generation Y learner, or millennial learners
comes to demand.
However, the industry must take care to ensure clients are not confused,
overwhelmed or exposed.
Our final question for this section asked our interviewees to pick out the trends
they sort as likely to be important in the industry in the coming years:
And
What other technologies have you noticed being introduced and used to
deliver learning?
The overall view 1) Mobile – maybe this time, but its really about being
portable, 2) Games – going that way, keep it real and get it more real, but
the devices/consoles are a key consideration and their access is
jealously guarded by manufacturers, 3)e-assessment has arrived, 4)
don’t write off text – e-books and e-reference could be big…. 5) e-
portfolio is now firmly established 6) content is still crucial and how you
use it is king!
Mobile – maybe this time, but it’s really about being portable
Games – going that way, - but not all the way onto consoles..yet?
Devices make a difference – Nintendo DS or i-phones – cool ones are
best!
Keep it real and make it more real – film and TV quality production of
learning
e-assessment has arrived
Don’t write off text! – e-books and e-reference could be big….
e-portfolio is now firmly established and e-Passports, including
SmartCards are part of the education world
Content and instructional design are still crucial, and how content is
used is King!
In our third section we asked our respondents their views regarding the
structure of the UK’s e-learning and learning technologies industry.
The overall view: Yes (but not so easy for new entrants) – tools driven
models, content aggregation models, new models to exploit IP, rapid
development models, new relationships – partnerships and alliances
and SaaS – software as a service all feature in the future development of
the industry
In our next question we asked about the structure of the industry, we were
keen to know what the industry felt about the likelihood of takeovers and
acquisitions, given that this industry has seen quite a number, and would
there be an acceleration in this driven by the economic downturn. Likewise
would the number of new entrants to the industry slow, and the number of
liquidations increase?
The overall view, and not a surprising view given the e-learning industry
make up – which is principally one of Small and Medium Enterprises,
especially in the content development sector was one of Yes we will see
consolidation as companies try rapid growth strategies, Yes – we will
see continued new starts – often driven by take-over consolidations, but
this is the norm. and Yes we will see liquidations but we will also see
lots of collaboration
They then use and choose the appropriate technologies. It is this that
will drive growing levels of collaboration and occasional consolidation
by acquisition as larger companies acquire niche vendors. Indeed we
may see large service providers acquiring specialist content developers.
We also noted the trend in the industry to partner beyond the industry
itself, the development of long term partnerships with IT consultancies
and with training providers was noted and highlighted by some
interviewees. We believe this evolving partnering with training
businesses to be a significant trend likely to lead to a change in the
industry structure and provide foundation for further growth. As Safari
On-line’s Collinson puts it – more alliances than acquisitions.
Can large service providers in the LMS world supply to the more
medium sized companies or will Moodle come to dominate that market
Our final question was to understand the issues faced by the industry in skills
shortages and development.
Learning Light has tracked the e-learning jobs market closely in the Sheffield
city region, and 2008 saw, we believe, an almost 20% growth in job numbers
on 2007, based on our survey research.
2009 has seen a change in the pattern toward skills requirements, with
companies seeking to acquire skills on a “contractor” basis as opposed to a
full time employment basis.
Consequently, while the number of vacancies in the Sheffield City Region for
e-learning professionals appears to have only slightly declined compared to
last year, the type of employment offered has switched significantly from full
time employment to contract employment.
Have you or are you experiencing skills shortages for employees or specialist
sub contractors?
The most common theme across almost all the companies is a shortage
of experience at quite a number of levels.
In using organisations, e-learning now accounts for 12% of “total training time”
Only 7% of respondents including e-learning in their top three practices and
only 8% described it as “very effective”.
Optimism for the future of e-learning is rife. As well as asking what percentage
of training time is currently delivered through e-learning (12%) CIPD asked
what this figure would be in three years time. This produced the answer 27%.
This phenomenon ‘we’ll all get it right over the next three years’ has been
observed in previous CIPD surveys and earlier ASTD surveys.
What is striking is the inability of this sort of survey to define the whole
technology-enabled learning spectrum… formal training; formal learning;
informal learning; collaborative learning and JIT e-reference. Just as we are
finding it virtually impossible to size the market because it’s hard to find its
boundaries, so professional HRD practitioners cannot comment on learning
forms outside their remit and often their cognisance.
The UK e-learning Market © Learning Light Limited 2009
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Particularly interesting is Donald H Taylor’s response, below.
At first glance the CIPD 2008 Learning and Development survey is a mess of
contradictions on e-learning.
Yet these figures, which might smack of woolly thinking, actually tell a clear
story of changing attitudes to learning technologies. They are also part of a
fundamental change occurring within the learning and development function
itself.
The most important thing about these figures is that we can believe them.
They are not the frothy enthusiasms of vendors and early adopters; they
reflect actual learning and development practice today.
And the message is simple: for those that use it, e-learning is now simply
regarded as part of the learning mix, and practitioners are increasingly
confident with it.
If people know what they’re doing with e-learning, this explains why only 7%
considered it a ‘most effective’ practice. For them, this phrasing makes no
sense. You might as well ask whether books are an effective learning
practice. e-learning is a medium of delivery. Any effectiveness depends not on
the medium itself, but how it is used.
Six years ago, the question could have made sense, because e-learning then
implied something quite narrow. In 2002, e-learning essentially meant the
delivery of courses. In providing materials and a structure for self-study, it was
similar to its predecessor’s computer-based training (CBT) and computer-
assisted learning (CAL).
e-learning added to these the concept of central planning and tracking via the
learning management system (LMS). In 2002, e-learning for most people
meant an electronic analogy of the classroom: courses that were centrally
prepared or commissioned, with attendance and assessment data collected
by the learning and development.
In the absence of any agreed definition of e-learning, those polled for this
CIPD survey will have taken e-learning to include the much wider range of
electronically delivered learning 2008, from LMS-delivered courses to EPSS
and to the use of social networks and ….informal learning.
In other words, where the questions are not worded to restrict the sense of
what e-learning means, this survey shows comprehensively that in practice it
has gone through the five stages of the Gartner hype cycle and is now
resolutely past the trough of disillusionment and up on the plateau of
productivity.
Social networking and instant messaging will join tools such as email and
‘webinars’ among technologies that can be used to support learning, but can
do much more besides. They will be part of a trend taking technology-
supported learning away from page-turning on the screen to being a social
experience, and from a centralised ‘push’, to individually driven ‘pull’.
In his essay for last year’s Reflections report, Charles Jennings of Reuters
bemoaned the fact that only 56% of organisations had a written learning and
development strategy. He pointed out that it would be inconceivable for a chief
executive not to have an explicit strategy and suggested that it should be as
inconceivable for a learning and development department not to have one
either.
These ‘Top 20' companies indicated that their revenues were generated
through multiple solution areas. As in previous years, the largest percentages
of revenues came from training content development (33%) and delivery
(27%) - see chart below for revenue breakdown of the 'Top 20”.
It has always been difficult to give an overall size to the UK e-learning market,
since companies like Accenture and IBM do not break out e-learning revenues
in their financial reporting (and in some cases outsource elements of their e-
learning to boutique providers, providing a risk of double counting). Also, a
large number of UK players are either privately owned UK companies or UK
registered companies privately owned overseas (e.g. Plateau Systems) and
revenues fall below the Companies House reporting threshold … And finally…
how do we price WIKIs, Blogs and all the other informal collaboration and
sharing tools, particularly free open source products?
One “best guess” stated in the last edition of this Report (2007) was that the
total value of the UK e-learning market was greater than £160m, but unlikely
to exceed £250m all told. Interestingly within six months of producing the
Report for Learning Light, the author John Helmer used a calculation based on
average revenues and number of identified companies in the UK to suggest a
different “best guess” of the UK market for e-learning products and services as
being between £500m and £700m, i.e. nearly 4% of private sector training
spend. But you’d have to add in about £25m for UfI learndirect….
A third approach (not based on reported or “interpreted” revenues of
suppliers) tackles this from a percentage of training budget for
industry sectors against forecast GDP for the UK. But again what are
we measuring when we talk about e-learning. Does web-delivered
Video Arts videos or DTV films equal e-learning?
As noted above, in January 2007 when our first report e-learning market
report was published, our estimate for the market varied between £160 million
and £250 million, and we believe the market was enjoying growth of over
25%.
In the time between this report and now, Learning Light has developed a
sophisticated market forecasting model, based on a series of variables,
including our Market Intelligence and Tender Information Service.
Since the June 2008 update of the CPV (Common Procurement Vocabulary)
codes, e-learning has become a recognised code in the world of government
procurement and OJEU we have been able to gain far greater incite into
public sector procurement patterns.
Our other variables we have modeled include the growth (or decline) in GDP,
The UK e-learning Market © Learning Light Limited 2009
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the expenditure on training in the UK – which we believe is closely related to
company turnover and hence GDP. We have also modeled what we believe to
be the level of interest and uptake of e-learning by companies and
organisations, and the proportions of training budgets being spent on
e-learning and learning technologies.
It is in the later two categories that Learning Light in addition to its close
monitoring of public sector procurement contract awards uses its unrivalled
network of organisations and associates along with its research skills to
synthesize these key trends.
Accordingly on reflection (and with the benefit of our forecasting model and
information service) we believe the market in 2006 to have been worth
somewhere near to £229 million. We do not however consider that the market
grew as rapidly as we previously believed. Indeed we believe the market grew
in the order of 12% from our 2005 reverse forecast measure of £203 million.
The Learning Light model adopts a greater degree of caution with uptake
levels, we believe some 45% of organisations are using e-learning in 2008
and we project growth to 47.5% in 2009.
It is more difficult to estimate the amount of overall training budgets that are
now directed toward e-learning. CIPD research indicates 12% of training time
is devoted to e-learning – a long way from the 30% in the USA! Indeed we
have seen even higher adoption level numbers in the USA – up to 50% of
training delivered in the non education sector uses e-learning!
This reflects our view garnered from the industry that the UK e-learning
Based upon our assumptions we believe the market continued to grow into
2007 and 2008, with growth rates of 13% to 13.5%, and accordingly we would
value the market in 2008 to have been worth £294 million.
Our ability to track public sector contracts awarded was able to identify a
number of significant contracts awarded to Sheffield based companies that
account for 35% of the growth in the market from 2007 to 2008 alone!
How big will the slowdown be? Or will this be the defining moment for
e-learning and learning technologies as companies turn to e-learning in
increasing numbers as a way to reduce training costs and even improve their
environmental credentials by traveling less for training!
The Learning Light model forecasts a 3.5% contraction of GDP, and this will
without doubt be reflected in a reduction in training budgets as companies and
organisations cut costs and reduce employee numbers.
Our forecast shows the e-learning market place growth to slow by more than
50%, but stays in positive territory at a growth rate of 6.7%, and the industry
breaks the £300 million barrier with revenues of £313 million in 2009.
If we accepted the CIPD level of uptake to be that 57% of companies now use
e-learning we could value the market at more than £370 million for the non
education market!
This research indicated that we were perhaps a little cautious in our figures for
the UK and the market was closer to £450 million in the corporate and non
education sector and an additional £150 million in the education sector. In
addition these researchers forecast growth for the UK market at over 8%.
We accept that these forecasts are never likely to be completely accurate, and
can offer what can only be described as trends.
2006-7
£800
£600
£400
2009-10 projection 2 2007-8
£200 Learning Light
£0 John Helmer
Additional single forecast
2009-10 2008-9
We do however believe that the future market for e-learning remains robust,
with interest levels in e-learning continuing to grow. Learning Light operates
the web site www.e-learningcentre.co.uk which is enjoying record numbers of
site visitors.
We believe the government initiatives with Train2gain will bring stimulus to the
training market, and mitigate some undoubted decline that will take place and
which will further underwrite the growth of the e-learning component of the
training market .
The Scandinavian market is forecast to grow at over 8%, a figure that could
equally be applied to the UK market, given their comparative maturity.
The UK e-learning Market © Learning Light Limited 2009
53
The next largest market is anticipated to be the French market with growth
projected at over 15%, but off a lower base – we would estimate at between
€300 – to €350 million.
Data for the rest of Europe – Germany, Eastern Europe and Southern Europe
is difficult to obtain.
8.1.10 A US perspective
The latest (February 2009) Bersin research in the US market revealed that
training spend per learner fell between 2007 to2008 and is likely to fall further
in 2009. In large organisations expenditure on online learning also fell for the
first time ever and there will be continued pressure in 2009. ASTD’s recent
survey showed that over 50% of respondents are being challenged to do more
for less with their budgets.
Although there’s a glut of industry leaders and pundits around the globe willing
to offer their predictions, you’ll find that these don’t necessarily become reality.
In the appendices to this report you’ll see expert predictions (from eLearn
Magazine) on what to expect through 2009, which may or may not accurately
inform market growth estimates. Mischievously you’ll also find in Appendix D
Seb Schmoller’s review of expert predictions for 2008 and how they actually
stacked up…
This area of the market is also one of the most contested, with a wide range of
vendors competing. However, one word did raise considerable interest
amongst our interviewees – and seems to define a new category in this
market, the open source VLE: Moodle.
9.1.2 Moodle
Our view, based on our research is that Moodle and indeed other open source
VLE platforms such as Sakai will come to play an increasing role in the
marketplace.
Moodle will support tactical quick and practical launches of e-learning, and we
see an increasing number of content development providers incorporating
We believe this already crowded LMS/VLE market will benefit from what we
refer to below as “Compliance 2.0” and the growing interest in e-learning and
learning technologies in mid size corporate organisations and the medium
sized SME businesses will further drive adoption of both open source and
proprietary applications.
From our perspective it’s quite often the simplest tools that are of
interest…NING, JING and SnagIt for example and LMS vendors and Moodle
plug in developers must take care, so as not to make their systems offerings
increasingly complicated and cumbersome.
Both Kineo and Keighley based Webanywhere (one of only four UK Moodle
partners) see strong and continuing growth for Moodle in both the education
sector, (where Moodle is being effectively deployed and integrated with school
management systems) and in the corporate market.
However, we do not believe that it is outright doom and gloom for the LMS
vendors. Indeed it is our view that this market, though crowded will continue
to grow. The value proposition between open source solutions and proprietary
software will become clearer, with price as only one metric of measurement in
the true cost of ownership calculation.
Two LMS vendors FISC and e2train both report that Moodle is having little
impact upon their businesses.
LMS vendors will seek to adapt their business models by offering SaaS
deployments and deeper integration to ERP and HR systems that exist in
closed corporate worlds where open source solutions may not be viewed quite
so favorably as in the academic marketplace.
We have seen very strong growth from a number of companies in this field,
with several Sheffield based companies including the Workshop, Desq as well
as London and Sheffield based LINE Communications and Brighton and
Sheffield based Kineo all growing strongly.
Indeed our tracking of the Sheffield based companies saw 2008 as one of
considerable expansion in job numbers, a 20% growth in employment
numbers.
Not a mouse is moved in anger until a customer has already agreed to buy the
end result, and marketing costs can be kept fairly minimal. However, with e-
learning becoming more established within large organisations, increasing
price pressure is beginning to be seen, and a questioning of the costs involved
in continually reinventing the wheel this way.
The demand for bespoke content development we believe will continue and
get stronger and stronger. We anticipate (and indeed are seeing) that new
genres emerge using the values of TV and film production. This is true of
Belfast based Aurion Learning and Leeds based Mezzo films.
The demand for ‘realer’ and ‘realer’ and more relevant content will continue,
manifesting itself in scripted scenarios and more and more sophisticated
immersive learning scenarios and simulations.
The key defining element will be the capability of the industry to deliver good
learning design. This more than any other factor we believe will be both a
barrier to entry to the market and a potential barrier to growth.
The willingness and ability and undoubted creativity of many bespoke content
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developers to adopt and adapt both rapid development tools and techniques,
as well as the web2.0 and social networking applications gives continuing
confidence in this segment of the industry.
It is however the demand for this learning style that will in the end drive
demand through to the industry.
We, however remain less clear as to how, or indeed if the video gaming
industry and the e-learning industry will collaborate or converge. In the full
interviews synopsis we present the views of a leading exponent of the use of
video games for learning – from the games developer’s perspective.
Tools – rapid and self authoring will drive demand as well as drive down costs
and seed both issues and opportunities for the e-learning industry.
We, like many others in the industry have been impressed by the speed of
growth and expansion of Kineo, a company who built its business model
around rapid e-learning development tools.
The emergence of rapid tools that allow much greater self authoring potential
to trainers or subject matter experts we believe will have considerable impact
on the market place.
It would appear logical that more and more learning can be developed by in-
house teams and following that logic we would anticipate seeing the uptake of
tools by in house learning development teams.
Some put their faith in rapid e-learning – which promises drastically to lower the
cost and time it takes to produce bespoke e-learning, but which may involve a
readjustment of expectations difficult for some to make.
However, the pragmatic view this requires runs counter to the prevailing
culture in training departments (especially within the public sector) with many
organisations persisting in seeing their own skills issues as unique and
unprecedented.
9.6 Web 2.0 – learning 2.0 – Social networking and Informal learning
The key message from our interviewees was one of “appropriateness”, - the
learning requirement must be paramount, prior to the choice of technical
solution.
Web 2.0 and Social networking will without doubt find a role in the learning
and development mix, and will quite possibly go a considerable way in
supporting and delivering the “informal learning” agenda.
However, its usage and its effective integration into the overall learning and
development mix will be dependant upon the creativity, innovation and
learning design skills of the solution vendor.
We are non the less greatly taken with the concept coined by Jay Cross
(2007) in his work “Informal Learning” of “Learnscapes”.
The arrival of Adobe Flash Lite is having an impact for developers allowing
richer content to be developed. 3G mobile networks now allow improved
levels of connectivity.
The choice of platforms – from i-phones to netbooks, via Nintendo DS are all
now providing better and better portable learning devices.
The Apple impact cannot be underestimated – both the devices and the arrival
of i-tunes U will embed learning into portable devices, and be seen as cool.
The netbook is another major factor that will support the growth of portable
device learning opportunities.
9.8 e-assessment
Despite the anticipated arrival of e-assessment for a number of years, and
surprisingly little comment from the e-learning industry itself, we believe that
e-assessment will grow strongly in importance.
The demand drivers we believe are firmly in place, and the applications being
offered now deliver on the ROI model. Our view is that higher education will
prove receptive to the time savings and quality consistency e-assessment
tools can now offer.
It became quickly apparent in our interviews that interest levels for e-learning
remained strong in areas that conventionally given present economic
circumstances we would have anticipated a marked fall in demand. By this we
mean the banking and finance industry and the automotive sales industry.
Sheffield based FISC, Kineo and LINE Communications have all reported
continuing high levels of interest from the financial services sector.
Many financial institutions are already LMS operators but others are not.
Secondly the content in use by many organisations is quite dated, and
suffering from the law of diminishing returns.
We foresee a significant level of demand for new and more interactive content
to deliver the softer end of compliance training as well as defining leadership
and decision issues in a learning format.
While Compliance has often been seen as one of the early drivers for the
adoption of e-learning, its importance is still too great to be written off as one
of yesterday’s driver of demand. Indeed it is our view that this market will be
significantly stimulated by recent events.
Learning will continue to grow and grow beyond the formal organisational and
educational frameworks. Peer to Peer learning and sharing across all these
varying modes of communications and collaboration will flourish.
User or learner generated content will become more and more important. This
trend is difficult to predict and even harder to prevent, given the speed of
technical development, and the transient and promiscuous user pattern.
We believe the training industry (in certain cases) has seen e-learning as a
threat, and some, but not all used every opportunity to discredit e-learning.
The culture of learning will change in organisations and the need for ‘Just in
Time’ learning will increase, leading to the disaggregation of many linear
courses into small knowledge nuggets of learning.
The rise and rise of social networking – from Facebook to Linked-in or Naymz,
via Twitter will create the opportunity for learners to request solutions to
problems from peer groups across the organisation (or indeed the world). Add
to this Blogs and micro-blogs and Wikis and other open source environments
such as Ning and the traditional training industry will be challenged.
The rise of the Play Station generation has likewise put new demands upon
both schools and employers as to the quality and means of delivery of
learning and training.
10.4 The ROI model can make sense and delivers much more learner
impact
Traditionally e-learning benefits have been promoted with ROI and the ability
to scale consistently to support global delivery as key benefits. In addition,
LMS vendors typically stress the ability to schedule and track learning and
development.
We are now seeing speed of development and deployment as a new and key
differentiator coming to the fore, as a way of measuring return on investment.
It is our view that the availability of rapid e-learning tools, the emergence of
web 2.0 will support the uptake of e-learning and learning technologies in
medium sized organisations.
This has proven to be more than a happy co-incidence but undoubtedly this
has added to our confidence in the growth of the market, as marketing
departments seek to use e-learning to support products and services in the
market.
10.8. Services
10.8.1 Consultancy: a cottage industry?
e-Learning consultancy is something of a cottage industry in the UK,
most companies engaged exclusively in the field being micro-
businesses.
As industry watchers we have Learning Light, the e-Learning Centre,
Seb Schmoller, Jane Hart, and a handful of other quasi-equivalents to
Jay Cross, Bersin & Associates, or Brandon Hall. A standard growth
strategy for most learning technology companies, content companies
and training specialists is to offer consultancy in one form or another
and some are quite sophisticated operations. BUT many of the big
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players, including outsourcers, rely on the services of Associates from
the micro-businesses.
We have noted the growing success of LINE, the Workshop and Epic
in offering consultancy services. This is a trend we expect to continue,
and the Sheffield cluster of e-learning companies is particularly well
served by a rich eco-system of specialist consultants such as Keith
Shaw, Phil Green and others. The growth of Sero Consulting has been
particularly impressive, and has been effective in using the
consultancy eco-system made up of companies such as Psydev,
Dunelm and e-loki.
Respondents to the survey were asked 'which of the following training and
development practices do you believe are most effective?' and were invited to
choose three practices from an extended list.
In those organisations that are using e-learning, it now accounts for about
12% of 'total training time'.
The figure recorded for the United States in 2006 by the American Society of
Training and Development (ASTD) was 30% .
Optimism for the future of e-learning is rife. As well as asking what percentage
of training time is currently delivered through e-learning (12%) we asked what
this figure would be in three years time. This produced the answer 27%. This
phenomenon ‘we’ll all get it right over the next three years’ has been observed
in previous CIPD surveys and earlier ASTD surveys.
At the beginning of the decade, there was huge interest in e-learning. Does
the interest continue, and how far has e-learning lived up to expectations so
far? Donald H. Taylor, Chair of Learning Technologies, investigates these
questions, and asks whether shifts in the learning and development
profession’s attitude to e-learning suggests that the profession itself is
changing
At first glance the CIPD 2008 Learning and Development survey is a mess of
contradictions on e-learning.
Just 7% of those polled regard it as among the most effective learning and
development practices, yet 57% of organisations use it and 27% of the
remainder plan to use it within 12 months.
Yet these figures, which might smack of woolly thinking, actually tell a clear
story of changing attitudes to learning technologies. They are also part of a
fundamental change occurring within the learning and development function
itself.
The most important thing about these figures is that we can believe them.
They are not the frothy enthusiasms of vendors and early adopters; they
reflect actual learning and development practice today.
And the message is simple: for those that use it, e-learning is now simply
regarded as part of the learning mix, and practitioners are increasingly
confident with it.
In this survey in 2002, 54% agreed that ‘e-learning involves the possibility of
wasting a lot of money’, a figure that six years later has dropped to 38%, with
just 14% agreeing strongly. The intelligent customer has arrived.
If people know what they’re doing with e-learning, this explains why only 7%
considered it a ‘most effective’ practice. For them, this phrasing makes no
sense. You might as well ask whether books are an effective learning
practice. E-learning is a medium of delivery. Any effectiveness depends not
on the medium itself, but how it is used. Those familiar with e-learning will
almost certainly be using it as one part of a delivery strategy that also
includes, for example, classroom delivery and book-based self-study.
Six years ago, the question could have made sense, because e-learning then
implied something quite narrow. In 2002, e-learning essentially meant the
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delivery of courses. In providing materials and a structure for self-study, it was
similar to its predecessor’s computer-based training (CBT) and computer-
assisted learning (CAL).
E-learning added to these the concept of central planning and tracking via the
learning management system (LMS). In 2002, e-learning for most people
meant an electronic analogy of the classroom: courses that were centrally
prepared or commissioned, with attendance and assessment data collected
by the learning and development.
In the absence of any agreed definition of e-learning, those polled for this
CIPD survey will have taken e-learning to include the much wider range of
electronically delivered learning materials available in 2008, from LMS-
delivered courses to electronic performance support systems (EPSS), to the
use of social networks and Google to support informal learning.
In other words, where the questions are not worded to restrict the sense of
what e-learning means, this survey shows comprehensively that in practice it
has gone through the five stages of the Gartner hype cycle and is now
resolutely past the trough of disillusionment and up on the plateau of
productivity. The key statistic here: 65% of respondents strongly agree it is
more effective when used with other forms of learning. E-learning is now
simply part of the mix.
People don’t necessarily find e-learning easy (80% rightly say it requires new
skills for learning and development practitioners), but it is no longer regarded
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as revolutionary. Six years ago it excited the profession: 34% agreed with the
statement that ‘e-learning will significantly alter our training offerings’.
When this year’s survey asked for ‘the major change affecting organisational
learning and development over the next five years’, the CIPD did not even
include e-learning among the options offered and nobody mentioned it under
the catch-all answer of ‘other’.
It has taken e-learning about ten years to reach this state of maturity.
Social networking and instant messaging will join tools such as email and
‘webinars’ among technologies that can be used to support learning, but can
do much more besides. They will be part of a trend taking technology-
supported learning away from page-turning on the screen to being a social
experience, and from centralised ‘push’, to individually driven ‘pull’.
It is difficult to imagine, given the results of this survey in comparison with that
of 2003, that any of these tools will have the dramatic impact on perception (if
not on reality) that e-learning did in the early part of the decade.
The learning and development professional is just too savvy now. And this
acceptance of e-learning as one of many tools reflects an important change in
the learning and development function’s priorities. As noted above, when
asked to identify ‘the major change affecting organisational learning and
development over the next five years’, respondents did not answer ‘e-
learning’. The most popular answer, significantly ahead of the others, was:
‘closer integration of learning and development activity and business strategy’.
In his essay for last year’s Reflections report, Charles Jennings of Reuters
bemoaned the fact that only 56% of organisations had a written learning and
development strategy. He pointed out that it would be inconceivable for a chief
executive not to have an explicit strategy and suggested that it should be as
inconceivable for a learning and development department not to have one
either.
Alternative interfaces … big this year: more Wii toys hooked up to computers,
orientation-sensitive interfaces, gesture-based presentation software, even
brain-wave and body feedback games… a lot of discussion of identity, data,
and computational portability; cloud computing; and virtual machines….
calendaring and event-related services will become widely popular:…
increase in synchronous online classes, conferences, concerts, and other
Kantian (time and place based) applications. Kantian computing also
embedded into devices as well: cameras, phones, PDAs, laptops, cars, belt
buckles, keychains et al. Recommender systems will improve enough to
become actually a little bit relevant, appliances will be more connected and
data intelligence (summarisation, visualisation, and decision support) will be
huge. Stephen Downes, Researcher, National Research Council, Canada
…cell phone will emerge as the learning infrastructure for the developing
world. Initially, those educational applications linked most closely to local
economic development will predominate… parents will have high interest in
ways these devices can foster their children's literacy. Countries will begin to
see the value of subsidising this type of e-learning, as opposed to more
traditional schooling. Chris Dede, Harvard University, USA
Schools will have to offer to train students to do actual jobs and they will do
this online. The first two, which I know of, to step up to the plate are ISIL in
Lima, Peru and La Salle, in Barcelona, Spain. Real education, according to
the second president of the United States, John Adams, "...is about learning to
live and learning to make a living" an idea that got lost between the late 1700s
and today. Roger Schank, John Evans Professor Emeritus of Computer
Science, Psychology, and Education, Northwestern University; CEO
Socratic Arts
The risk (to suppliers) of relying on free tools and services in learning will
become apparent as small start-ups offering such services fail and as big
suppliers switch off loss-making services or start charging for them. The Open
Educational Resources (OER) movement will strengthen, will face up to the
"cultural" challenges of winning learning providers and teachers to use OER.
Large learning providers and companies that host VLEs will make increasing
and better use of the data they have about learner behaviour, for example,
which books they borrow, which online resources they access, how long they
spend doing what. Seb Schmoller, Chief Executive of the UK's
Association for Learning Technology (ALT), UK
… the global transition from the industrial age to the network economy will kill
off much of the training and education programmes as we have known it. In its
place will arise a more natural approach to learning through collaboration and
sharing… great times ahead: fulfilling, bounteous learning unprecedented…
the journey to this promised land will be brutal and unforgiving for people and
organisations who resist change and lobby for "back to the basics." Jay
Cross, Internet Time Group LLC, USA
I hope for greater government support for e-learning around the world with
mentoring for the less privileged communities. Yehudit Judy Dori, Technion,
Israel Institute of Technology, Israel, and Visiting Professor,
Massachusetts Institute of Technology, USA
The ordinary: Mobile will emerge, not as a major upheaval, but quietly
infiltrating our learning experiences … more use of games as a powerful
learning opportunity and tools to make it easier to develop. Social networking
will become the 'go to' option to drive performance improvements.
The extraordinary: we'll start realising the power of consistent tagging & being
able to meta-process content to do smart things on our behalf. We'll start
seeing cloud-hosting as a new vehicle for learning services.
Clark Quinn, Quinnovation, USA
"The Year of Implementing 2.0." Previous years spent getting our industry to
see new Web technologies as having powerful learning applications. My
advice to the e-learning community: pay close attention to the culture in which
you are implementing. Ignoring the impact on culture will be the Achilles' heel
of e-learning implementations. Brent Schlenker, New Media & Emerging
Technologies Analyst, The eLearning Guild, USA
Learning professionals start to move beyond using Web 2.0 only for "rogue,"
informal learning projects and start making proactive plans for how to apply
emerging technologies as part of organisation-wide learning strategy. In a
recent Chapman Alliance survey, 39 percent of learning professionals say
they don't use Web 2.0 tools at all; 41 percent say they use them for "rogue"
projects (under the radar screen); only 20 percent indicate they have a plan
for using them on a regular basis for learning. Early adopters such as Sun
Microsystems and the Peace Corp have made changes that move Web 2.0
tools to the front-end of the learning path, while still using structured learning
(LMS and courseware) as critical components of their learning platforms.
Bryan Chapman, Chief Learning Strategist & Industry Analyst, Chapman
Alliance, USA
I have been exploring frameworks during 2008 that give designers and
developers the ability to create applications that can reside both online and on
desktops; a capability that is quite frankly a little overwhelming when one
thinks in terms of interoperability. The full impact of this implementation can be
realised when we consider how the array of cloud applications can be
leveraged irrespective of time, place, connectivity, device, etc. This is the level
of interconnectivity that will usher in a new paradigm in online learning. Phil
Ice, Director of Course Design, Research & Development, American
Public University System, USA
There are three reasons why e-learning will continue to grow in 2009: (1) The
economy …more companies will be attempting to achieve cost savings using
e-learning technologies. (2) As students attempt to make better use of their
time and money, they will continue to avail themselves of e-learning
opportunities. (3) companies trying to establish a reputation for being eco-
friendly, will use e-learning as part of their green initiatives. Matt Bovell, Vell
Group, USA
….a time when more money is spent on training. The reasons are: (1) Good
companies (particularly in the financial sector) use training as part of an exit
package. … as people are released, budgets are provided for the release
packages and some of this is spent on training. (2) Individuals want to
distinguish themselves from the market. This means they have to spend
money on training to provide that differentiation. Many training companies see
this time as challenging, but not a time to expect a large decrease in training
revenue. Peter Parker, Owner, EPCoT Systems Ltd and Management
Consulting Consultant, UK
Accenture Education
VET
EscP Consulting
Servitium
James Cook University
International Computer Science Institute
Internet Time Group
International Islamic University Islamabad
5. If… the online learning is authentic, engaging, media rich with high levels of
online facilitator support, the learning experiences can easily eclipse that of
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the classroom. Following this approach makes online learning just as
expensive as face-to-face although the scalability is better than the traditional
approach. Web 2.0 and virtual environments will bring outstanding
opportunities for formal and informal learning experiences, but will not save
organisations substantially with costs.
6. … year for companies to reuse content that they have previously created by
starting to utilise EPSS solutions that can provide this information to users at
the moment of need. Providing immediate assistance to enable individuals to
accurately perform a task utilising a combination of resources from a single
point of initiation. We face a credit crunch and a knowledge crunch but if we
utilise tools effectively we can ensure that the knowledge captured by SME's
is shared at the time it is needed
7. ….. a year where learning is moved more directly into the workflow and out
of the classroom….. learning at “the moment of need”. Ubiquitous and less-
expensive technology, social networking, peer-to-peer collaboration and user
generated content are among the contributors to the increasing reality of
workflow learning. Add ….. continuous pressures on budgets, the requirement
to show business value for training spend (Return on Learning), the predicted
frequent job changing of the new generation of employees - you have a
training business that will push more learning to the actual workplace and
strive to embed learning into tasks. I see this as going beyond traditional
performance support and into something much richer, much more
customisable, and much more personal... 2009 won’t see the reality of this,
but will move us to this type of ideal.
8. ….. we are nearing the do-or-die point for those classroom trainers who
have been resisting e-learning. Organisations (will) take a hard look at travel
and other costs associated with traditional classroom training, and based on
cost (rather than quality) will increasingly shift old business to new delivery
methods. While I welcome the move to increased use of e-learning (as I never
did understand how the classroom got to be held in such exalted esteem), this
isn’t necessarily good. It breeds the “convert” (rather than transform)-a-
classroom-course-to-online-mentality. … a shift toward buying or building
whatever is the cheapest instruction, and away from thoughtful instructional
design. …. we will see increasing understanding of evidence-based practice
but worry that it will be ignored in favour of easier, crank ‘em out approaches.
…as much a hope as a prediction: the increasing use of social media may
create the perfect storm for learners to start taking charge of training offerings
and let-me-get-it-myself content.
Overall, the predictions were a pretty mixed bag, with lack of specificity,
predictions of past events, and obviousness being the main culprits. 2008 was
an especially difficult year to predict, and those who simply predicted 'more of
the same' (more social networks, more virtual reality, more YouTube, more
mobile learning) tended to fare poorly. It's likely that in 2009 the people who
based their predictions around the current economic crisis will meet a similar
fate. Predictions of an impact amount to predicting past events, but identifying
the specific impact will be more difficult. And what will technology do in the
mean time? If you focused on the economic downturn, you probably missed
that.