Business model framework for education technology entrepreneurs in South Africa

Abstract

Education technology (EdTech) has been proven to make a positive impact on education outcomes in developed economies. There is a vastly untapped opportunity to introduce more EdTech into the South African basic education ecosystem to help with the education crisis in South Africa. In 2004 the South African Government issued a clear e-Education policy white paper, but not enough progress has been made to improve education. The EdTech entrepreneur is the entity in the education ecosystem with the highest level of agility to take on such an opportunity, if properly positioned and supported. The objective of this study was to develop a framework to identify key considerations for EdTech entrepreneurs to create sustainable ventures, and in so doing make a larger contribution to improving the quality of basic education in South Africa.

The research approach was exploratory. A conceptual model was developed from the literature review. Propositions were set based on the conceptual model. A multi-case study approach was chosen for primary data collection. Qualitative analysis compared empirically based results as identified themes with three predicted propositions.

The literature review suggests the following possible considerations when developing a business model for EdTech entrepreneurship, i.e. innovation to develop a unique value proposition, delivery to a broad customer base, open models to encourage collaboration with various stakeholders, impact measurement, diverse funding sources, as well as simple and focused revenue streams. Little to no literature exists with empirical findings on these considerations in the EdTech industry. Existing literature builds frameworks, components and specifications for consideration without any empirical testing. Part of the challenge is that companies keep the details of their business models secret, especially small companies with a niche value proposition. No literature could be found for EdTech entrepreneurship in South Africa, or any emerging economy.

Four themes emerged from the results: mature product, complex support network, multiple infrastructure considerations, and multiple sources of revenue. The findings confirmed teacher distrust as having the greatest impact on value creation, mobile networks as only one of the key impacts on value delivery, and both private and public sectors providing value capture opportunities. An archetypal business model framework for EdTech was developed, which concludes: EdTech entrepreneurs should develop mature products that teachers can endorse; build a support network, which would include an advisory board and low-cost infrastructure providers; and source multiple revenue streams from the private and public sectors. Incubation support does help, even if just to provide introductions to a wider support network. Better government policy and procurement implementation would also enhance the provision of simpler and predictable revenue streams to EdTech providers.