Business models in EdTech: How is value creation performative

• In Event: The Politics of EdTech: Exploring the changing conditions of educational governance in the age of technocapitalism (Part II)

Proposal

Narratives of plucky, risk-taking technology innovators providing cost-efficient and effective digital learning solutions abound while increasing amounts of public money are spent on EdTech globally. At the same time, a number of reports identify predatory business practices and monopolistic tendencies in EdTech that stifle innovation and lock users into digital products that do not deliver on their promises. The kind of digital products and the business practices behind these products impact individual and collective teaching and learning paths. In this article, we explore the connection between the business models of EdTech companies and the nature of their digital products and services.
The EdTech industry financing has undergone notable dynamics in the past three years. First, there was a steep rise in venture capital investment in EdTech between 2012 and 2021, with a huge fall since then. This impacts potential innovation opportunities in EdTech. Second, the investment amounts in EdTech companies have come to unprecedented highs, alongside an emergence of ‘Big EdTech’ (Williamson, 2022), but at the same time, the valuation of many companies dropped, such as that of Byju’s. This has consequences for the future products of these companies and their users. Third, there is a substantially increasing number of acquisitions of both EdTech start-ups by other (Ed)Tech companies, as well as of more established EdTech incumbents by global investment, private equity, or other firms. This is consequential because any acquisition means a change for EdTech services, as well as underlying data practices. These dynamics together present several key and under-researched questions: how are EdTech companies growing and changing their business models; how is this impacting digital products and services used by individuals and schools/universities; how do specific value creation and value capture approaches impact EdTech innovation?
In this article, we use the notion of the business model to explore these key questions. We conceptualise the business model as a performative device. Following Doganova and Muniesa (2015), we are not interested in defining business models as true descriptions of particular companies or their products. Rather, we understand business models as demonstrations of promises to build legitimacy, persuade and rally allies, and experiment with possibilities. A business model allows for specific views on value creation in that it cognitively and normatively persuades publics what is valuable. So, the very activity of ‘value creation’ is performative and allows particular technologies to be developed but not others. This paper analyses the underlying value creation work and value capture associated with technology companies’ business models.
Empirically, we analyse a number of EdTech incumbents and acquisitions around them – the acquisitions they made, as well as if they were acquired and with what effects. We follow a select number of companies that were established between 2008 and 2014, which allows us to (i) understand the start-up phase of searching and consolidating business models and their ‘value creation’ activities as performative devices, (ii) how this impacted digital products and the pricing, as well as the ‘value capture’ moments, and (iii) profits and social consequences.

Authors

• Moira V Faul, NORRAG, Geneva Graduate Institute

• Janja Komljenovic, University of Edinburgh