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SkySong Education
  Innovation Summit
"Education in a Rapidly
   Changing World"
    Michael T. Moe CFA
      Scottsdale, ...
Fast Facts in Education...
Under 30% of U.S. adult
population has a college degree
In China, it's less than 5%
To meet China's demand for higher
education, we would need to build
  10,000 Universities the size of
       University of...
College graduates make over
110% more than high school
         graduates
30% of 9-12 graders don't graduate
         from high school
For 17 of 50 largest school districts
           it's over 50%
and over 50% for African American
          and Hispanics
2X more likely to be unemployed
8X more likely to be in prison
Economic Impact is over $300
      billion per year
That's the GDP of Kansas, Utah,
Nebraska and Alaska combined
           every year
China will be the biggest English
speaking country in the world in
          next 5 years
1 in 4 workers leaves employer in
         less than a year
College graduates today will have
 13 careers before they retire
India has more honor kids than the
           US has kids
India’s major exports are no longer
         Gems and Jewelry
it’s

HUMAN CAPITAL
The top 10 on demand jobs in
 2010 did not exist in 2004
We currently prepare kids for jobs
      that don’t exist yet
by using technologies that don’t
            exist yet
In order to solve problems we
    don’t even know about
1 in 4 people prefers email vs. face-
       to-face communication
In 2020, that figure will be 3 in 4
The current workers will spend 10
  years of their life dealing with
              emails
2 in 3 social network sites are
   active during work force
Users spend 18.5 billion minutes a
        day on these sites
In 1790, 95% of jobs were agrarian
By 1900, 40% jobs were agrarian
Just 13% were high school
graduates and 3% college graduates
Today, only 2% of jobs are farm
            related
The Past Isn’t a Prologue to the Future
  # of Companies in the Top
  100 Biggest in the US
  Industry                    ...
35 years ago was the launch of the
              PC...
20 years ago, the Berlin Wall came
               down
15 years ago, Netscape went
          public...
15 years ago, US was 50% of global
  market cap...
                                                            Market
    ...
...today it’s 28%

                                                            Market
         2010                       ...
New Millennium Lost Decade
-5.6% per year in the market
Yet...

Innovation Flourished
$175 billion Mkt. Cap
34,000 searches per second
10 billion downloads
43 million iPhones sold since
            launch
>100K iPhone apps
 developed and 3
billion applications
    downloaded
500k iPads sold in
     week 1
521 mm Skype users
YouTube streams more than 1
    billion videos per day.




More people watch
 Hulu than Time
 Warner Cable
Facebook has 400 million users
               today.
If it were a country, it will be the
      3rd largest in the world.
Twitter is Exploding
                                                                          150.0 mm

                 ...
1 in 8 married couples in the US
       met online last year
Transportation then...
Transportation now...
Medicine then...
Medicine now...
Lighting then...
Lighting now...
Warfare then...
Warfare now...
Communication then...
Communication now...
Education then...
Education now...
...BUT times are changing
Education has substantially
       outperformed the market
15%
                  1999 - 2009 Performance
10%              ...
APOL $9.8 billion Mkt. Cap
$1.6 billion Mkt. Cap
$3.4 billion Mkt. Cap
$837 million Mkt. Cap
$1.4 billion Mkt. Cap
$1.6 billion Mkt. Cap
$1.2 billion Mkt. Cap
$1.4 billion Mkt. Cap
We’ve Seen This Movie Before

  Health Care as      Health Care as
    % of GDP          % of Mkt. Cap



      1970      ...
2009

Health Care as          Health Care as
  % of GDP              % of Mkt. Cap




    2009                    2009

 ...
2009

Education as %          Education as %
   of GDP                of Mkt. Cap



    2009                    2009

   ...
Exponential Times in Education
Mega- and Micro-trends in Education
Mega-trend                        Micro-trend

Knowledge Economy                 Incre...
Charter Schools Market
             $20

             $16                        GR
                                      ...
eLearning Market
           $120

            $96                             A GR
                                       ...
Edu Gaming
             $15

             $12
                                              R
              $9
           ...
Social Learning
               $5

               $4

               $3
     billion




                                 ...
Knowledge economy
   Fastest Growing Jobs by 2018
 1 Biomedical engineers
 2 Network systems analysts
 3 Financial examine...
Education is the “Civil Rights
      Issue” of Today
Control Alt Delete
US Education

1995          2002         2010E
Online      Online
 0%          10%        Online
                         ...
Network Effects
“Freeconomics”
Teacher as a Rockstar




At Megastudy, top teacher made $2
         million last year
Edu Convergence

 +

           Tomorrow’s
+         = Education
 +
Incremental
Transformational!
Evolutionary
Revolutionary!
Thank you!

www.nextupresearch.com
Education in a Rapidly Changing World
Education in a Rapidly Changing World
Education in a Rapidly Changing World
Education in a Rapidly Changing World
Education in a Rapidly Changing World
Education in a Rapidly Changing World
Education in a Rapidly Changing World
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Education in a Rapidly Changing World

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Education in a Rapidly Changing World

  1. 1. SkySong Education Innovation Summit "Education in a Rapidly Changing World" Michael T. Moe CFA Scottsdale, Arizona April 20-21, 2010
  2. 2. Fast Facts in Education...
  3. 3. Under 30% of U.S. adult population has a college degree
  4. 4. In China, it's less than 5%
  5. 5. To meet China's demand for higher education, we would need to build 10,000 Universities the size of University of Indiana
  6. 6. College graduates make over 110% more than high school graduates
  7. 7. 30% of 9-12 graders don't graduate from high school
  8. 8. For 17 of 50 largest school districts it's over 50%
  9. 9. and over 50% for African American and Hispanics
  10. 10. 2X more likely to be unemployed
  11. 11. 8X more likely to be in prison
  12. 12. Economic Impact is over $300 billion per year
  13. 13. That's the GDP of Kansas, Utah, Nebraska and Alaska combined every year
  14. 14. China will be the biggest English speaking country in the world in next 5 years
  15. 15. 1 in 4 workers leaves employer in less than a year
  16. 16. College graduates today will have 13 careers before they retire
  17. 17. India has more honor kids than the US has kids
  18. 18. India’s major exports are no longer Gems and Jewelry
  19. 19. it’s HUMAN CAPITAL
  20. 20. The top 10 on demand jobs in 2010 did not exist in 2004
  21. 21. We currently prepare kids for jobs that don’t exist yet
  22. 22. by using technologies that don’t exist yet
  23. 23. In order to solve problems we don’t even know about
  24. 24. 1 in 4 people prefers email vs. face- to-face communication
  25. 25. In 2020, that figure will be 3 in 4
  26. 26. The current workers will spend 10 years of their life dealing with emails
  27. 27. 2 in 3 social network sites are active during work force
  28. 28. Users spend 18.5 billion minutes a day on these sites
  29. 29. In 1790, 95% of jobs were agrarian
  30. 30. By 1900, 40% jobs were agrarian
  31. 31. Just 13% were high school graduates and 3% college graduates
  32. 32. Today, only 2% of jobs are farm related
  33. 33. The Past Isn’t a Prologue to the Future # of Companies in the Top 100 Biggest in the US Industry 1925 2009 Railroads 23 2 Metals 4 3 Autos & Parts 10 0 Information Technology 0 21 Financial Services 0 13 HC/Pharmaceuticals 0 16 Source: FactSet, Michael Milken
  34. 34. 35 years ago was the launch of the PC...
  35. 35. 20 years ago, the Berlin Wall came down
  36. 36. 15 years ago, Netscape went public...
  37. 37. 15 years ago, US was 50% of global market cap... Market 1995 Pop GDP Cap U.S. 260 Million $6 Trillion $7 Trillion World 5.6 Billion $19 Trillion $14 Trillion Source: CIA Factbook, Bloomberg
  38. 38. ...today it’s 28% Market 2010 Pop GDP Cap U.S. 307 Million $14 Trillion $13 Trillion World 6.7 Billion $60 Trillion $47 Trillion Source: CIA Factbook, Bloomberg
  39. 39. New Millennium Lost Decade
  40. 40. -5.6% per year in the market
  41. 41. Yet... Innovation Flourished
  42. 42. $175 billion Mkt. Cap
  43. 43. 34,000 searches per second
  44. 44. 10 billion downloads
  45. 45. 43 million iPhones sold since launch
  46. 46. >100K iPhone apps developed and 3 billion applications downloaded
  47. 47. 500k iPads sold in week 1
  48. 48. 521 mm Skype users
  49. 49. YouTube streams more than 1 billion videos per day. More people watch Hulu than Time Warner Cable
  50. 50. Facebook has 400 million users today. If it were a country, it will be the 3rd largest in the world.
  51. 51. Twitter is Exploding 150.0 mm 112.5 mm Users 75.0 mm 37.5 mm jun 08aug 08 oct 08dec 08 feb 09 apr 09 jun 09 aug 09 0 mm oct 09 dec 09
  52. 52. 1 in 8 married couples in the US met online last year
  53. 53. Transportation then...
  54. 54. Transportation now...
  55. 55. Medicine then...
  56. 56. Medicine now...
  57. 57. Lighting then...
  58. 58. Lighting now...
  59. 59. Warfare then...
  60. 60. Warfare now...
  61. 61. Communication then...
  62. 62. Communication now...
  63. 63. Education then...
  64. 64. Education now...
  65. 65. ...BUT times are changing
  66. 66. Education has substantially outperformed the market 15% 1999 - 2009 Performance 10% 11.9% 5% 0% -5.6% -0.9% -2.6% -5% -10% 10 Year CAGR NASDAQ Dow S&P 500 Education Stocks 71
  67. 67. APOL $9.8 billion Mkt. Cap
  68. 68. $1.6 billion Mkt. Cap
  69. 69. $3.4 billion Mkt. Cap
  70. 70. $837 million Mkt. Cap
  71. 71. $1.4 billion Mkt. Cap
  72. 72. $1.6 billion Mkt. Cap
  73. 73. $1.2 billion Mkt. Cap
  74. 74. $1.4 billion Mkt. Cap
  75. 75. We’ve Seen This Movie Before Health Care as Health Care as % of GDP % of Mkt. Cap 1970 1970 HC HC 7.6% 0.9%
  76. 76. 2009 Health Care as Health Care as % of GDP % of Mkt. Cap 2009 2009 HC HC 16.2% 12.9%
  77. 77. 2009 Education as % Education as % of GDP of Mkt. Cap 2009 2009 EDU 8.9% EDU 0.3%
  78. 78. Exponential Times in Education
  79. 79. Mega- and Micro-trends in Education Mega-trend Micro-trend Knowledge Economy Increasing investment in education Internet Online education Globalization • Opening of int’l markets in postsecondary education Outsourcing • Emergence of global brands School management, learning services, tech supplement Mobile Anytime/anywhere learning; knowledge into workflow Dual income families Parents seeking professional assistance with children/child care Increasing public investment in Standardization, increased accountability K-12 education Decreasing public investment in Market driven postsecondary education postsecondary education Digital natives Ubiquitous, invisible computing and gaming 84
  80. 80. Charter Schools Market $20 $16 GR CA .2% $12 10 billion $8 $4 $0 2010 2015 Source: NeXt Up Research 85
  81. 81. eLearning Market $120 $96 A GR C 5 .7% $72 1 billion $48 $24 $0 2010 2015 Source: NeXt Up Research 86
  82. 82. Edu Gaming $15 $12 R $9 CAG billion 5% $6 3 5. $3 $0 2010 2015 Source: NeXt Up Research 87
  83. 83. Social Learning $5 $4 $3 billion A GR $2 C 4 1% $1 $0 2010 2015 Source: NeXt Up Research 88
  84. 84. Knowledge economy Fastest Growing Jobs by 2018 1 Biomedical engineers 2 Network systems analysts 3 Financial examiners 4 Medical scientists, except epidemiologists 5 Physician assistants 6 Biochemists and biophysicists 7 Athletic trainers 8 Computer software engineers, applications 9 Veterinarians 10 Environmental engineers
  85. 85. Education is the “Civil Rights Issue” of Today
  86. 86. Control Alt Delete
  87. 87. US Education 1995 2002 2010E Online Online 0% 10% Online 25% 100% 90% 75%
  88. 88. Network Effects
  89. 89. “Freeconomics”
  90. 90. Teacher as a Rockstar At Megastudy, top teacher made $2 million last year
  91. 91. Edu Convergence + Tomorrow’s + = Education +
  92. 92. Incremental
  93. 93. Transformational!
  94. 94. Evolutionary
  95. 95. Revolutionary!
  96. 96. Thank you! www.nextupresearch.com

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