Education is one of the broad themes we are hoping to pursue with Start@Spark.  It’s an area that we think has huge potential to be transformed by technology, and where the lessons learned in the media, entertainment, and consumer internet spaces can and should be applied aggressively.  Moreover, improving the access and quality of education (both domestically and across the world) is a priority we all believe in at Spark.

There are a lot of folks who write great analysis on the education system – it’s obviously a complex and meaty topic.  But there are three primary observations that drive our enthusiasm for this segment:

1. Gaps in performance and access

Much has been written on the performance gap in the US public education system vs. the rest of the world.  I won’t rehash all the data here (there is a nice Mckinsey study that is available with some good analysis here).  But some interesting points:

– We are well behind our peers internationally: 17 countries have both higher average achievement AND lower income based inequality than the US.

– There is a very wide gap based on socioeconomic  factors: A nine year old from a low income family is already 3 years behind their high income peers and has a 1 in 2 chance of graduating high school and 1 in 10 chance of finishing college (see more from Bijan’s blog post on his lunch with US Senator Michael Bennet)

– Closing these gaps have huge economic potential: By linking education to output, the Mckinsey study estimates that closing the income achievement gap could boost GDP by 3-5% annually

2. High (and increasing) cost across the education value chain

– The cost of delivering K-12 education in the US is the highest in the world: The US spends more per point of achievement than any other country, and 60% more than the average for OECD countries

– The cost of higher education continues to grow rapidly: From 1982-2007 the cost of higher ed has increased 439% while median family income only rose 147%.  And the pace if increase is accelerating.  More from the New York Times here

– The cost of textbooks are increasing rapidly as well: Textbook prices have been rising steadily by 6% annually (well ahead of inflation) as textbook publishers struggle to maintain margins.  Moreover, the pace of new editions has accelerated to combat the prevalence of used textbooks in the market.

3. Pace of Innovation Has Lagged

The way that education is being delivered has not changed nearly as much as other forms of content and information.  10 years ago, music was largely delivered through physical CD’s and online file sharing was in its infancy (with no legitimate options).  10 years ago, news content was delivered largely through print or local television and the content that was available online could not be easily shared or syndicated.  10 years ago, entertainment content on television could not be time shifted and was not available on demand through the internet and on mobile devices.

Today, these industries and many others have been radically transformed through the increase in broadband penetration and capacity.  However, the delivery of education content has remained largely the same.  Students still largely receive instruction from teachers in a 1-size-fits-all broadcast fashion.  Physical textbooks are still the core educational tool.  Collaboration is largely confined to students within the same classroom in person, when the same content is actually being learned across the country and the world.

Thus far, our education system has not taken full advantage of technology to deliver education in a way that is as personalized, interactive, and collaborative as it could be.  We think that this is bound to change in a big way.  We are already seeing the beginnings of this with innovative forms of content deliveryand online educational experiences.  In our portfolio, we have invested in a company called 8D world, which is developing an immersive virtual world for language learning that has a heavy emphasis on listening comprehension and oral fluency (something largely missing from the language learning curriculum in the company’s target market).  But these are tiny steps in an industry that is in huge need of reform.  We hope that through Start@Spark we can find great entrepreneurs tackling some of these problems and others that we haven’t yet begun to think about.