2U also isn’t alone in thinking that alternative and micro-credentials are poised for big growth. The education market intelligence firm HolonIQ projects this sector (which reeled in just $10B globally in 2019) will double in 3-5 years while the broader ed-tech space will see annual growth rates in the mid to high teens during the next five years.
“We expect the degree business to continue its strong performance and the alternative credential segment to continue to grow faster than the market,” Paul Lalljie
, 2U’s CFO, said during the company’s last earnings call, referring to the ed-tech market as defined by HolonIQ.
The company is hearing three common, interconnected themes, Chip Paucek
, 2U’s CEO, said
- More of a focus on better serving nontraditional, working adult learners who are looking for both degree and non-degree offerings.
- Pressure on higher education to identify new and sustainable revenue streams at the same time institutions are facing inescapable budgetary and investment constraints.
- Growing demands from business and government for colleges to better align skills-based training with in-demand jobs and to create career-focused pathways.
Paucek said these themes reflect structural changes that will continue to shape higher ed after the pandemic. Demand for non-degree, career-focused and skill-based post-secondary education was growing rapidly before the pandemic, he said, in part because alternative credentials help meet critical societal needs:
“The economic toll of COVID, particularly on women and Black and Brown communities has been devastating, only furthering demand for these kinds of alternative credentials,” Paucek said. “Even workers who were able to remain employed during the pandemic have seen their companies rapidly pivot to digital and embrace e-commerce in order to survive. So these workers also need to learn new skills to stay relevant.”
As a result, 2U is expanding its portfolio of short courses focused on functional and leadership skills as well as emerging and disruptive technologies. Examples include a new course offered with Northwestern University on leading racial equity and inclusion in organizations, and one on telehealth strategy, implementation, and optimization with the Stanford University Center for Health Education.
Likewise, most students who enroll in a 2U-powered boot camp are early- or mid-level professionals who are looking to pivot to a tech career. The boot camps are offered online, with live classes on evenings and weekends.
The average age of 2U’s boot camp students is 32, according to Jennifer K. Henry
, the company’s SVP of workforce engagement, with 45 percent self-identifying as BIPOC
, and 30 percent not holding a bachelor’s degree.
2U recently released results of an alumni survey
conducted with Gallup, which found solid career outcomes after graduation. More than 6,000 employers have hired graduates of 2U’s online boot camps.
Last month 2U shared details about Stephen Powell
, 32, who enrolled
in George Washington University’s data analytics boot camp, which is powered by the company. Powell, who has not attended college, recently got a job as data analyst for a tech startup. He said he needed technical training but didn’t have four years to get a degree.
“I’m not formally educated and I’m Black. Those are two things that work against me,” said Powell. “I understand I didn’t go through a four-year program. But I think you can learn a lot from someone who has gone through this boot camp, willing to learn and work at the same time.”