Education and entrepreneurship can change lives – and deliver opportunities for investors

Education and aspiration

Education is a powerful agent of change, especially when it includes the most disadvantaged. At the individual level, it can improve livelihoods and we believe it can even improve life expectancy. At the country level, it contributes to social stability and can stimulate long-term economic growth.

The United Nations Sustainable Development Goal 4 (SDG 4)¹ reflects this and aims to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all” by 2030. Unfortunately, according to the United Nations² , the COVID-19 pandemic has reversed the progress achieved in education, with an additional 100 million children worldwide now below the minimum reading level required for their age.

Diversity of opportunity

The challenge in education is twofold. First, there is a need to widen access and draw in everyone, young and old, in an equitable and continuous manner. Second, there is a need to develop quality and effective learning methods. New players, particularly in education technologies (edtech), are now offering students low-cost solutions for more effective and personalized learning.

The online student support platform Chegg has claimed millions of subscribers.The platform provides services to students who are facing pressure in school. Indeed, many students juggle education with a part-time or full-time job to pay for their studies, and it is not uncommon for them to decide to throw in the towel. The company offers free modules, such as one in financial education aimed at helping students manage their budget.

An example of a less-traditional, but fashionable for of education is the “learning while having fun” concept. This has helped Norwegian learning platform Kahoot!. Originally designed for social learning, it is now used as an edtech resource by educational institutions. Kahoot! includes online multiple-choice quizzes and questionnaires, in individual or group-play formats.

Another related platform is IDP Education, an Australian company that offers student placement services, international English language testing, and English language teaching services around the world. In 2019, IDP Education placed a record number of students in universities, a majority of which are from emerging countries, particularly in Asia.

At the other end of the spectrum is Bright Horizons, a company that has been providing comprehensive childcare and early education services for over 30 years. It aims to offer quality solutions, often subsidized by employers, providing children with access to an early learning environment and quality supervision from a young age, while giving parents a way to better reconcile their work-life balance.

Supporting small business

Another important goal within the UN SDGs is decent work for all and economic growth³ , with particular emphasis on entrepreneurship. G8⁴ aims to stimulate the growth of micro-enterprises and small/medium-sized enterprises. AXA IM believes supporting entrepreneurship encourages innovation and creativity. When they find success by responding to new needs, these micro enterprises create jobs and can help revitalize a region or country. In the U.S., the share of GDP attributed to companies with less than 500 employees has been falling, but the last measure still accounted for 44%⁵ of the national economy and approximately 47%⁶ of women employees.

Etsy, the international online platform where people buy and sell non-mass-produced items, is both an entrepreneurial venture and a hub for new entrepreneurs. With products accessible to consumers around the world, Etsy is for self-employed makers of unique gifts and collectibles. It charges fees to post product catalogs and a further levy on transactions as it seeks to boost the profiles of its sellers.

Additionally, the all-in-one digital payment solutions offered by Square has been a fintech player. It has been particularly popular among independent traders and individuals and its services include mobile payment terminals, an app that allows money transfers between individuals, and – more recently – banking services. Square’s strategy has been to directly target small businesses, until now largely neglected by traditional players.

Education and entrepreneurship are two sides of the same coin. They represent important drivers of social mobility.