Market insights

AIED Market Overview

In the era of digitalization, artificial intelligence (AI) is one the fastest evolving technology across the globe. Artificial intelligence has potential to reduce the human effort and increase productivity, thus has vast applications in various sectors like finance, healthcare and manufacturing. AI benefits the education sector with features such as personalized learning, additional educational support and assessment and student engagement. In education sector, the application of AI technologies has been the subject of research for 30 years. However, AI in education is still in a primitive stage which is expected to have many more advancements in the forthcoming years.

In order to support learning and formal education, AI technology is applied in every field where learning occurs, in traditional educational institutes or in workplaces. Artificial intelligence helps to promote the development of learning environments and other AI tools that effective, engaging and personalized. Additionally, government initiatives to improve the quality of education and increased expenditures to modernize the education sector by deployment of various AIEd programs will help North America to dominate the market in coming years.

market Size & Forecast

The Artificial Intelligence in Education (AIEd) market is expected to grow at a CAGR of 43% during the forecast period due to rising need for implementation of advanced technology to achieve education objectives, such as enhancing efficiency and effectiveness of learning. MarketsandMarkets forecasts the AIEd market to grow from USD537 million in 2018 to USD3,683 million by 2023.

The shift of educational sector towards smart technology products and services to modernize conventional education methods has opened broad growth avenues for artificial intelligence market globally. Growing number of universities, educational institutions and trend of online education platforms provides smooth pavement for the growth of AI market in education sector. Introduction of advance teaching systems like ITS (intelligent tutoring systems) and its active adoption in educational sector is one of the primary factor driving the growth of market. The ITS system is designed to provide critical ideas, interpret human responses and personalized learning for each student. Favorable government policies to modernize the educational system and increased expenditures will provide growth to AI in education market.

AIED Segment

By End-use

The higher education sector accounts for more than 50% share in the AIEd market. The higher education institutes are shifting to AI to assist them with course recommendations, administrative assistance. The benefits offered to the students include personalized learning, career path options, and the provision of smart classrooms. Various private and public colleges and universities are adopting advanced educational services, accelerating the growth of the AIEd market.

By Deployment

The on-premise deployment model held over 80% share in the AIEd market share in 2017 as the deployment provides robust functionality and superior data security. Cloud deployment is estimated to grow significantly during the forecast period at a CAGR (the compound annual growth rate) of over 50%. The popularity of the outcome-based lease model is propelling the demand for the cloud-based systems.

By Technology

Based on technologies, the AIEd market is divided into machine learning, deep learning, and Natural Language Processing (NLP).

NLP is now leading the technology landscape with approximately 65% share in the AIEd market. The integration of NLP technology in educational institutes not only assists in developing an effective digital content, but also helps in improving curriculum, the assessment process and the academic performance.

Machine learning and deep learning held over 20% of the AIEd market share in 2017. The technology offers a systematic way to analyze the progress of students from their performance data, and generate a customizable learning experience, student path prediction, and suggested learning path, identifying the weaknesses and analyzing the areas that require improvement. Furthermore, the technology also assists in developing an unbiased grading system and feedback mechanism for both students and teachers. This technology is becoming crucial for understanding educational patterns and suggesting changes and reforms to classrooms and teaching methods. The machine learning and deep learning technology segment is expected to have the larger market size during the forecast period.

By Application

The integration of the e-learning platforms and the advanced technologies, such as augmented reality (AR), virtual reality (VR) and AI in the education sector, are the primary factors driving the AIEd market growth. Lu & Hein (2018) notes that applications of AI-based education technology include the following:

• Tutoring. AI programs commonly referred to as Intelligent Tutoring Systems (ITS) or adaptive tutors engage students in dialogue (i.e. Chatbots), answer questions, and provide feedback.
• Personalizing Learning. ITS and adaptive tutors tailor learning material, pace, sequence, and difficulty to each student’s needs.
• Testing. Computer adaptive assessments adjust the difficulty of successive questions based on the accuracy of the student’s answers, enabling more precise identification of a student’s mastery level.
• Automating Tasks. AI can perform routine tasks such as taking attendance, grading assignments, and generating test questions.

The growing trend that is gaining traction is virtual tutors and virtual classrooms. The demand is driven by the improvements in the bandwidth (saying 5G) and collaboration technologies that enable the virtual model to turn into a practical solution for learning efficiently and cost-effectively.

By Model

The learner model accounts for more than 60% AIEd market share in 2017.

Kay (2012) states that one of the most common AIEd model is the learner model (illustrated below), which represents the knowledge of learners such as the students’ emotional state, previous failures, achievements, and their engagement capabilities in learning. It represents the interactions that happen between the learner and the computer, which are then utilized by the domain and pedagogy models to determine the success of the learner.

The adoption of the adaptive learning technology by the market players to develop student-centric learning platforms is the primary factor supporting the AIEd market growth. The technology is being used by the market players for designing the digital content and modifying the content as per the students’ requirement. Furthermore, the capabilities of the adaptive learning technology are also being integrated into the learning platforms to assist students in the learning process and track their progress.