MARKETS FOR E LEARNING MUCH SMALLER THAN FORECAST BUT SET TO REACH $50BN BY 2010 Estimates indicate the global corporate market will spend $5bn annually on e learning, increasing to $50bn by 2010

Release of Report 25 November 2002: The Business of E-Learning

Suppliers and pundits greatly exaggerated the size and short-term growth prospects of
e-learning markets during the Internet boom; according to a new report by Screen Digest.
It estimates the corporate market in the US at $3.5 billion, and $5 billion globally, a third of what many have predicted. However, the urgent need for better approaches to learning and knowledge management and the enormous gains in effectiveness and cost made by a handful of early adopters point to a $50bn market by 2010.

Companies worldwide currently spend approximately $250bn annually on training. Much of this will shift to e-learning and other ways of networking knowledge," says Kieran Levis of Cortona Consulting, author of the report. However, the claims made for learning management systems and catalogue content were seriously over-stated, and the market forecasts outlandish."

Many companies have experimented with e-learning tactically, but the systematic use of IT to enable widespread formal and informal learning has so far been confined to a few early adopters, mainly in the ITC, financial services and consulting sectors. The outstanding examples include Cisco, Dell, IBM, Skandia, Merrill Lynch and Shell, What these companies have in common is that IT and knowledge sharing are critical to competitive success driven by the continuous need to brief large numbers of people on new products and processes.

European markets are much less developed than their counterparts in the US, mainly because the IT industry in Europe is much smaller and levels of Internet access and usage lower. There are also important linguistic and cultural differences, which make it difficult to standardize and sell content globally. European markets will grow faster over the next two years, as IT and knowledge-intensive companies catch up.

The markets that grew fastest up to 2001 were learning management systems and off-the-shelf content, which promised rather more than they actually delivered. Whereas in the future, growth will be higher in integrated systems, customized courseware, portals aimed at both learning and knowledge sharing, and hosted ASP services. The market share of a few large suppliers will rise significantly, but these markets will remain fragmented and it is unlikely that a small number of suppliers could dominate them. And although companies will continue to outsource a growing part of their training, they still need to control their own learning and knowledge strategies. The most valuable content is not generic but rather is frequently drawn from the companys own knowledge base.

However, there is a massive need for better approaches to learning and knowledge management. Screen Digest expects global corporate spending on e-learning to reach 20% of total training budgets by 2010, creating a worldwide market worth $50bn annually.

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EDITORS NOTES

An executive summary of the report is available on request. The report contains over 170 pages of text, charts and tables. Interviews with the author of this report can be arranged on request.

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