01/06/2015 05:04 pm ET Updated Mar 08, 2015

Edtech Investment Is at Record Levels -- Where Is All the Money Going?

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US educational technology companies raised a total of $1.36 billion in 2014, according to a recent report in EdSurge. But very little of that technology is likely to end up in the K-12 classroom as part of the teaching-learning process that education is supposed to be about. Why is this, should we worry, and can we do anything to change it?

$1.36 billion is, after all, a lot of money. In fact, that 2014 figure is an all-time record. But it's not an anomaly. The figure for 2013 was $1.2 billion, just a little lower. So however you look at it, a lot of money is now regularly going into edtech.

In fact, the bulk of those investment dollars go into higher education. The K-12 market has long sales cycles and is dominated by a small number of entrenched incumbents, which make most of the big-player investors unwilling to put funds into edtech for schools. As a result, the total invested in K-12 educational technology in 2014 was relatively tiny: a mere $642 million, a figure that was already up 32 percent from the previous year. Moreover, just 10 investments accounted for over half the funding.

Those K-12 figures come from a report published by New Schools Venture Fund, one of the larger players in the K-12 investment world.

The situation may be starting to change a bit. In 2014, a few of Silicon Valley's top-tier venture investors dipped their financial toes into the K-12 market for the first time in over a decade, putting funds into companies such as Remind, Edmodo, BrightBytes, and Clever.

That those companies had started to gain a sufficiently strong foothold in the K-12 market to attract substantial investment indicated that they were clearly providing products that sufficiently many schools and school districts, in particular, were finding useful. But how many those new products were for instructional use in classes, and do teachers show any sign of wanting to use them? So far, the signs are not encouraging.

As a mathematician, I'll take math teachers as my example. Mathematics is, after all, an obligatory discipline throughout K-12 education, and any use of mathematics post-school is likely to involve technology use. What is more, mathematics education offers considerable potential to be enhanced by new technology. So it should provide as good a canary as possible for any imminent revolution (or disruption, or innovation) in the educational coalmine.

The National Council of Teachers of Mathematics (NCTM), the dominant US professional organization for math teachers, has the use of technology in classrooms as a main pathway to improving learning. The NCTM's Principles to Actions says, on page 5: "An excellent mathematics program integrates the use of mathematical tools and technology as essential resources to help students learn and make sense of mathematical ideas, reason mathematically, and communicate their mathematical thinking."

So one way to find out what the vanguard of K-12 mathematics teachers are doing in their classrooms -- and are planning to do -- is to look at the list of presentations given at the huge annual NCTM meeting. How many of those presentations are about, or at least make reference to, technology?

Ihor Charischak, president of the NCTM-affiliated Council for Technology in Math Education, has done just that. He released his findings in a recent blogpost.

According to Charischak, at the NCTM Annual Meeting to be held in Boston, MA, next April, there will be 733 sessions. He combed through them and identified just 97 that highlight technology in some form. At 13.2 percent, not only is that low, it indicates a continuing drop in interest in educational technology. At last year's NCTM Meeting in New Orleans, 21 percent of the sessions were technology-oriented, a year earlier, in 2013 in Denver, 28 percent of the sessions had a technology theme, and the year before, in Philadelphia, there were 38 percent tech sessions, an all-time record.

Not only is there relatively little evidence of teacher interest in incorporating any kind of technology in the classroom, but the trend is clearly down. Moreover, what technology interest Charischak could identify was hardly in new technologies: It was predominantly the use of handheld calculators and Computer Algebra Systems (like Mathematica), which where highlighted in the title or abstract of just 15 sessions.

What these data show is that, to date, practically all that much-hyped edtech funding has had virtually no direct impact on what goes on in the K-12 math classroom. Overall, K-12 math teachers are not incorporating new technology in their teaching.

True, the more progressive ones do incorporate the occasional technology product into their lessons, to help their student master difficult concepts. But, with little freedom and no institutional purchasing power, they overwhelmingly go for supplementary apps they can download for free (or are cheap enough to pay for themselves) on the Internet.

That indicates massive untapped potential for classroom edtech, but free educational apps do not offer investors an attractive financial opportunity. Instead, they focus overwhelmingly on the organizational tools bought by the people in education that do have purchasing power: the learning management systems, data collection and analysis packages, and student performance dashboards, bought by system administrators.

Those technology products can make K-12 education more efficient and perhaps more cost effective. But student learning takes place in the classroom, with a teacher. If we truly want to make dramatic improvements in school education, we have to find a way to redirect the bulk of edtech funding into the development of tools that teachers can use in their classes. That means making the creation of curriculum products by for-profits a much more attractive proposition for an investor. It's hard to see how that could be achieved without some form of government incentives.

For sure, quality learning tools have been produced (the math learning tools from the non-profit MIND Research Institute are a great example), and will continue to be made, even if we leave the current system as it is. But progress will be painfully slow. Genuinely revolutionizing K-12 education within a decade requires a transformative, national, public-private initiative, perhaps reminiscent of, but much less expensive than, the NASA Apollo Project to put a man on the Moon.

How badly do we want 21st-century-relevant, first-class education for the nation's children?