Pearson and Cebr research: £8.7 billion benefit for UK economy from investment in technology in schools

Rhea-AI Summary

Pearson (PSON.L) and the Centre for Economics and Business Research (Cebr) released a report showing that a £130 million annual investment in school technology over the next decade could generate up to £8.7 billion in economic benefits for the UK, with a return of £7.90 for every £1 invested.

The analysis focuses on three key areas: device provision, broadband improvement, and teacher training. Key benefits include:

• £900 million in teacher time savings in the first year
• £200 million in additional earning potential by year 10
• £180 million in economic productivity benefits by year 10
• Two million kg of CO2E savings by year 10

Current challenges include insufficient device provision in schools (only 34% of secondary and 31% of primary schools have adequate devices), slow internet speeds, and teacher training in digital skills. Pearson plans to launch a Digital in Schools project in 2025 to help unlock EdTech benefits.

Positive

• £8.7 billion potential economic benefit from £130 million annual investment
• High ROI of £7.90 for every £1 invested
• £900 million in teacher time savings projected for first year
• £200 million additional earning potential by year 10
• £180 million in economic productivity benefits by year 10

Negative

• Only 34% of secondary schools have sufficient devices
• Only 31% of primary schools have sufficient devices
• 27% of secondary schools report slow internet speed
• 36% of primary schools report slow internet speed
• 24% of teachers lack confidence in digital skills

Insights

Market Research Analyst

The Pearson-Cebr research reveals a compelling £8.7 billion ROI proposition for UK educational technology investment, with a remarkable £7.90 return for every pound invested. The analysis demonstrates strong economic fundamentals through three key metrics: teacher productivity gains (£900 million in year one), enhanced workforce earnings (scaling to £200 million by year 10) and broader economic productivity benefits (reaching £180 million by year 10).

The current infrastructure gaps are substantial - only 34% of secondary schools and 31% of primary schools report adequate device provision. This creates a significant addressable market for Pearson's educational technology solutions. The company's strategic positioning to capture this opportunity through its 2025 Digital in Schools initiative could drive meaningful revenue growth in the UK market.

Education Technology Specialist

The research identifies critical gaps in the UK's educational technology infrastructure that present substantial opportunities for Pearson's digital transformation solutions. The proposed annual investment of £130 million is relatively modest compared to the potential returns, suggesting a highly efficient use of resources.

The most compelling aspect is the focus on comprehensive digital transformation across devices, connectivity and teacher training. The current statistics - 27% of secondary schools and 36% of primary schools reporting slow internet, combined with 24% of teachers lacking digital confidence - indicate significant room for Pearson's integrated solutions. This positions Pearson favorably to capture market share in the growing EdTech sector, particularly as schools transition toward digital assessment formats.

Financial Analyst

From an investment perspective, this research strategically positions Pearson (PSO) to capitalize on the UK's educational digital transformation. The company's market cap of $10.65 billion suggests it has the scale to execute on this opportunity. The projected £8.7 billion market opportunity represents a significant potential revenue stream, particularly given Pearson's established presence in the UK education sector.

The ROI metrics are particularly compelling - a £7.90 return per pound invested demonstrates strong economic viability. This could translate into sustainable revenue growth for Pearson, especially considering the recurring nature of educational technology spending. The company's planned 2025 Digital in Schools project appears well-timed to capture this market opportunity.

LONDON, Jan. 9, 2025 /PRNewswire/ -- An annual investment of approximately £130 million a year in technology in schools over the next decade would deliver an economic benefit to the UK of up to £8.7 billion. For every £1 invested, technology in schools would bring a return of up to £7.90, benefiting both the education sector and the growth of the economy.

Pearson and Cebr research: £8.7 billion benefit for UK economy from investment in technology in schools

These findings are from a new report commissioned by Pearson (FTSE: PSON.L) the world's lifelong learning company and produced by the Centre for Economics and Business Research (Cebr). The research highlights the transformative economic and educational benefits of investing in digital transformation within UK state-funded schools and the stronger role it could play in both curriculum and assessment.

Using Pearson's digital transformation framework for UK schools, the Pearson-Cebr analysis found that strategic investment across three main areas – device provision, broadband improvement and teacher training – could deliver substantial improvements including:

• Teacher time savings of around £900 million in the first year alone – freeing up teachers' time equivalent to almost five average working weeks.
• Additional earning potential for new entrants to the labour market – this would increase from under £7 million in year one to around £200 million by year 10 thanks to improved skills through the use of EdTech underpinning higher student attainment.
• Economic productivity – wider economic benefits from a more skilled workforce would see returns starting at around £6 million in the first year and rising to around £180 million by year 10.
• Positive environmental impact – potential for nearly two million kg of CO2E savings by the tenth year of the appraisal period – that's enough to power hundreds of households for a year.

Sharon Hague, Managing Director of Pearson School Qualifications said: "Investing in digital transformation within our schools is an investment in our future. The benefits of technology extend far beyond the classroom – helping underpin student outcomes, freeing up teacher time and driving economic growth too.

"With discussions ongoing about the future of curriculum and assessment, we believe it's crucial to look at the benefits that technology can unlock for schools, students and the economy. Our goal with this work is to progress these conversations and identify practical suggestions. Strategic investment in both infrastructure and teacher training will support UK state-funded schools to make better use of technology, better prepare students for future life and work and ultimately, help to build a more productive workforce."

Elizabeth Anderson, Chief Executive of the Digital Poverty Alliance said: "Children learning today are entering a digital world tomorrow, with the pace of digitisation and tech growth at an unprecedented level. This report shows the power of giving young learners access to tech in the classroom – which we feel is especially important for those living in lower income families without a laptop at home on which to learn or complete education. Combining this with meaningful teacher training on providing digital skills has the opportunity to transform the futures for millions of young people who can forge a better future if given the knowledge and confidence to succeed in accessing jobs that are ever more reliant on tech."

Sam Miley, Managing Economist and Forecasting Lead at Cebr said: "Our report highlights the benefits that could be accrued through increased investment in EdTech. These benefits grow over time and begin to outweigh the costs by several multiples. At a time when productivity growth in the UK is feeble, particularly in the public sector, this presents an attainable approach to improving skills and both educational and labour market outcomes."

What's needed
Cebr-Pearson analysis drew on existing research across the sector to define what technology and training was needed for schools. This includes:

• additional device provision – currently just 34% of secondary schools and 31% of primary schools say they have a sufficient numbers of devices
• an overhaul of broadband for schools – slow internet speed is reported at 27% of secondary schools and 36% of primary schools
• training of 20+ hours per teacher – for example, currently 24% of teachers consider a lack of confidence in their digital skills to be a barrier to using technology in learning
• teaching and assessment of the digital skills that young people need for the future
• additional exam formats – currently only pen and paper are used in the majority of exams.

Pearson now calls for a national strategy for the deployment of technology in schools. In 2025, Pearson will launch a wider Digital in Schools project – guided by research, insights and practical suggestions to help unlock the benefits of EdTech in schools.

Explore the Pearson-Cebr summary report
Explore the full Cebr report findings 

Media Contact:
anna.osullivan@pearson.com

About Pearson
At Pearson, our purpose is simple: to help people realize the life they imagine through learning. We believe that every learning opportunity is a chance for a personal breakthrough. That's why our c. 18,000 Pearson employees are committed to creating vibrant and enriching learning experiences designed for real-life impact. We are the world's lifelong learning company, serving customers in nearly 200 countries with digital content, assessments, qualifications, and data. For us, learning isn't just what we do. It's who we are. Visit us at pearsonplc.com.

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SOURCE Pearson

FAQ

What is the projected ROI of Pearson's (PSO) school technology investment in the UK?

According to the Pearson-Cebr report, every £1 invested in school technology would bring a return of up to £7.90, with a total benefit of £8.7 billion to the UK economy over a decade.

How much teacher time savings will Pearson's (PSO) technology investment generate?

The investment is projected to generate teacher time savings of around £900 million in the first year alone, equivalent to almost five average working weeks.

What percentage of UK schools currently have sufficient devices according to Pearson's (PSO) report?

According to the report, only 34% of secondary schools and 31% of primary schools say they have sufficient numbers of devices.

What are the long-term economic benefits of Pearson's (PSO) school technology investment by year 10?

By year 10, the investment is projected to generate around £200 million in additional earning potential and £180 million in economic productivity benefits.

What environmental impact will Pearson's (PSO) school technology initiative have?

The initiative is projected to save nearly two million kg of CO2E by the tenth year, equivalent to powering hundreds of households for a year.