Edtech, or the use of digital technology tools for education, particularly including online learning, promises to be an important contributor to India’s economic development. India’s education system has suffered from inadequate resources, outdated curricula, rigidity, and poor incentives. The New Educational Policy of 2020 and its immediate predecessors marked some fresh thinking in the direction of improving learning processes and increasing flexibility. Given the challenges of the implementation of change in the public sector, Edtech can play a major role in revamping the Indian educational system.

The pandemic obviously gave edtech an enormous boost. Those with access to the internet and the means could substitute for the absence of in-person education. Billions of dollars of new investment flowed into edtech, creating several new unicorns. Over three-quarters of the new investment went into test preparation startups. This is not surprising, since doing well in school-leaving examinations and in entrance examinations for prestigious university courses and government jobs is vital in a country with an extreme scarcity of positions in universities and in employment. In this case, in the short run, edtech just exacerbated the worst features of the Indian educational system.

As the constraints created by the pandemic have wound down, there has been a return to in-person learning, and the weaker edtech startups have been retrenching or shutting down. In other cases, the strongest firms, like BYJU’s, have been making acquisitions, and this consolidation is a welcome development in an industry with thousands of new entrants. One feature of the industry is its competitiveness, and the ability of students to choose and switch based on the value they are getting is an important new feature of Indian education. This is true on the whole, even though there is some degree of lock-in when students begin a course and find that it is not what they expected. The new normal involves hybrid solutions and a world where students can choose between online and in-person offerings for segments such as test preparation.

In other areas, edtech offers even more benefits—certification, upskilling and skill development are all important features of a modern economy, and online access to content and instruction is often the only feasible option for those who cannot take time off from work, or travel to a physical site after a full workday. Edtech also offers considerable scope for enrichment education (such as music) for younger children of higher-income households-again, the nature of transport and distance in many Indian contexts means that traditional home tutoring at the high end is no longer viable.

One very important aspect of edtech lies on the supply side. A more competitive, inclusive, and flexible model on the supply side will mean that those who are appropriately skilled and good at teaching will thrive more. Others will have an incentive to improve their teaching, since they will be more readily rewarded for delivering better quality. In this sense, teaching is different from other forms of the gig economy. Education is a much more differentiated service, both in types of knowledge being imparted, and levels of knowledge and skill.

Another factor in favour of edtech is the ability to use recorded instructional material. This increases time flexibility and economises on time, since the same lectures do not have to be given over and over in real time. This is the foundation of massive open online courses (Moocs), but there is much more scope for the use of recorded lectures in hybrid formats, especially in university settings. US universities began to pursue this avenue during the pandemic, combining live online delivery with lecture capture, and that has continued with a return to in-person. A student might even be able to choose between three options-being in the classroom, watching a lecture live online, or watching the recording subsequently. Even before the pandemic, instructors were experimenting with pre-recorded lectures and “flipped” classrooms. One has the sense that India can do much more with these innovations, perhaps through partnerships between edtech firms and universities.

Competition and the need to maintain reputation can help control quality problems. But affordability and access can be casualties of innovation unless they receive explicit attention. Some degree of cross-subsidisation through financial aid can help, though verification of need can be difficult. Better public digital can be very important in leveling the playing field, and subsidising devices for poorer students can also be a workable policy. CSR goals in edtech have a natural expression in aid for students needing it. One avenue that can be very problematic, however, is the involvement of global tech giants like Meta, which offer what seems like attractive options but will lead to future lock-in and monopolistic control. If foreign expertise and financial capital are needed, Indian educational providers might instead do better with university partners from abroad.