I have been arguing that we live in an era of technological deflation driven by advances in computing (including robotics). In the US, the prices for consumer durables peaked in the mid 1990s as this chart from the St. Louis Fed shows. There are still ways in which monetary policy and potentially the price of energy could throw a wrench into this overall trend but what I want to write about today and tomorrow are the potential for price declines in two other areas: education and healthcare.

At USV we became interested in education as an investment opportunity in 2009 when we held a one day conference titled “Hacking Education.” Since then we have invested in Edmodo, Codecademy, Duolingo and Skillshare. General interest in various forms of online education has been growing rapidly since then. Here is one proxy, a Google Trends chart for the search term “mooc” (as in Massively Open Online Course):

Formal online courses such as edX or Khan Academy are only one component of the expanding universe of available resources for learning though. There are also individual blog posts explaining a specific topic or even a series of posts, such as the one I did right here on Continuations as Tech Tuesdays. And of course there is Youtube which is full of educational videos on subjects as broad as sailing and quantum computing.

While it is too soon to declare a victory over the cost of education, there is some evidence that the exorbitant rises in tuition cost over the years in the US, which has far exceeded general inflation, are beginning to slow down. When looking at this data it is important to keep in mind that there is a huge amount of inertia in these systems. Many employers still think they need to hire from the best universities and this drives expense and cost justification in the educational system all the way back to private nursery schools.

It will be quite some time before a majority of students think that they can do some or even all of their learning based on free or extremely affordable online resources. But it seems like we are off to a good start.

PS I am interested in adding more data on this topic for an upcoming talk. In particular any recent quantitative studies on the growth in open educational resources would be super helpful.