Research into the online learning and artificial intelligence education markets and their effectiveness in supporting the development of skills in the English workforce.

Findings from a study which examined the effectiveness of the online learning and artificial intelligence in education markets.

Dimensions of the online learning and AIEd markets

The study identified over 200 providers’ delivering online learning for adult learners with low-intermediate skills in England. This includes nearly 100 private training providers (comprising professional bodies, awarding organisations, specialist online learning providers, and work-based learning providers), over 50 FE colleges, and 22 MOOC platforms. HE providers deliver few online courses, but many are working in partnership with MOOC platforms.

There are nearly 400 developers of online learning (excluding MOOC platform developers). Most develop online learning products which could generally be classified as: online learning management systems (LMS); authoring software and platforms; and online content for teaching and learning.

Out of 400 developers, only six explicitly produce AIEd products and few providers stated they delivered AIEd courses.

However, there is evidence from the researcher interviews that many developers that consider themselves online learning developers may be embedding AIEd into their existing products.

Similarly, providers using LMS systems or online learning products may be using AIEd but do not consider themselves AIEd providers.

Structure and context of the market

The delivery of online learning is relatively well-established in the UK, with some providers delivering these courses since the 1990s. Take-up increased substantially in the 2000s and grew again in 2010 following with the expansion of MOOC platforms.

During this time significant research was undertaken on AIEd, but until recently there have not been many commercial applications that use AIEd.

There have been some policy initiatives in the last 25 years to increase the use of technology in education. However, in the last eight years there has been limited interventions from Government to encourage FE providers to prioritise online learning.

There has also been little consideration given to the ethics of how AIEd should be used in education, particularly in the context of ensuring transparency of AI decisions-making.

The online learning market is relatively straightforward to access. There are no regulatory or financial barriers for providers to deliver qualifications online, and the availability and affordability of online authoring tools means online or blended courses can be developed relatively quickly.

Developers similarly reported few barriers to entering and expanding in the online learning market. Although there are some upfront R&D costs to develop new products, this is commonly used to create a template which allows further products to be created relatively efficiently.

Providers did however report that a lack of teacher skills in using online learning authoring tools and understanding effective online pedagogies was inhibiting their ability to expand their online offer.

Some providers also reported that teachers had limited time to develop new courses which slowed developments in some subject areas.

The AIEd market was felt to be more difficult to enter. Developers reported that there were relatively high R&D costs for developing AI products, including the recruitment of AI specialists. This coupled with lack of demand has led to the undersupply of AIEd products.

Providers and developers of online learning courses generally have ample means of distinguishing their products from their competitors. They can vary the course content/learning styles, the level of support provided to learners/employers, and the quality/interactivity of the user interface.

This enables developers and providers to be rewarded for improving quality and innovating. AIEd developers have fewer opportunities to distinguish their products, as the AIEd algorithms are not easily explained to potential customers. This presents a challenge for the market as customers have difficulty identifying quality AIEd products.

Provider market conduct

FE and HE providers do not generally regard online learning as a priority and few planned to expand their online learning offer to reach a wider geographical area. Most provision was developed organically to meet a local need rather than as part of a coordinated strategy.

However, there are a wide range of private providers and MOOCs that specialise in online learning and have plans for expanding their market share.

Most providers also have little knowledge or understanding of AIEd. Some believe it would lead to less personal interactions between tutors and learners, whereas examples of best practice currently show AIEd can facilitate more interaction.

Most of the organisations working with public-funded providers reported little demand for support on AIEd at present.

Developer market conduct

Nearly all developers regarded online learning as a key part of their business and had plans to expand their offer. Most of the developers that were interviewed specialised in 10 producing online learning management systems and courses for employers.

This was largely because the employer market was considered more profitable and had greater growth potential.

Most online learning developers did not consider AIEd a priority. There was generally some scepticism towards the technology, with some feeling it is ‘a fad’. Most also reported that there was relatively little explicit customer demand for AIEd which meant they had little incentive to develop AIEd products.

Some are instead prioritising developments in Virtual Reality (VR) and Augmented Reality (AR), which they believe could have a transformative effect on the sector.

Market performance

Online learning and AIEd programmes, particularly when delivered by MOOC platforms or private training providers, were mostly undertaken by graduates and individuals in employment. FE and HE providers however reported that their online learners generally reflected the demographics of their local area.

The general consensus among interviewees is that online learning can provide significant benefits in engaging adults in learning. It allows them to undertake learning at their own pace and at times convenient to them.

The low cost of online learning courses, compared to classroom-based courses, encourages access and the proliferation of free courses also encourages learners to undertake learning.

Quality of online learning courses can be comparable or better than classroom-based learning, but only if it incorporates effective learner-learner and learner-teacher communication.

The completion rates of FE colleges for online courses are largely in line with classroom-based courses, but for MOOCs they are lower than expected, which is an area of weakness. AIEd provides a significant enhancement of the quality of learning in supporting learner retention and motivation.

However, this is primarily when AIEd is used as a teaching aid, rather than as a substitute for tutor-learner or learner-learner contact. Its main benefit was in providing richer intelligence on learner progress and in automating some marking tasks, which results in tutors being able to increase their contact time with learners.

Nearly all interviewees reported that they expected demand for online learning to increase in the next five years. Most believed there would be particularly substantial growth in the employer market, as employers have only started to recognise the value of providing online learning to upskill their workforce.

Moreover, recent legislation on data protection, the Government Prevent strategy and equality and diversity were also expected to drive demand for regular mandatory employee training.

Stakeholders have more mixed views on the extent to which the learner market would grow in the next five years. Some believed it would grow substantially, as a result of learners becoming savvier in using different digital technologies and therefore more willing to study online, while others believed the market was stagnating because they felt that most of the learners that were willing to study online were already doing so. Those learners might, however, be expected to increase their use.


A key issue is that few developers and providers appear to be making plans to develop new AIEd products or embed AIEd in their existing products.

This was largely due to a lack of awareness by learning providers of how AIED can be used to enhance the learning experience, which is also inhibiting its use.

However, for developers, it was also due to a lack of explicit demand among providers and employers for AIEd products, and a perceived high development cost for producing AIEd products.

This has resulted in low take-up of AIEd, despite a range of literature showing that AIEd can improve the quality of learning.

Intelligent tutoring systems are found to be effective in raising attainment. Examples of AIEd in the school sector show that it can provide benefits in terms of creating more personalised learning and also automating some learner monitoring and assessment tasks to free up tutor time.

It is notable however that the main benefits of AIEd appear to be when it is used as a teaching aid rather than to replace tutors.


The study identified the following recommendations:

To support online learning and AIEd

  • The DfE and its partners should issue guidance and training on how HE and FE providers should use online learning and AIEd to provide high quality learning;
  • The Education and Skills Funding Agency (ESFA) and Office for Students (OfS), through their existing communication with HE and FE providers, should encourage providers to develop an online learning offer for subjects or courses at Level 3 to Level 5 that they specialise in;
  • The DfE should fund the development of ‘test bed’ AIEd products to be used by the FE sector;
  • Future research on AIEd should focus on creating products that can be easily reused for different courses and contexts;
  • The DfE should conduct research with learners to examine demand-side factors that affect the online learning and AIEd market.

To inform future online training initiatives on adult re-training

  • Future DfE online training policy interventions should support online learning at a mix of levels. There is a need for higher level qualifications (Level 4 and Level 5) that provide entry to particular occupations as there is relatively little of this provision delivered in FE. However, there is also a need for lower level provision, including functional skills provision, which can enhance the quality of the learner experience.
  • To ensure sustainability, future interventions should also consider models where employers can pay to access services, such as access to an online portal that hosts training and allows employers to monitor take-up;
  • Online learning courses funded through DfE initiatives should include collaborative learning environments and tutor communication. The evidence suggests these have greater levels of effectiveness for learners.


Review of the online learning and artificial intelligence education market

Ref: ISBN 978-1-83870-030-0, DfE-00112-2019PDF, 1.39MB, 102 pages

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