Business environment and market forecast

The Japanese education industry faces a challenging business environment as competition among companies intensifies under declining birthrates. Still, the EdTech market, to which we belong, continues to attract a high level of interest and attention as the spread of online learning expands due to the government's GIGA school initiative beginning in FY2020 and the impact of the COVID-19 outbreak, among other factors. The EdTech market is expected to grow from 186.8 billion yen in FY2021 to 252.4 billion yen in FY2027. (Source: “IT Navigator 2022” by Nomura Research Institute, EdTech market size forecast “Content (subject learning)”)

Market Size Forecast

In addition, the new Course of Study was implemented in FY2020 (elementary schools), FY2021(junior high schools), and FY2022 (high schools) to develop qualities and competencies needed in the new era and to enhance learning assessment. The new Course of Study aims to realize Society 5.0 and improve the learning process from the perspective of independent, interactive, and deep learning (“active learning”). It positions information literacy as one of the “qualifications and competencies forming the basis of learning,” along with language skills, problem-finding and solving skills, etc. and stipulates that "each school shall provide the necessary environment for using ICT tools such as computers and information communication networks and enhance learning activities that make appropriate use of these tools.” The active use of ICT in learning activities has just begun. Meanwhile, MEXT has announced “Urgent Measures for Work Style Reform of Schools,” expecting the use of ICT to drive teachers’ work style reforms.

The Company has been selected by METI for the three-year Ed-Tech introduction subsidy program in 2020, 2021, and 2022, designed to spur innovations in education. We believe ICT will play a significant role in "improving the learning process from the perspective of how to learn, and independent, interactive, and deep learning (active learning)." The EdTech market in Japan is expected to grow despite the declining birthrate.