From learning to earning

We believe that providing relevant skills for employment, as well as professional and vocational training in the most employable professions is becoming the next battleground for EdTech companies.

December 2, 2020

Dr. Kirill Pyshkin,

Fund Manager, Credit Suisse Asset Management

From learning to earning

Why do people spend so much time on education - is it worth it? I spent over 20 years in formal education from primary school to post-graduate degree, and I consider this period some of the most enjoyable time in my life. You learn something new every day, while making friends on the way, and above all you are young and carefree. But was the time well-spent from the point of view of getting the most highly paid job out there? …and is everything about money? Perhaps not.

In my view, that much time spent in education, although highly enjoyable, is a real luxury and as with all luxuries, highly exclusive. In my case, growing up in the former Soviet Union, I benefited from extraordinarily generous state subsidy. I was able not only to study absolutely for free, but also received a monthly allowance for living expenses, enough to regularly visit my parents by plane or take an overnight train to see the first McDonalds in Russia… but that is another story.

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For most people, bar the “eternal students”who may still benefit from the generous education systems which still exist in some places, the idea is to get a job as quickly as possible, start earning and paying off the student debt accumulated during the years of study.

Those student debts are indeed significant, considering for example, that the cost of education in the US has, according to the Bureau of Labor Statistics2, risen by more than 12 times over the last 40 years, which is approximately 4 times greater than the overall rate of inflation. As a result, in the US graduates owe on average $30,000 of debts and most worryingly 41% of them are under-employed3.

The old model of front-loading education early in life gives way to lifelong learning

One of the reasons for such a high underemployment figure for the US graduates is that they have not acquired the relevant skills they need for a specific job. According to McKinsey’s America’s Future of Work report”4: “Workforce skills have been a growing concern in the United States for many years. Now technology demands new and higher-level skills, including more critical thinking, creativity, and socioemotional skills. The skills needed in fast-growing STEM5 roles, in particular, are continuously evolving. The old model of front-loading education early in life needs to give way to lifelong learning. Training and education can no longer end when workers are in their twenties and carry them through the decades”.


Our thematic strategy aims to outperform by identifying the powerful trends and themes likely to shape the future investment landscape.

The need to develop relevant skills for employment is well understood, which is why they are part of the UN Sustainable Development Goal no 4. Target 4.4: “By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship”. Specifically stating that “beyond work-specific skills, emphasis must be placed on developing high-level cognitive and non-cognitive/transferable skills, such as problem solving, critical thinking, creativity, teamwork, communication skills and conflict resolution, which can be used across a range of occupational fields.”6

It is not just the type of skills but the profile of the job market and demand for certain professions that are constantly evolving. On the one hand automation is phasing out jobs7 in office support, production work, food services and retail sales. On the other hand, demographics such as ageing population in particular boosts demand for example for qualified healthcare professionals, which is now becoming the fastest growing profession in the US.

Chart 1

Chart 1. McKinsey forecast for potential job growth in the US, 2017 to 2030
Source: McKinsey Global Institute (2019). The future of work in America: People and places, today and tomorrow. Derived from

Skills, lifelong learning and vocational training will be the next battleground

We believe that providing more relevant skills for employment, as well as professional and vocational training in the most employable professions is becoming the next battleground for EdTech companies.
For example, one of the stalwarts of the EdTech sector in the US – Chegg Inc – recently acquired online skills-based learning platform ‘Thinkful’. Specifically noting that 85% of ‘Thinkful’ graduates get jobs in their field of study within six months of graduating their program, Chegg’s CEO said8: “Students are increasingly looking to improve their professional opportunities by learning the most relevant job skills, either while in school or soon after. Adding Thinkful courses to our suite of Chegg Learning Services will enable us to empower students to obtain in-demand, high-quality job skills, for the fastest-growing job categories, with affordable prices. Thinkful has achieved strong revenue growth of greater than 30% year-over-year because it has focused on going directly to students and helping them gain the most valuable skills for today's workforce."

"Chegg will continue to expand [its] offerings and make it easier for students to accelerate their path from learning to earning. Students are increasingly looking to improve their professional opportunities by learning the most relevant job skills, either while in school or soon after"

Dan Rosensweig, CEO of Chegg 9

Another company – 2U Inc - makes their strategic development direction even clearer. With its 2017 acquisition of short courses provider ‘GetSmarter’ and the 2019 acquisition of Boot Camps business ‘Trilogy’, the company now offers the full spectrum of courses priced from $1,000-5,000 which take 1-2 months to complete, to $10,000-20,000 Boot Camps that take around 6 months, to full degrees taking up to 3 years that could be priced at $200,000 or more.

What is interesting is that the benefits of this strategy are now becoming clear, because the short courses revenue is growing at more than 2 times the rate of growth of traditional degrees10. Is this the beginning of the end of the traditional educations system as we know it?

Chart 2

Picture 1. 2U Inc’s full range of courses in terms of duration and costs
Sources: Credit Suisse, 2U Inc; based on 2Q 2020 results presentation & investor call transcript10



  • No capital protection: investors may lose part or all of their investment in this product.
  • Political developments concerning the education industry could have a significant adverse impact on the edutainment sector.
  • Exposure to smaller companies can result in elevated short-term volatility and may carry liquidity risk.
  • A higher concentration in specific sectors may fall out of investor favor at certain points in time.
  • There are risks arising from a factor bias toward a growth investment style with a particular overweight in small- and mid-cap stocks.
  • Since the fund focuses on highly innovative companies, volatility can be significantly elevated. Exposure to emerging markets may result in even higher volatility.


1, accessed on September 25, 2020
2 Credit Suisse based on Bureau of Labor Statistics data
3, p7, accessed on September 25, 2020
4, accessed on September 25, 2020
5 STEM: Science, technology, engineering, mathematics
6, accessed on September 25, 2020
7 “The Technology Trap” by Carl Benedikt Frey, 2019, Princeton University Press
8 Chegg’s press release announcing its acquisition of ‘Thinkful’ 4/9/2019, accessed on September 24, 2020
9 Chegg’s press release announcing its acquisition of ‘Thinkful’ 4/9/2019, accessed on September 25, 2020
10 2Q20 Earnings _ Investor Presentation _ FINAL ( (PDF), accessed on September 23, 2020


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