Solving the labor crisis with AI backed education
By 2030, up to 375 million workers will need to learn new skills or transition to entirely different roles to remain employable. Without AI, that can't happen.
Finding ways to integrate AI into edtech isn’t just timely, it’s essential. The world is just waking up to the fact that technology is a few years away from rendering huge swathes of the global workforce redundant. Employees face tough decisions about how to stay relevant in a modern world and, likewise, companies won’t have much fun managing the costs of hiring new talent or trying to upskill existing workers with the long-outdated training methods still being used today.
This is where AI and edtech come together as one of very few solutions that is cost-effective, adaptable and scalable enough to tackle this looming threat. Daunting though the challenge may seem, hand-wringing isn’t going to get us anywhere. Now is the time for technical innovators, the business world and educators to come together and seize this opportunity.
Edtech must rise to the global challenge
The pandemic-era edtech boom saw consumer-focused platforms like Coursera and Duolingo thrive as millions turned to online learning. Riding the lockdown business-to-consumer (B2C) wave, global edtech funding hit $20 billion in 2021. But, as in-person activities resumed, funding dropped sharply to $3 billion by 2023.
In contrast, business-to-business (B2B) edtech has emerged as a robust, growing market. Instead of targeting individual learners, these platforms focus on corporate needs, providing tools to improve employee retention, productivity, and skills development. AI is central to this shift, creating tailored, scalable training that meets the growing need for more effective workforce development as industries grapple with automation and technological change.
The existential threat faced here by both businesses and employees is real. By 2030, up to 375 million workers will need to learn new skills or transition to entirely different roles to remain employable. AI-powered platforms will enable companies to address these challenges, bridging skills gaps and preparing employees for a rapidly changing workplace.
This is particularly true for Europe, which now finds itself at a crossroads. The great manufacturing and industrial players that powered the last century have lost their dominance over global supply chains. European economies are stagnating. Technology and industrial best practices have not kept in step with the rest of the world.
Aside from mass layoffs and site closures, most recently exemplified by Volkswagen in Germany, companies risk losing corporate knowledge without adequate measures in place to capture, archive and adapt it to suit the future of industry and its workforce. This is a huge opportunity for builders to step forward and act before it is too late.
Training that won’t cost your employee’s respect
Corporate training often feels like a box-ticking exercise rather than an opportunity to build a skilled and adaptable workforce. Programs are often repetitive, disengaging, and fail to produce lasting results. AI is transforming this space by creating personalized, interactive learning experiences.
The snappily-named study ‘When Generative AI Meets Workplace Learning: Creating A Realistic & Motivating Learning Experience With A Generative PCA’ by Andreas Bucher et al. highlights how Generative AI tools, like Generative Pedagogical Conversational Agents (GenPCAs), can create dynamic training tailored to individual needs. These AI-driven tools simulate workplace scenarios, mirroring real-world challenges to foster engagement and self-directed learning. Here’s what the study found:
Higher engagement levels: Employees trained with GenPCAs reported a 40% increase in engagement compared to traditional methods.
Improved retention: Scenarios designed by AI helped participants retain 35% more information on average.
Realistic simulations: The ability of AI to mirror workplace-specific challenges increased perceived relevance of the training, leading to greater motivation to apply skills.
Academic studies are one thing. Real-world applications are another. Fortunately, one of our very own portfolio companies is ahead of the curve and is already implementing dynamic AI-training out there in the real world.
Company Shield is a cybersecurity training platform that transforms traditional training into interactive, scenario-driven exercises. Their approach uses continuous, AI-generated phishing simulations and deepfake scam training to immerse employees in real-world scenarios, helping users to recognize and neutralize risks in real time.
When you have a dedicated training session, the warning signs are obvious and the risks are usually weighted in a way to help employees pass. But having AI-generated risks introduced into employees’ daily workflow breeds a totally different mindset across an organization and requires all actors to keep their skills sharp at all times. By combining continuous training and a permanently vigilant approach to cybersecurity, Company Shield has helped organizations reduce phishing success rates by 25%.
This kind of dynamic, AI-powered training is a big improvement on embarrassing, outdated training materials most employees have to suffer through. But what about when employees don’t retrain and upskill, even when they have plenty of opportunities to? This brings us neatly to the "skill vs. will" problem.
While some employees are naturally motivated to learn and adapt, others may lack the willingness, even when they have the capacity. AI-driven tools can play a critical role in addressing this by analyzing behavioral patterns, engagement levels, and performance metrics to identify employees who are ready to upskill.
I can see scope for innovators in the edtech space to tackle the skill vs. will conundrum by tailoring learning paths to both ability and motivation. AI tools have the adaptability to monitor both these factors and adjust content based on an employee's aptitude and willingness to learn. Builders might also consider adding gamification and interactive tools to make training more engaging and impactful. By addressing these gaps, new platforms can help businesses improve workforce retention, productivity, and readiness for future challenges.
Prepare workers for the worst
AI virtual reality (VR) and augmented reality (AR) are a powerful combination for edtech. By combining lifelike simulations with AI-powered analytics, these technologies transform the way employees learn and practice skills, especially those that experience unique risks that are hard to recreate with today’s training methods.
VR training isn’t just a gimmick. PwC research found that employees trained with VR completed programs up to four times faster than those using traditional methods. Learners also reported a 275% increase in confidence to apply new skills and were 3.75 times more engaged with the content. AI enhances this further by dynamically adapting simulations to user data, ensuring that each session becomes progressively more effective
Pixaera is a VR training platform focused on safety-critical industries such as energy and manufacturing. Their training focuses on hyper-realistic, story driven simulations that put employees in situations that could lead to Serious Injuries and Fatalities (SIFs) - think limbs getting stuck in machinery and other grizzly workplace accidents.
With Pixaera’s VR training, the employees aren’t just watching a video, but living the experience. With AI, these scenarios can be adapted to each employee, as well as evolve to match real incidents and emerging trends observed in industry data. Pixaera reports a 98% user preference rate over traditional methods, with retention rates improving by up to 30%.
While VR/AR technologies are already driving change in high-stakes sectors, their broader potential is only beginning to be realized. Industries like retail and healthcare are exploring these tools to train employees in customer service and patient care. This is a great opportunity for builders with experience in industries that experience risks that can’t be adequately, effectively or affordably prepared for with traditional training methods.
Why it pays to integrate edtech into industrial operations
In manufacturing, where every second counts, inefficiencies are more than an inconvenience - they’re costly. From skill gaps to outdated processes, companies often find themselves losing valuable time and resources. AI is helping companies not just catch up but lead in a cut-throat corporate landscape.
A Springer Artificial Intelligence Review study found that AI-powered systems significantly enhance high-performance work environments by improving employee training and development. These systems not only automate tasks but also help employees adapt to complex processes through real-time feedback. Similarly, PwC’s report on AI in manufacturing showcases examples like FANUC’s Oshino factory in Japan, where robots autonomously assemble and inspect other robots. Companies are constantly changing, which means strategies to monitor both efficiency and opportunities to adapt employee training need to run around the clock.
Deltia.ai (another of our portfolio companies) leverages AI to optimize assembly lines, combining computer vision and real-time analytics to monitor workflows, identify inefficiencies, and create targeted training content. Using cutting-edge technologies like NVIDIA Jetson AGX Orin modules for edge computing, Deltia.ai provides immediate, localized insights in the workplace. Its real-time analytics dashboards convert raw data into actionable visualizations, enabling managers to pinpoint delays, misaligned workflows, and material handling inefficiencies. These insights empower managers to deploy targeted interventions, such as reallocating resources or retraining employees.
You can see where things will go from here across the entire sector. Multilingual AI training modules could help companies address skill gaps across diverse workforces, as well as boost retention and productivity. Similarly, integrating predictive maintenance with workforce training could enable systems to proactively identify and address machinery issues while providing relevant employee training in real-time. Innovators could also develop industry-specific AI solutions for sectors like construction or food processing, where safety and precision are critical.
Bespoke training materials and immortal executives
AI is transforming corporate training by helping companies turn their own materials and expertise into tailored, impactful resources. Beyond just improving training, it’s preserving critical knowledge, from retiring employees’ skills to invaluable organizational insights. If that’s not enough, AI is even bringing back long-dead executives, so they can impart their wisdom from beyond the grave.
Platforms like Colossyan and eduBITES digitize and adapt companies’ internal knowledge into engaging and scalable training content. Colossyan uses generative AI to transform static materials like PDFs and PowerPoint presentations into dynamic training videos, reducing content creation time by up to 50%. Similarly, eduBITES helps businesses capture expertise from retiring employees and niche specialists.
One extreme example of how AI can preserve the influence of extraordinary executives is Panasonic’s initiative to immortalize its late founder, Konosuke Matsushita, through an AI model. Developed in collaboration with the University of Tokyo-affiliated Matsuo Institute, the system uses Matsushita’s writings, speeches, and over 3,000 voice recordings to create a “digital clone” capable of emulating his thought processes and speech patterns. This AI not only preserves his management philosophy but also serves as a consultative tool for contemporary decision-making.
The idea that companies don’t need to bring in pre-made external content and can simply use the documents they generated throughout their existence, along with recordings of executives, is a total break from all previous corporate training.
Bigger public companies will have materials that can readily be transformed into training content. But smaller companies may not be ready for this. New platforms could be designed to help companies archive and record their activities for future training purposes, as well as to provide solutions that grow in scope and scale along with the companies themselves.
Corporate information is often a closely guarded secret, but many companies are waking up to the fact that building in public comes with benefits of its own. This opens up space for creating services that boost interoperability and bridging between new AI knowledge management and training programs. AI tools that can integrate seamlessly with existing knowledge bases, adapt to evolving workforce demands, and scale efficiently will be key to addressing the next generation of corporate training challenges.
The future of work demands innovation, and AI-powered edtech holds the key to unlocking it.
Professionals, technologists, and innovators have a unique chance to not just meet these challenges but shape the future of corporate learning. The need is urgent, the market is ready, and the tools are within reach. Now is the time to build the platforms and systems that will redefine education, improve businesses, and transform the workforce of tomorrow.