Reskilling labor is ‘biggest addressable market for learning’ in the workforce: Pearson CEO

Pearson CEO Andy Bird joins Yahoo Finance Live to discuss the education company's acquisition of Credly, how the company is transforming professional and student learning experiences, and the decline in U.S. college enrollments amid COVID-19.

Video Transcript

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BRIAN SOZZI: The world's largest learning company, Pearson, said today it will spend $200 million to acquire Credly, as it works to boost its presence in the workforce skills sector. Let's talk more about the deal with Pearson CEO Andy Bird. Andy, good to see you this morning, congrats on this transaction. Take us through the deal a little bit. Is part of the reason why you pulled the trigger because of this labor shortage that has been caused because of the pandemic?

ANDY BIRD: Good morning, it's great to be on the show with both of you. We've known Credly for for a long time. In fact, we had a 20% stake in the company. So the deal today is really about us paying 140 million for the remaining 80% of the company.

And during the time that we've been on the board and been involved with Credly, we have been so impressed by the quality of the management, the leadership team, and the growth, as you say, in the need for accreditation amongst individuals beyond formal education. Particularly when we look into what's happening, as you say, in the labor market and the need for employers to offer learning opportunities to their employees at a scale that we've never seen before.

JULIE HYMAN: Andy, it's Julie here. So I'm curious, more writ large, how much of your business going forward do you think is going to be sort of reskilling and professional education, and how much is going to be traditional education, college education, lower education, et cetera?

ANDY BIRD: Well, I really believe in a lifetime of learning, and I think the pandemic has acted as an accelerator in that regard. And what we see is firstly, a huge opportunity is the biggest addressable market for learning in terms of learning in the workforce. And we're really building Pearson around a number of divisions to really focus on key aspects of learning at key moments in an individual's life, and then bringing all of those together.

One of the interesting things with the announcement today of the acquisition of Credly is how it aligns with an acquisition we made at year end of a company called Faethm, which is an AI-driven data analytics company that focuses on employees and employers, and really gets employers to understand the needs the learning needs of individual employees.

When you take that, and you put in Pearson's core competencies around designing and delivering coursewear, and now you add Credly, the accreditation piece-- Credly have issued over 50 million accreditations for over 25 million learners around the world-- it starts to bring a unique end-to-end solution to employers and employees.

BRIAN SOZZI: Andy, the pandemic has really, I think, forced a lot of folks to enter the job market very quickly, perhaps skipping college, or just forcing them even early, perhaps forgoing a master's degree. What do you think the longer term impacts from the pandemic will be on your education business?

ANDY BIRD: Well, I think greater fluidity, I think there is a point about maybe redefining what higher education means to certain individuals. And certainly, individuals now are used to more bite-sized education, learning on their own time. And higher education, formal education, plays a very, very important part in that.

Clearly it's been disrupted during the pandemic, but those fundamentals that exist within the college and university system are invaluable to an individual's learning journey. But what we're seeing now is that being supplemented by opportunities to continue your learning journey as you gain employment.

JULIE HYMAN: Andy, I have what might be a strange question for you. Do you think that, not necessarily because of our education system, but maybe partly so, but also because of the social media ecosystem, that people right now are undereducated? Not just about their expertise, but sort of about life and how to approach the world.

ANDY BIRD: Well, indeed and I think there's a great question there around how you define education. And really at Pearson, we're building the world's leading digital media learning company. And so we're really focusing on learning, of which education and formal education is a subset. And the way that you receive your learning can take many, many different forms, and can take place at many different times in your life.

And that's all being driven by technology, by AI, I think the introduction of 5G, virtual reality, the good old metaverse, and everything like that, are all interesting areas in which an individual is going to be able to learn going forward. And I want to ensure that Pearson is front and center in that development.

BRIAN SOZZI: Andy, I'm sure you definitely understand the importance of the metaverse, you were Disney International Chairman, coming from that consumer company before you joined Pearson. Do you view yourself as a future player in the metaverse, you developing technologies to be part of that?

ANDY BIRD: We're certainly spending time studying it. I think it's very interesting if you look at the opportunity to have immersive learning experiences. I mean there have been examples already in the games such as Fortnite. You know they've done Ariana Grande concerts and things like that within the Fortnite game. But they've also started to play with learning experiences, and you see platforms such as TikTok getting into the learning business, and getting into the resume business.

And so I think the opportunity that technology now provides an individual to choose not just the form of learning, but where they learn, and how they learn, bite-size learning is now very possible because of the advent of the technology. And as we see the strides that 5G will enable in terms of augmented reality, virtual reality. Imagine the three of us being able to go off to the Colosseum in Rome and have a lesson being surrounded by our environment in a much more rich and immersive experience

BRIAN SOZZI: Hey, sign me up for that, Andy. None of that was in existence when I went to school. All I know is I think I'm still paying stuff for college, that I really didn't learn anything about, but we'll leave it there Pearson CEO Andy Bird, good to see you. Congrats on the deal. Talk to you soon.