The market for educational technology could reach $9 billion in the future, he says in a speech at SXSW

The growing use of handheld devices and social media among students is creating a technology tipping point for schools that could completely break down the barriers between teaching platforms within five to 10 years, Bill Gates said Thursday.

Tablet computers, smartphones, e-readers, digital textbooks and the accessibility of digital video including YouTube are playing major roles in changing the way students are learning at both the K-12 and higher-education levels, Gates said during a Thursday keynote at the education arm of the South by Southwest conference in Austin, Texas.

Digital video exercises incorporated into textbooks online are blurring the line between teaching and assessment to the extent that there really isn't a boundary anymore between the two, the Microsoft co-founder and chairman said.

"Finally there are people looking at whether textbooks should be fully digital," he said, speaking to an audience of teachers, administrators and representatives of educational technology companies.

Gates has championed the cause of global health through the Bill & Melinda Gates Foundation since stepping down from day-to-day operations at Microsoft, but improving the state of U.S. education has been a major focus of his humanitarian work as well.

One issue is the fact that standardized test scores at public schools have largely remained the same over the past decade or so even though resources being pumped into public school districts have doubled, Gates said.

Better use of technology could be the key to improving public schools, he said.

Some 44 percent of students in grades 6-8 say they want to read on a digital device, according to data presented by Gates during his SXSW talk. Meanwhile, 80 percent of high school students have access to smartphones, and Twitter use among high school students tripled last year, according to Gates.

There is still the issue of cost when it comes to supplying students with, say, tablet computers or e-readers, "but we're just on the cusp where combo tablet-PCs devices are rich enough [in functionality] and cheap enough that this will clearly be the way it's done," Gates said.

Currently, the markets for technology content, services and back-end infrastructure for U.S. schools amount to roughly $420 million, but Gates said those markets could reach $9 billion in the future.

The vision has challenges, Gates acknowledged. Education, for example, comprised a mere 1 percent of all venture capital transactions between 1995 and 2011, while technology in general and health care took in 38 percent and 19 percent of the pie, respectively, according to Gates.

Other barriers include proving to administrators that technology works and ensuring that teachers are well-trained.

"We're going to have to grow this," Gates said. Ultimately, he hopes that better use of technology will help provide more personalized learning options for students and lead to integration of software programs used in schools.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com