MOOCs Threaten the Traditional Business Model of Higher Education

Get the complete book Thinking Strategically about MOOCs: The Role of Massive Open Online Courses in the College and University at Amazon in print or kindle version.

In a June 2012 interview with the Chronicle of Higher Education, Bill Gates suggested that the ideal modification of the credential system would involve disconnecting representation of the range of an individual’s knowledge from the current metric of college degrees conferred. (Gates himself has a high school diploma and makes substantial use of available resources to deepen his personal knowledge.)  He noted that MOOCs and changes in credentialing are a valuable step in aligning educational infrastructure with employment and business needs. The following September, the Bill and Melinda Gates Foundation announced that it would award ten grants of up to $50,000 each for MOOCs offering “high-enrollment, low-success introductory-level courses.” That same month, Stanford appointed John C. Mitchell, professor of computer science at the university, as its vice provost for online learning, the first new such position in twenty years. Days later, Moody’s Investors Service released the report, “Shifting Ground: Technology Begins to Alter Centuries-Old Business Model for Universities.”  The report further inflamed media frenzy by declaring that MOOCs may elevate the financial stature of elite institutions while simultaneously increasing financial challenges to less-wealthy institutions.

As colleges and universities grappled with constant pronouncements that MOOCs will either save them or challenge them, publishers saw potential profit in the rise and delivery of massive online courses. MIT Press director Ellen W. Faran announced that the Press was “actively tracking the development of MOOCs and believe they do represent a promising market for university-press titles.” The trend seemed to lend weight to some of the strategies of startups like Flat World Knowledge, a textbook publisher experimenting with business and pricing models.  Flat World Knowledge was advertising its innovative business model as “free online and affordable offline.” (However, in November 2012, citing financial concerns, the company announced that it was forced to drop free access.)

The MOOC wave rolled on. By fall 2012, Coursera had doubled its number of participating institutions, Wesleyan University had become the first liberal arts college on Coursera’s roster (one of its courses was taught by the school’s president), and Colorado State University became the first school to offer brick-and-mortar credits for MOOC course completion. By the end of 2012, Wellesley, UC Berkeley, and the University of Texas system were all working with edX, 100,000 students were taking Harvard’s edX classes, there were two million registered Coursera students, and the American Council on Education (ACE) had committed to reviewing designated MOOCs for the purpose of certifying them for transferrable course credit.

The portrayal and reception of MOOCs, intentional or not, as an inspired innovation springing from the heads of a few talented and clearly brilliant educators and entrepreneurs brought on a rash of highly publicized expectations and concerns. Proponents cited MOOCs as a solution to the current crisis in higher education, with its ever-rising costs and ever-lessening value to newly minted graduates entering the job market. Detractors eyed them as destroyers of institutions delivering an invaluable higher-education experience made up of face-to-face instruction and the ineffable benefits of living and learning in a campus community. Reaction on both (or all) sides of the issue has been disproportionate, characterized by considerably more heat than light.

From the early days of the new “revolution,” although reasonable people tried to articulate both the values and challenges MOOCs might offer, their questions tended to be drowned out by the volume of heated argument.  Yet the questions remain viable: Why would colleges grant course credit to students who take MOOCs without paying tuition? How would an institution evaluate MOOC credits on the transcripts of students applying for admission? Are MOOCs even sustainable? What is the actual cost of hosting and delivering them?  How will we balance support needs for existing programs with the potential that MOOCS represent? What exactly is their inherent value to both institutions and students?

Conversation about MOOCs now gives way to more thoughtful reflection and recollection.  The idea that MOOCs are profoundly “disruptive” to the traditional paradigm for higher education echoes pronouncements about earlier technological innovations. The telegraph, for example, was declared a world changing “instantaneous highway of thought”; the radio, “the University of the Air” that would eliminate the need for physical attendance at institutions of higher learning. In 1961, Buckminster Fuller, in his essay Education Automation, described his vision for massive and individualized learning systems, predicting that nothing would be “quite so surprising or abrupt in the history of man as the forward evolution in the educational processes.”

“There is a conventional picture or concept of school that is very powerful in most men’s minds, and I think a great surprise is coming. I don’t think that what is going to happen in education is apprehended or anticipated at all by the political states. I know that there is awareness of coming change amongst the forward thinkers of the educational ranks, but, I feel, even they will be astonished at the magnitude of the transformation about to take place in the educational processes.”

Similarly, in his 1962 Augmenting Human Intellect: A Conceptual Framework, Douglas Engelbart developed and proposed a new research agenda to the Stanford Research Institute, emphasizing the potential of computers for extending the human intellect.  More recently, during the dot.com bubble of the 1990s, colleges and universities wrestled with the need to be online and embrace and integrate the new World Wide Web.

Seen in the light of this history, the breathless pronouncements that MOOCs are world changing can seem silly at best. But MOOCs should also be viewed not as overhyped, unprecedented, and revolutionary developments so much as nodes in a decades-long trajectory of innovation in learning and open education resources. MOOCs were not invented out of whole cloth; rather, they are built upon previous, less-publicized breakthroughs in online learning and open educational resources, and thus are an incremental step forward in the movement toward delivering education online:

Since its founding Sloan-C has evolved into “an institutional and professional leadership organization dedicated to integrating online education into the mainstream of higher education, helping institutions and individual educators improve the quality, scale, and breadth of online education.” As a direct of result of the Foundation’s investments several significant online learning programs have been implemented, including The University of Maryland University College, Penn State World Campus, and the UMASS Online Learning Network.  In addition, the State University of New York (SUNY), the University of Central Florida and other large state university systems have developed online learning programs. Many institutions and individuals have been at this for a long while and in November of 2012 Sloan-C held their 18th Annual International Conference on Online Learning.

At the conference Jack Wilson, president emeritus of the University of Massachusetts who also founded UMass Online in 2001, offered remarks that gave voice to the irritation some online learning veterans felt in the wake of media reports about the upstart MOOC startups. Some of these veterans’ irritations bubbled to the surface as a result of remarks that MOOCs might replace all other forms of online learning and maybe even traditional higher education itself. Many expressed concern that the recent involvement of high profile, high-risk startups and elite colleges would diminish the work of agencies already in the field. “They’re certainly not the first movers; they’re not even the fast followers,” Wilson said. “It’s great to have them on board. But that is not who has led online learning, or who is going to lead online learning.” Sebastian Thrun presented a keynote address at the conference. His comments illustrated the chasm between the veterans and the newcomers when he acknowledged to those present that he was “pretty much ignorant of your work” when he began to conceive of what since became the MOOC provider Udacity.

Next: MOOC predecessors.

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