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Public good or playing markets? The real reason for MOOCs

The astonishing idealism and energy manifest in the advance of Massive Open Online Courses (MOOCs) has taken the higher education world by storm. Universities have been shaken to their foundations by the…

There is a danger that Massive Open Online Courses (MOOCs) may end up being more about money and less about education. Mouse and money image from

The astonishing idealism and energy manifest in the advance of Massive Open Online Courses (MOOCs) has taken the higher education world by storm.

Universities have been shaken to their foundations by the sudden availability - universally - of high quality tertiary subjects online and free.

MOOCs so far have been heralded as a way to educate marginalised people in advanced economies, and the billions of people in the developing world who have little or no access to higher education.

But it did not take Vice-Chancellors long to realise that if free online higher education courses were available from the top global universities, this might quickly erode the numbers of students in their own institutions. After all, MOOCs appear well-equipped to engage with the digital generation.

Warnings about the long term viability of university business models followed.

But before we give up on the integrity and achievements of a thousand year old university system, perhaps we should ask some serious questions about MOOCs. After all, just how massive are they? And what are they here for?

Global tsunami or just hype?

The main MOOCs are anticipating student numbers reaching into the millions world-wide. edX, the Harvard/MIT MOOC pioneers, are aiming to reach one billion students.

But already, they claim to be reaching hundreds of thousands of students (see table below). Yet the figures of student numbers claimed by the MOOCs are highly speculative, and include students who do not complete their subjects. An important consideration when the reported drop out rate can be up to 90%.

The total student numbers claimed by the largest MOOCs. Author

In fact, though the MOOCs clearly have a potential to grow immensely, these figures are strikingly similar to what was achieved during the last wave of e-learning euphoria in the early 2000s.

Been here before

During this earlier wave, all of the US investment banks in the late 1990s and early 2000s extended the hype cycle from the adventures of companies directly into e-learning start-ups.

Merrill Lynch, Goldman Sachs, Bank of America Securities, Hambrecht and Co, Sun Trust, and many others relentlessly spruiked the e-learning industry as destined for fabulous growth trajectories and mouth-watering revenue streams.

Identifying the US education and training industry as worth $772 billion in 2000, the second largest sector of the US economy, investment banks could not wait to secure a piece of this action. Merrill Lynch salivated:

“By our estimates, the e-knowledge market will reach $53.3 billion by 2003… Web-based corporate learning should enjoy explosive growth, measuring $11.4 billion by 2003, up from $550 million in 1998.”

Goldman Sachs was even more effusive insisting the Internet was revolutionising education:

“The market opportunity for e-Learning is vast. A broad measure of e-Learning’s potential is the approximately $646 billion spent on corporate training, higher education, and K-12 schooling in the United States in 1999. While e-Learning will never capture 100% of this market, we believe that it can generate billions in new wealth for investors off relatively small market shares."

In a thorough review of the e-learning sector at the time Hambrecht & Co claimed:

“We expect the online training market to nearly double in size every year through 2003, reaching approximately $11.5 billion by that time. Investment opportunities in online pure plays will emerge, as numerous e-learning companies are now preparing to tap the public markets.”

Yet of the 46 most promising e-learning companies identified in the comprehensive Hambricht & Co survey in 2000, but in a recent analysis only six were still in existence in 2010, and most of these had morphed from being learning technology companies into social network companies.

A viable business?

Will the MOOCs experience the same fate as these earlier entrepreneurial efforts?

Hopefully the MOOCs are built on more solid educational foundations and ideals. The MOOCs are offering at this stage provision of a valuable educational service for free, they have a vital connection to distinguished universities, and they have a global vision of educating the masses which fits well with the transformation towards a knowledge economy.

Most importantly much of the broadband technology that was in its infancy a decade ago is now more extensively available, with an unimaginable array of software tools and rich content to fuel the educational aspirations of the new digital generation. If well conceived and delivered, the MOOCs could be at the forefront of the globalisation of higher education.

But they have many issues to negotiate first, and could lose their way as the early pioneers of e-learning largely did.

Free goods and winner-takes-all

At the heart of the marvellous MOOC educational mission is a profound and probably unresolvable tension between the goal to educate and to monetise.

Are they committed to providing mass education as a public good or are they aiming at winner-take-all global domination of education markets?

As Simon Marginson persuasively argued, the MOOCs are deeply embroiled in both the idealism of providing free universal access to higher education courses, and the logic of winner-take-all markets.

This is Harvard and Google. Stanford and Hollywood. MIT and Apple.

The eminent universities involved, of course, have educational ideals at the forefront of their strategy (and enhancing their global brands as traditional universities). But the venture capitalists investing the seed funding for the early MOOCs have more commercial instincts, and it is likely that all of the MOOCs will become increasingly dependent on venture capital funding as they seek to expand their activities.

As the search to monetise the MOOCs continues, the worry is they will become a platform for advertising, increasingly add on additional services for fees that will leave many excluded, and erect increasing pay-walls over time. First secure the market, then milk it.

Whatever the original ideals, the MOOCs legacy, if developed irresponsibly, could prove the unintended consequence of a commercialisation and homogenisation of higher education on an global scale.

The MOOC impact

In the context of the previous experience of investments in e-learning, and the issues still be resolved by the new exuberant generation of MOOCs, it will be advisable for universities to adopt a measured approach to developing their responses.

What is clear is that for many years to come universities will be developing and applying different approaches to blending technology with face to face learning.

The proliferation of technology and software tools provides a powerful platform which universities can use just as well as the most advanced MOOCs to enrich the learning experience.

Essentially universities are gradually morphing into mass online campuses in their own right, though maintaining the wonder of face to face encounters, and retaining a role for the most flexible, interactive, intelligent and responsive pedagogic technology of all – the teacher in the classroom.

Join the conversation

8 Comments sorted by

  1. Colin MacGillivray

    Architect, retired, Sarawak

    Good article.
    "the most flexible, interactive, intelligent and responsive pedagogic technology of all – the teacher in the classroom." When a MOOC provider has invented software that passes the Turing test, can be accessed by the student at home cheaply and has the qualities outlined above then MOOCs will probably thrive. It must happen some time in some courses.

    1. Henry Verberne

      Once in the fossil fuel industry but now free to speak up

      In reply to Colin MacGillivray

      In the last few months I have completed an online course with the University of Edinburgh. It was essentially self- paced but with deadlines on quizzes at the end of each module.

      At least at this stage of the game the offerings will of necessity be limited but I can envisage that it could be quite extensive and interactive in the future. I can also foresee some sort of fees being required to pay for the academic staff and other resources involved in the courses. Hopefully they will be low enough to be affordable for many prospective students.

    2. Colin MacGillivray

      Architect, retired, Sarawak

      In reply to Henry Verberne

      Henry, this concept is clearly more easily adapted to some fields of study. I would guess book keeping or accountancy would be a possibility that springs to mind. Language studies also? Once such a course gets credibility from employers, and works financially for the providor the need to attend a university will diminish. We'll still need medical schools for a very long time though.

  2. George Harley

    Retired Dogsbody

    Thanks Thomas,
    e-learning was probably a good idea at a bad tech/financial time. Perhaps this time all the planets will line up.
    Although we have all met some teachers that, if asked to be the software in the Turing test, would produce more error messages than insights, I too share the sentiments, expressed in the last paragraph, with you and Colin.

  3. Villi Grdovich

    logged in via email

    I started a few MOOC courses and was impressed by the infrastructure supporting each course, as well as the quality of the course itself.

    I was faced with the problem of learning quite difficult subjects via a textbook. By doing these subjects via MOOC, I was able to overcome several learning blocks thanks to the quality of instruction, and I also got to understand new methods of data handling and programming which I would otherwise never have known existed.

    In my experience, I would rather undertake MOOC than attend a part time university course on the same subject, given the travel, parking and time constraints involved in attending a bricks and mortar establishment. But I would classify them as extension courses for people who are already graduates, or as high quality adult education for people with particular interests they wish to indulge.

  4. Craig Savage

    Professor of Theoretical Physics at Australian National University

    There is a clear differentiation in the business models and purposes of MOOC providers. edX is funded only by the member universities and by foundations. Its stated missions are to improve the learning of students at the member universities - both on and off campus, and to provide a new level of quality in higher education to the world. edX represents the new development in the online education space.

    Many other providers, such as Coursera, are start-ups whose missions are to make money. They will adapt in whatever ways are necessary to do this, as start-ups must. They may well turn into social media businesses rather than learning businesses. They represent the continuity with the turn of the millennium dot-com boom.

  5. Lyndsay Agans

    Convenor, Digital Learning Project at Australian National University

    As Craig clarifies below, the difference amongst MOOC providers is just as it is amongst different higher eduction organisations. Perhaps you've not heard that edX has agreed to open source all of the code of the platform to be used in a myriad of ways by different educational levels. My recent conversations with the President of edX let me know that ANU made the right choice with edX as it certainly falls into the category of public good. These are not simply really large online courses, but something else entirely. It is time people shift their mental model and understand the data we acquire on cognition will help ALL learners in or out of classrooms.

  6. Sean Lamb

    Science Denier

    I have taken a couple of courses from both EdX and Coursera - from the user's perspective there is not much difference to discern. Aside from Edx's extremely clunky forum interface - on the whole I think Coursera has a significantly better interface.
    I have been very impressed with the quality of offerings from both providers. Edx seems to concentrate on providing longer courses that match a first year subject, while Coursera has shorter courses that often develop more specialized skills - and…

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