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Public good or playing markets? The real reason for MOOCs

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.

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