Higher education disruption update

This online education thing seems to be picking up steam:  Stanford Professors Daphne Koller & Andrew Ng Also Launching a Massive Online Learning Startup. The missing piece is still certification. Once that exists, bricks-and-mortar delivery of higher ed will face some nasty competition … and we’ve seen how people feel about BaM — just ask Best Buy, Borders, or Blockbuster.

Of course, retail shopping is not the same thing as getting educated. There are similarities. For example, BaM is expensive and inconvenient in both cases. Also, in both cases, the younger generations are extremely comfortable with the online technology. Yet, it’s the differences that should be most concerning. Education-on-demand has the potential to solve many problems. This feature will be highly appealing to most potential students. Even more threatening to the traditional model:  the price of online education taught by professors from top schools is not just lower by the savings in BaM distribution costs — it’s zero. Think about that – zero.

Most of the colleagues with whom I discuss these developments argue that there is simply no substitute for the real-time, in-person, interactions available in the traditional classroom setting. They believe that this will continue to motivate students to pay a premium for the experience. I wonder. It is not obvious to me that students get some special utility premium from classroom interactions. Ask yourself this: do your students consider “cold-calling” a welcome feature of sitting in your class? In my judgment, most students would actually pay to avoid it.

Besides the assessment problem, there is another hurdle for the online education model. Clearly, no professor can answer the specific questions of 100,000 students. The online institutions are going to have to find a way to staff some form of virtual office hours in which students can get answers to their questions. My sense is that there is plenty of well-trained talent in India to staff office hours for these courses. Heck, in ten years, online course providers will be able to pick up highly experienced, unemployed domestic PhDs to man the chat rooms on the cheap.

UPDATE:  Elite Universities’ Online Play (HT: Instapundit)

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3 Comments on “Higher education disruption update”

  1. alex says:

    just food for thought, in the UK the Open University has delivered online education, including MBAs, for years and it is arguably the largest academic institution in the UK. Yet all the other Universities are still there or, better, the fact that (some of them) are suffering does not depend on the presence of the Open University. Sure, the question is what happens if institutions as Stanford, Harvard and so on go mainly online… yet it works the other way round as well, because the OU hasn’t developed a reputation as strong as, for instance, the Oxbridge universities and well established institutions may run the risk of damaging their reputation.
    It is true, in my view, that in the short term the certificate is what the customer (i.e. the students, what a terrible word…) wants and that they hate things like ‘cold-calling’ etc, yet the average student probably hate the exams as well so what? In the long term if the reputation of the certificate is not matched by the quality of the students with the certificate, then the reputation of the certificate goes down very quickly. This seems to me to be an issue with online education, which in principle is a good thing. If, let’s say, 100,000 students get a Stanford certificate, the chances are that not all 100,000 students really have the same level of quality (if they do…then Stanford is lowering the bar too much…). Over time the Stanford brand will be damaged because potential employers won’t be able to distinguish which student is good and who is less good based on the certificate. In sum, I think that online education will surely force many low level institutions to close down yet it will probably push well-established institutions to focus on what they were born for, i.e. high-quality education, and leave the customer-student equivalence out of their doors. This would be a positive thing, in my opinion. I suspect they will also increase their fees over time, although a period of uncertainty may be expected. it would be interesting to see which well-established institutions will deliver on their brand promise (i.e. high quality education) and which will not.

  2. rmakadok says:

    Man, I had no idea you had such a cool hobby…



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