The business impact of MOOCs
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MOOCs have evolved from early open online courses focused on connectivism to the current massive open online courses provided by universities on digital platforms. These platforms are experimenting with online education models from other startups and introducing non-formal certificates. While MOOCs have received significant media attention, they do not fit the definition of a hype. When analyzed using the framework of disruptive innovation, MOOCs have the potential to disrupt traditional higher education by initially serving less selective students before expanding to more advanced programs.
The business impact of MOOCs
- 1. Transform to the power of digital The possible business impact of MOOCs Timo Kos @timokos /timokos @KhanAcademyNL www.khanacademy.nl timo.kos@capgemini.com timo@khanacademy.nl Capgemini Consulting marketleader education Khan Academy NL Voorzitter stichtingsbestuur
- 2. Copyright © 2013 Capgemini Consulting. All rights reserved. Content 1. A brief history of MOOC’s 2. Business impact of MOOCs 3. Strategic scenario’s 2
- 3. Copyright © 2013 Capgemini Consulting. All rights reserved. MOOC = Massive Open Online Courses (I) A. Early pioneers (2007/2008) of connectivism & social learning (now cMOOC) 3 David Wiley (Brigham Young University) George Siemens (Athabasca University) Stephen Downes (National Research Councel Canada) Proponents of connectivism use the web to explore the possibilities of open & social (‘networked’) learning
- 4. Copyright © 2013 Capgemini Consulting. All rights reserved. MOOC = Massive Open Online Courses (II) B. Pioneers (2011-2012) of free massive open online classes (now xMOOCs) 4 Salman Khan Prof. Peter Norvig & Prof. Sebastian Thrun (Stanford) Prof Andrew Nge & Prof. Daphne Koller (Stanford) Prof. Anant Agarwal (MIT) These proponents use the web to provide traditionally structured online courses for free and aim to ‘disrupt higher education and open it up to the masses’.
- 5. Copyright © 2013 Capgemini Consulting. All rights reserved. xMOOC platforms: Technology start-ups building new digital distribution channels for ‘open’ online education... 5 Founded: April 2012 Founder: Koller & Nge (Stanford professors) Company: For profit Funding: $22 million (Venture Capitalist) # Universities: 62 # Courses: 323 # Topics: All academic fields # Students: 3.5 million Certification: Yes (most) Proctored examination: Yes, (5 accredited courses + partnership with ProctorU) Open Source: No (licenced) Founded: May 2012 Founders: MIT & Harvard Company: Not- for-profit Funding: $60 million (Harvard / MIT: 30 each) # Universities: 12 # Courses: 20 # topics: ICT, Engineering, Health #students: 700.000 Certification: Yes Proctoree examination: Yes (450 CBT locations in 110 countries via partnership with Pearson VUE) Open Source: Partly (licenced) Founded: January 2012 Founder: Sebastian Thrun (ex Stanford professor) Company: For profit Funding: $15 million (Venture Capital) # Universities: none # Courses: 22 # Topics: ICT # Students: 800.000 Certification: Yes Proctored examination: Yes (4000 CBT locations in 170 countries via partnership with Pearson VUE) Open Source: No (licenced)
- 6. Copyright © 2013 Capgemini Consulting. All rights reserved. 05101520 #1 - Harvard University #3 - MIT #4 - University of California- Berkley #27 - University of Toronto #35 - The University of Texas at Austin #63 - McGill University #64 - Australian National University #91 - Rice University #101-150 - École Polyt. Lausanne #201-300 - Delft University of Tech. #301-400 - Georgetown University -# - Wellesley College Number of courses announced or offered Certificate after completion Official on-campus course Non-official course Textbook digital available 0 5 10 15 20 Stanford University - #2 California Institute of Technology - #6 Princeton University - #7 Columbia University - #8 University of Pennsylvania - #14 University of California, San Diego - #15 University of Washington - #16 Johns Hopkins University - #17 University of California, San Francisco - #18 University of Wisconsin–Madison - #19 The University of Tokyo - #20 University of Michigan - #22 University of Illinois at Urbana-Ch. - #25 University of Toronto - #27 University of Minnesota - #29 Northwestern University - #30 University of Colorado Boulder - #33 Duke University - #36 University of Maryland, College Park - #38 The University of British Columbia -#39 The University of North Carolina - #41 University of Copenhagen - #44 University of California, Irvine -#45 Pennsylvania State University - #49 Vanderbilt University - #50 NO certificate after compl. Accredited course .. partnering with top universtities of the Shanghai Ranking (ARWU) (25 from the top 50, including 7 from the top 10)
- 7. Copyright © 2013 Capgemini Consulting. All rights reserved. …experimenting with online didactics from other successfull open education start-ups… 7 Founded: 2006 Founder: Salman Khan Company: non-profit Funding: $ 10 million (Philantropists) # Courses: 3000+ weblectures (200 million + views) # Topics: Math, Science, History Art, etc.. # Students: ca. 8 million Certification: NO Proctoreed examination: NO Revenue Model: Non-profit Open Source: Yes Founded: 2009 Founder: Phillip Schmidt Company: non-profit Funding: unknown (Philantropists) # Courses: 6 schools on open learning # Topics: Open Data, Education Webcraft Social Innovation Mathematical Future # Students: 30.000 Certification: NO Proctoreed examination: NO Revenue Model: Non-profit Open Source: Yes Founded: 2011 Founders: Zach Sims and Ryan Bubinski Company: for-profit Funding: $ 12,5 million (Venture Capital) # Courses: 5 # Topics: Javascript HTML & CSS Python, Ruby JQuery # Students: 550.000 Certification: NO Proctoreed examination: NO Revenue Model: Referral fee’s Open Source: No (licenced)
- 8. Copyright © 2013 Capgemini Consulting. All rights reserved. … AND introducing new (non-formal) types of HE certificates issued for automatically and/or peer-graded exams… 8
- 9. Copyright © 2013 Capgemini Consulting. All rights reserved. … creating possibilities to pursue new monetization strategies and create new business models for higher education… license model: a share of gross revenue between platform provider and universities offering courses hosted on the platform for tuition paid degee programs or fees for additional services to students (e.g. coaching) Administrative fees: for certification on proctored exam locations Recruitment fees: from corporations for recruiting talented students Premium/Fremium model: free and upgraded paid versions of the MOOCs and services, resembling the ‘freemium’ and ‘premium’ payment models of other internet services Advertisement: monetizing on the scale and social characteristics of users of the platform. 9
- 10. Copyright © 2013 Capgemini Consulting. All rights reserved. Content 1. A brief history of MOOC’s 2. Business impact of MOOCs 3. Strategic scenario’s 10
- 11. Copyright © 2013 Capgemini Consulting. All rights reserved. Given the unprecedented scale of MOOCs and the global reputation of the partner universities of the xMOOC platforms, we set out to answer the following question : 11 are MOOCs a HYPE or a DISRUPTIVE INNOVATION? Review board Drs. Anka Mulder Prof. Dr. Marc Vermeulen Interviewees Drs. Paul Rullmann (TUD) Prof. dr. Simone Buitendijk (UL) Prof. dr. Elmer Sterken () Prof. dr. Ed Brinksma (UvT) Drs. Agnita Mur (HL) Drs. Gerard van Drielen (HR) Dr. Geleyn Meijer (HvA) Dr. Wilfred Mijnhardt (EUR) Drs. Tom Abel (UvA) Opdrachtgever Drs Paul Rullmann Drs. Anka Mulder Casestudy ‘Business impact of MOOCs’ as part of 3 year research with MIT Business plan Online Education
- 12. Copyright © 2013 Capgemini Consulting. All rights reserved. First we analyzed xMOOC platforms from Gartners technology hypecycle perspective … 12 (Smart) Browsers Social Media You Tube Web Cams … and concluded that MOOCs do not fit the characteristics of a technology hype (although the media attention they receive do fit the characteristics of a media hype)
- 13. Copyright © 2013 Capgemini Consulting. All rights reserved. The theory of ʺdisruptive innovationʺ (Open) Online Education viewed from Christensens’s disruptive innovation perspective... „A process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors” ‒ Professor Clayton M. Christensen, Harvard Business School Author of Disrupting Class (2008) and The Innovative University (2011) Low ranked (under) graduate degree programs High ranked (under) graduate degree programs Top ranked (under) graduate degree programs
- 14. Copyright © 2013 Capgemini Consulting. All rights reserved. The value propositons of the different types of online education compared: 14 Traditional education (on-campus, f2f) OpenCourseWare xMOOCs Online (only) Education Accessibility Selective/inclusive: (high) tuition, admission requirements Free and open access for everyone Free and open access for everyone Selective/inclusive: (high) tuition, admission requirements Instruction / classes Offline (inflexible schedule) Online courses, web-lectures & digital learning materials Online classes & digital learning materials Online courses (flexible schedule), Interaction between students Yes, mainly f2f & off-line No, self learners Yes,peer-to-peer via online learning platforms and social media and ‘MOOC-meetups’ Yes, online learning platforms, virtual classrooms, and social media Quality Control Yes, Accreditation Yes: for content No for process No, only by reputation (professor / ranking) Yes, Accreditation Interaction between studens & faculty Yes, (mainly ) off-line & on-campus No Yes, online learning platforms and social media Yes, online learning platforms and social media Exercises Yes, both individual and in groups Yes, as static teaching materials (no student feedback) Yes, online excercises (quizes) with automated answers & feedback Yes, revised by teacher/faculty staff Exams Yes, on campus & graded by faculty staff Yes, as static teaching materials (no grading) Yes, online & computer graded or by peer-grading Yes, online and graded by faculty staff Identity verification Yes, on campus No Yes: proctored exams in computer based testing centres Yes, through online or on campus identification process Deadlines Yes, fixed terms (semesters, trimesters) No Yes, dedicated course periods during the year as well as deadlines for homework & exams Yes, several starting dates during the year as well as deadlines for homework & exams during coures Certificate Yes, Accredited No Yes, non-formal certificate of completion (by professor a/o UniX) Yes, Accredited Degree Yes, Accredited No No (not yet) Yes, Accredited
- 15. Copyright © 2013 Capgemini Consulting. All rights reserved. The future? Early adoptors are positioning themselves for a new and truly global market for massive (low price) formal certificate & degree awarding online education 15 Traditional universities Time Marketsegments cMOOCFor Profit Universities Self Learner Population (badges) Certificate seeking (non-formal) Degree & Certificate seeking (formal) F2F Campus (formal)
- 16. Copyright © 2013 Capgemini Consulting. All rights reserved. Which will have impact on on the long term financial outlook of incumbant universities 16 Moody’s Investors Service, Credit Outlook Higher Education Institutions USA, US Public Finance, Sept 2012
- 17. Copyright © 2013 Capgemini Consulting. All rights reserved. So are MOOCs a disrputive innovation? YES 17 1. MOOCs are distributed through new digital channels with a potential of attracting millions of visitors, creating valuable digital channels with the potential of new (low price) revenu models that are common in the internet economy (scale now, monetize later). 2. MOOCs serve a global mass market with a new value proposition that till recently was not available or affordable for large groups of students around the world. 3. Some of the MOOC courses provide the same content as on campus courses, and claim to be of the same academic quality. 4. MOOCs are not equal to a campus education, but a stripped down version targeted at a studentpopulation who do not need the full value offered at the high end of the market 5. MOOCs are produced using widely accepted internet technology which enable any lecturer with a high academic reputation to produce a MOOC by themselve and reach a potentially unlimited number of students at a fraction of the cost per student that are needed for delivering traditional (online) university lectures. 6. MOOCs offer a supplement to on-campus courses and are already being integrated in credited (bachelor) degree programs. 7. MOOCs are replacing parts of the regular campus curriculum and thereby start to alter the business model and operating model of brick-and-mortar universities (leading to speciliazation between universities).
- 18. Copyright © 2013 Capgemini Consulting. All rights reserved. Content 1. A brief history of MOOC’s 2. Business impact of MOOCs 3. Strategic scenario’s 18
- 19. Copyright © 2013 Capgemini Consulting. All rights reserved. Nyenrode Business University MIT TUD Stanford Universiteit Leiden Market Segments – focus versus motive 19 AcademicProfessional ProfitNot-for-profit Focusofqualification Motive Duisenberg School of Finance Phoenix University Kaplan University NCOI University of Liverpool OU HS Inholland Universidad Europea de Madrid Avans INSEAD Liberty U NTI DeVry University of Southern California University of Notre Dame
- 20. Copyright © 2013 Capgemini Consulting. All rights reserved. Nyenrode Business University MIT TU Delft Stanford Universiteit Leiden Where do the MOOC Platforms fit in the market for online higher education? 20 Academic (selective) Professional (inclusive) For-ProfitNot-for-profit Focusofqualification Motive Duisenberg School of Finance Phoenix University Kaplan University NCOI University of Liverpool Open University HS Inholland Universidad Europea de Madrid Avans INSEAD Liberty U NTI DeVry University of Notre Dame
- 21. Copyright © 2013 Capgemini Consulting. All rights reserved. Nyenrode Business University Duisenberg School of Finance Universidad Europea de Madrid MIT Delft University of Technology Stanford Erasmus University Rotterdam When the rise of Massive Online Education is viewed as a disruptive innovation, an early adoption strategy for online education differs per market-segment 21 Academic (selective) Professional (inclusive) ProfitNot-for-profit Focusofqualification Motive Phoenix University Kaplan University NCOI Amsterdam University of Applied Science Open University Saxion University of Applied Science LEVERAGE GLOBAL REPUTATION ADD. PROF NETWORK SERVICES LOCALLY APPLIED SCIENCES LOW PRICE FIGHT MARKET
- 22. Copyright © 2013 Capgemini Consulting. All rights reserved. Transform to the power of digital Timo Kos, Principal Consultant Market Leader Education & Employability NL Timo Kos Phone: +31 (0)30 6897540 Mobile: +31 (0)6 47924140 timo.kos@capgemini.com http://linkedin.com/in/timokos http://twitter.com/timokos