The Virtualization of Higher Education
Place your bets. Who is going to win the “virtual university” wars? Will it be the great institutions of yore with their high brand-name recognition: the Oxfords, Harvards, Stanfords, et al.? Will some upstart take over as the preeminent online educator, the Amazon.com of the academic world? And where will corporate universities fit into the mix?
There are no answers yet, but there are plenty of signs that “virtualization” will create market chaos for traditional colleges and universities. In industrialized nations, the Internet is the big driver of this process, whereby online courses supplement or even replace traditional, classroom-based courses. Virtualization is well under way, especially in the U.S., where 75% of universities will offer online coursework by the end of this year. And yet this is only the tip of the iceberg. Online courses represent just $350 million of the $240 billion U.S. higher-education industry, according to Merrill Lynch. It’s predicted that this will grow to $2 billion by 2003.
Innovation and entrepreneurship are a big part of the move toward online education. As a Newsweek article recently reported, venture capitalists have been pouring millions into distance learning, funding companies such as UNext.com, University Access and Pensare. Not to be left out of this gold rush, some traditional universities are teaming up with for-profits to deliver university-developed online education, often targeting online courses to corporations. UNext’s Web site, for example, reports that it is collaborating and “co-branding” with the likes of Columbia University, the University of Chicago, Stanford University, the London School of Economics and Carnegie Mellon University.
It is probably dangerous for traditional colleges to ignore the virtualization of higher education. “As knowledge becomes the central resource of postcapitalist society, the social position of schools as ‘producer’ and ‘distributive channel’ of knowledge, and its monopoly, are both bound to be challenged. And some of these competitors are bound to succeed,” says business philosopher Peter F. Drucker. Prof. Samuel L. Dunn, writing in The Futurist, recently predicted that 10% of existing public colleges and 50% of independent colleges will close in the next 25 years as they fail to survive the online onslaught.
As the competitive turmoil ensues and new high-speed Internet technologies are developed, there will probably be a blurring of the lines between distance learning and local education. Dunn predicts that even much local education will come to rely on top-notch “courseware” -- digitally delivered, state-of-the-art college interactive courses that are so excellent and comprehensive that they become educational standards. Just as Microsoft has developed the most widely used word processing software, some entity may well develop the most widely used “Introduction to Accounting” application, a piece of courseware that could be used in colleges around the nation. Perhaps this courseware will be created with the help of “superstar” professors, the top people in their fields. Dunn predicts that the vast majority of university instruction will be digitally enhanced within the next 25 years.
This isn’t to say that bricks-and-mortar colleges will disappear. Indeed, some universities are already creating hybrid programs that try to leverage the strengths of both online and local education. For example, Duke University’s online MBA program requires students to spend five weeks on campus and an additional two weeks each taking classes in Germany, Brazil and China. Outside of trips to the campus, a typical student can go over a lecture from a CD-ROM, check class e- mail and get ready for a chat session with classmates who are working together on a case study.
Over the long run, it’s hard to predict how these trends will affect the cost of higher education. Some predict that it will drastically reduce costs. Others point to online degrees from some top universities that are even more expensive than their traditional degrees. It’s possible that a multi-tier system could develop. At one level, there could be relatively inexpensive online-only education in which communications with real professors are kept to a minimum. On another level, there could be more elitist and expensive programs that combine high- quality interactive courseware with lots of real-time, real-space chats with renowned professors. Although such a multi-tiered system could make higher education generally more accessible, there would still be a gap between the elite universities and other schools.
Whatever else happens, distance learning will provide firms with ever more options for keeping their employees well educated. After all, many of the distance-learning start-ups are marketing to corporations, giving these organizations greater leverage than they’ve historically had with traditional universities. Firms will be able to develop flexible distance-learning partnerships and agreements.
Insurance company UnitedHealth Group is an example of a firm that has used a partnership to create an online learning opportunity for its employees, according to the Journal of Business Strategy. Using a consortium model, UnitedHealth partnered with United Technologies Corp., which had similar training needs. They then enlisted the Rennselaer Polytechnic Institute (RPI) to train their combined workforce. RPI uses compressed video technology to deliver degree programs from Boston University, Carnegie Mellon, Stanford and MIT. Since the firms started collaborating, they have found other partners to share costs. Allen Stein, director of UnitedHealth’s corporate university, states, "Companies struggle to get very high quality management and leadership training because they can't afford it. But if you form a consortium of companies with very similar needs you can bargain, and therefore get very high quality training at a lower price."
====================================================
For a look at some of the new online learning organizations, see the following Web sites:
http://unext.com/
http://www.universityaccess.com/
http://www.pensare.com/
http://www.jonesinternational.edu/.
There are no answers yet, but there are plenty of signs that “virtualization” will create market chaos for traditional colleges and universities. In industrialized nations, the Internet is the big driver of this process, whereby online courses supplement or even replace traditional, classroom-based courses. Virtualization is well under way, especially in the U.S., where 75% of universities will offer online coursework by the end of this year. And yet this is only the tip of the iceberg. Online courses represent just $350 million of the $240 billion U.S. higher-education industry, according to Merrill Lynch. It’s predicted that this will grow to $2 billion by 2003.
Innovation and entrepreneurship are a big part of the move toward online education. As a Newsweek article recently reported, venture capitalists have been pouring millions into distance learning, funding companies such as UNext.com, University Access and Pensare. Not to be left out of this gold rush, some traditional universities are teaming up with for-profits to deliver university-developed online education, often targeting online courses to corporations. UNext’s Web site, for example, reports that it is collaborating and “co-branding” with the likes of Columbia University, the University of Chicago, Stanford University, the London School of Economics and Carnegie Mellon University.
It is probably dangerous for traditional colleges to ignore the virtualization of higher education. “As knowledge becomes the central resource of postcapitalist society, the social position of schools as ‘producer’ and ‘distributive channel’ of knowledge, and its monopoly, are both bound to be challenged. And some of these competitors are bound to succeed,” says business philosopher Peter F. Drucker. Prof. Samuel L. Dunn, writing in The Futurist, recently predicted that 10% of existing public colleges and 50% of independent colleges will close in the next 25 years as they fail to survive the online onslaught.
As the competitive turmoil ensues and new high-speed Internet technologies are developed, there will probably be a blurring of the lines between distance learning and local education. Dunn predicts that even much local education will come to rely on top-notch “courseware” -- digitally delivered, state-of-the-art college interactive courses that are so excellent and comprehensive that they become educational standards. Just as Microsoft has developed the most widely used word processing software, some entity may well develop the most widely used “Introduction to Accounting” application, a piece of courseware that could be used in colleges around the nation. Perhaps this courseware will be created with the help of “superstar” professors, the top people in their fields. Dunn predicts that the vast majority of university instruction will be digitally enhanced within the next 25 years.
This isn’t to say that bricks-and-mortar colleges will disappear. Indeed, some universities are already creating hybrid programs that try to leverage the strengths of both online and local education. For example, Duke University’s online MBA program requires students to spend five weeks on campus and an additional two weeks each taking classes in Germany, Brazil and China. Outside of trips to the campus, a typical student can go over a lecture from a CD-ROM, check class e- mail and get ready for a chat session with classmates who are working together on a case study.
Over the long run, it’s hard to predict how these trends will affect the cost of higher education. Some predict that it will drastically reduce costs. Others point to online degrees from some top universities that are even more expensive than their traditional degrees. It’s possible that a multi-tier system could develop. At one level, there could be relatively inexpensive online-only education in which communications with real professors are kept to a minimum. On another level, there could be more elitist and expensive programs that combine high- quality interactive courseware with lots of real-time, real-space chats with renowned professors. Although such a multi-tiered system could make higher education generally more accessible, there would still be a gap between the elite universities and other schools.
Whatever else happens, distance learning will provide firms with ever more options for keeping their employees well educated. After all, many of the distance-learning start-ups are marketing to corporations, giving these organizations greater leverage than they’ve historically had with traditional universities. Firms will be able to develop flexible distance-learning partnerships and agreements.
Insurance company UnitedHealth Group is an example of a firm that has used a partnership to create an online learning opportunity for its employees, according to the Journal of Business Strategy. Using a consortium model, UnitedHealth partnered with United Technologies Corp., which had similar training needs. They then enlisted the Rennselaer Polytechnic Institute (RPI) to train their combined workforce. RPI uses compressed video technology to deliver degree programs from Boston University, Carnegie Mellon, Stanford and MIT. Since the firms started collaborating, they have found other partners to share costs. Allen Stein, director of UnitedHealth’s corporate university, states, "Companies struggle to get very high quality management and leadership training because they can't afford it. But if you form a consortium of companies with very similar needs you can bargain, and therefore get very high quality training at a lower price."
====================================================
For a look at some of the new online learning organizations, see the following Web sites:
http://unext.com/
http://www.universityaccess.com/
http://www.pensare.com/
http://www.jonesinternational.edu/.