The Shocking Future of Education in an Era of Corporate Cross-Border Competition
For the condensed presentation files go to http://www.trinity.edu/rjensen/000aaa/updateee.htm

Bob Jensen at Trinity University

Shocking Quotations

Introduction

What has been the "business model" of traditional universities and what were their comparative advantages using this model?

What traditional comparative advantages are plunging or fading in the 21st Century?  

What comparative advantages are growing in importance?

Even though online education alternatives are exploding, isn't the learning and communication inferior to onsite learning in traditional face-to-face classrooms?

What are the new business models for higher education?

"Technology, Higher Education, and a Very Foggy Crystal Ball"

Accreditation Issues

A Crystal Ball Look into the Future

Knowledge Portals and Vortals

Speech Recognition and Audio Access Threads --- http://www.trinity.edu/rjensen/speech.htm 

Invisible Computing, Ubiquitous Computing, and Microsoft.Net --- http://www.trinity.edu/rjensen/ubiquit.htm 

An Innovative Online International Accounting Course on Six Campuses Around the World http://WWW.Trinity.edu/rjensen/255light.htm

Chapter 2 of Jensen and Sandlin (1997) at http://www.trinity.edu/~rjensen/245ch02.htm 

Bob Jensen's Advice to New Faculty

Recommended References and Links 

Nearly Six Hours of Free MP3 Audio and Accompanying Presentation Files
Innovative Learning Programs for Accounting and Business:  the Ivy League Goes Online, the Sloan Foundation Experiments in Asynchronous Learning, and Experiments in Self-Learning at Major Universities Using the BAM Pedagogy

 

 

Shocking Quotations

Whoever it was that first hit on the notion of a university and proposed that a public institution of this kind be established, it was not a bad idea to handle the entire content of learning (really, the thinkers devoted to it) by mass production, so to speak-by a division of labor, so that for every branch of the sciences there would be a public teacher or professor appointed as its trustee, and all of these together would form a kind of learned community called a university (or higher school). The university would have a certain autonomy (since only scholars can pass judgment on scholars as such) and accordingly it would be authorized to perform certain functions through its faculties.
Immanuel Kant, The Conflict of the Faculties, published in 1798 --- See http://www.trinity.edu/rjensen/000aaa/updateee.htm 
Jensen Comment:  In the 21st Century, the really first "mass production" will take place in an era of online competition among corporations and traditional universities seeking to compete in the networked and globally-connected world.

Clayton Christensen has revolutionized how the world sees innovation.  Established companies, he discovered, pursue innovations that support their existing business models --- a practice that blinds them to radical innovations --- ones that often come from out of the same blue.  His longtime study of sustaining versus disruptive technologies has exploded in popularity as a way of interpreting this era of dizzying change.
Thomas Petzinger, Jr. in "Innovation in the Connected Economy:  A Conversation with Clayton Christensen," Perspectives on Business Innovation, Issue 5, September 2000, 6-12 at http://www.businessinnovation.ey.com/journal/loader.html 
Jensen Comment:  Many university administrators and faculties think that sustaining technologies (electronic classrooms and other technology aids for onsite learning) are enough for now.  By avoiding disruptive change, they will be ground up for Mike Milken's lunch.

You guys (traditional colleges) are in trouble and we are going to eat your lunch.
Mike Milken as quoted by Mark Taylor in "Useful Devils," Educause Review, July/August 2000 --- http://www.educause.edu/pub/er/erm00/erm004.html 
Jensen Comment:  What Milken means by "we" is the commercialization of education at all levels (most notably higher education) in online delivery of both training and education courses in both synchronous and asynchronous modes.

Change is never easy and always threatening. Yet change is what keeps institutions as well as people alive. Unfortunately, no institution is more resistant to change than the college and university. Perhaps it has always been so, but now time seems to be running out. If colleges and universities do not overcome their smug satisfaction with how they do business, the Michael Milkens of the world will indeed eat their lunch. The challenge that educators face is to turn the useful devils of business and technology to their own ends. If usefulness is a devil, it’s a devil we must learn to dance with or educational institutions will become more obsolete than they already are. This is neither a threat nor an ultimatum; it is just a fact—a brute fact. And it’s time to face this fact directly and honestly.
"Useful Devils," by Mark C. Taylor, Educause Review, July/August 2000 --- http://www.educause.edu/pub/er/erm00/erm004.html 

Even though a shakeout period for e-business is underway, it is clear that the structure of business has been radically altered and that business as usual will never be usual again.  Will change be as permanent in higher education?  Yes.  All signs indicate that we are on a path to creating a new education" analogous to the "new economy."  The reasons are obvious.  Education is simply too important and our existing methods of delivering it are too expensive, time-consuming, and constrained by established practice not to invite competition.  And the new commutations and computer technologies make competition possible --- actually inevitable.
G.C. Farrington and R.K. Yoshida, Educause Review, November/December, 2000

Let’s start with a simple definition, and then explore some of the variations of portals. At the most basic level, portals gather a variety of useful information resources into a single, “one-stop” Web page, helping the user to avoid being overwhelmed by “infoglut” or feeling lost on the Web. But since no two people have the same interests, portals allow users to customize their information sources by selecting and viewing only the information they find personally useful. Some portals also let you personalize your portal by including private information (such as your stock portfolio or checking account balance). Put simply, an institution’s portal is designed to make an individual’s Web experience more efficient and thereby make the institution as a whole more productive and responsive.
"Portals in Higher Education," by Michael Looney and Peter Lyman, Educause Review, July/August 2000 --- http://www.educause.edu/pub/er/erm00/erm004.html 

Fathom users will have the opportunity to interact and collaborate with the leading experts in their field. Fathom's unique architecture will provide a powerful "search and explore capability" that will allow users to follow their interests, independently or with expert guidance, across the widest possible range of subjects.
http://www.columbia.edu/cu/news/00/04/fathom.html 
For more about knowledge portals, go to http://www.trinity.edu/rjensen/portals.htm 

 


Introduction

Perhaps it is the accountant in me, but when operational revenue grows by over $100 million in just a few years in any university, I take notice! What is becoming clear to me as prestige universities go online is that the revenue potential is a (probably "the") driving force. What amazed me in some discussions that I had in Philadelphia last week is how profitable the online programs are becoming to universities with top brand names. For example, in Stanford's online engineering and computer science training and education courses (you can get a prestigious and asynchronous Masters of Engineering degree online from Stanford) the online revenues exceed $100 million. At Columbia University the numbers are in the same $100 million ballpark from online operations. What is even more important is that the mature mission (traditional onsite education) in these universities will have very limited revenue growth whereas the newer online mission has unbounded growth potential. The cash cows from newer online programs are already feeding new developments and partnerings such as the amazing Fathom knowledge portal at Columbia University.  

My threads on knowledge portals and vortals --- http://www.trinity.edu/rjensen/000aaa/portals.htm 

Clearly, onsite faculty cannot deliver credit courses to thousands or millions of students worldwide. The growth models vary, but the leading model entails having the university do the following things:

  1. develop each course,

  2. own each course, and

  3. be responsible for academic standards when its online courses are delivered by corporate instructors who actually do the instructor-student communications and assign grades. 

Two types of corporations are being formed for corporate course delivery. One type entails a venture corporation commenced by a university (I think you can now buy stock in Duke's new corporation). The other type entails partnering with a wide-reaching existing corporation such as UNext (that now owns an accredited university called Cardean). You can read more about such happenings at http://www.trinity.edu/rjensen/threads.htm#Prestige  (By the way, the Columbia University professor (Michael Kirschenheiter) who developed Columbia's UNext online course and an executive (Steve Orpurt) from UNext who presented modules in my Philadelphia workshops convinced me that UNext is a quality operation at this early point in time.)

Columbia University's Michael Kirschenheiter Audio Clips
Working with UNext to develop a Columbia University course

Click Here for MP3 Audio

Problem Based Learning and course testing process Click Here for MP3 Audio  
Why prestige universities & faculty want to go online Click Here for MP3 Audio 
Columbia owns the course & must maintain academic standards Click Here for MP3 Audio

For more on this, download Professor Kirschenheiter's complete audio and presentation files.  You can download (for free) nearly six hours of MP3 audio and the PowerPoint presentation slides of one of the best education technology workshops that I ever organized.  This was the pre-convention workshop that I organized for the American Accounting Association, August 12, 2000 in Philadelphia.  The speakers, topics, and download instructions are given at http://www.cs.trinity.edu/~rjensen/000cpe/00start.htm 


Question 01
What has been the "business model" of traditional universities and what were their comparative advantages using this model?

The traditional business model has been onsite delivery of courses to students in campus classrooms and laboratories.  The students either live on campus or commute from nearby residences.  In the past the business model has been supply driven with many monopolistic powers.  The main comparative advantage of most universities serving commuting students is a monopoly advantage arising from geographic location.  For example the University of Wisconsin at Oshkosh, until the age of networked education, had a near-monopoly over other higher education alternatives within 50 miles of Oshkosh.

Related to geographic location is the comparative advantage of language.  Universities in Japan have both comparative advantages of geography and language for citizens of Japan.  

The comparative advantage of prestigious universities in attracting full-time students to campus has been a long history of operation, the build up of a huge financial endowment, and the importance of continuing traditions of future generations of students to go to colleges attended by their parents and grandparents.  In the case of leading state universities, the comparative advantage has been a history of being a flagship university within the state.  In the case of leading religious schools such as Notre Dame and Baylor, the comparative advantage is a long history of being a flagship university for the church.  In the case of prominent minority schools such as Howard University, the comparative advantage lies usually in established traditions reinforced by government and corporate financial aid.  Another comparative advantage has been a large and prominent alumni base.  Alumni are sources of donations, students, and employment opportunities for graduates.  

In the case of state universities in general, the comparative advantage has been taxpayer funding that lowers the tuition and fees.

In the past two centuries of higher education in the United States, competition for the best and the brightest students is intense.  But competition was mainly among similar institutions (the peer colleges) that had similar cost structures and production functions.  The market was not segmented to a great extent, and full-line universities faced few threats from suppliers providing specialty programs.  For example, in Wisconsin there was no state university that elected to become the center of accounting education attempting to steal accounting majors from other state universities with 80 courses in accounting and taxation specialties.  This may not be the case by the end of the 21st Century.

In the past, there have been comparative advantages of having a concentration of researchers in specialty areas.  Universities with prestigious doctoral programs attracted higher quality research faculty.  New faculty would sometimes take lower salaries and higher tenure risks just to work closer with top names in a discipline.


Question 02a
What traditional comparative advantages are plunging or fading in the 21st Century?  

The huge comparative advantage of geographical location is plunging .  A major blow to the near-monopoly power of local and regional universities is the threat of distance education alternatives from universities that are more prestigious.  For example, in the very near future a home-bound Oshkosh resident can take a course or get a complete undergraduate/graduate degree diploma from any state-funded Wisconsin university, including the flagship at the University of Wisconsin at Madison.  In addition our Oshkosh resident can obtain diplomas from Stanford University, Columbia University,  Duke University, or the London School of Economics.  Technologies have destroyed geographical comparative advantage, giving rise to competition that was virtually nonexistent before the last decade of the 20th Century.

The comparative advantage of language will falter in the future, especially among leading languages such as English, Spanish, and French.  For example, universities in Japan will one day have competition from universities outside Japan that offer high quality courses in various languages, including Japanese.  A microeconomics course or a business strategy course taught by Columbia University may have online  course materials (text, audio, and video) available in Japanese as well as other languages.  The course instructors may have multiple language skills or international teaching partners that speak different languages.  Sharon Lightner at San Diego State University presently coordinates an international online accounting course in partnership with professors from Switzerland, Spain, and Hong Kong who speak in native tongues in addition to English.  

Even though a large endowment fund will always be important, even its comparative advantage may diminish.  For example, at present Duke University has an enormous endowment.  One day, however, even that might be surpassed by the stockholders equity balance in Duke Education Corporation since the tremendous growth opportunities are in global distance education vis-à-vis the onsite not-for-profit operation.  Other universities have also formed for-profit corporations.  Examples include NYUonline, University of Maryland University College, and Temple University.

For some universities, the comparative advantage of state funding is plunging.  One reason is that with the rise of online alternatives, there will be reduced need for heavy investments in some physical plants.  Does a state really need 28 state supported campuses in the networked era where 10 campuses can serve all residents of the state with courses from the most prestigious 10 campuses in the state?  A second reason is that with the cost savings afforded by newer education technologies, taxpayers will soon be demanding that states reduce the level of state support, especially state support for universities that do not demonstrate increased efficiencies using available technologies.

Taxpayer subsidies for tuition will remain somewhat important, but the importance will fade as online courses become cheaper and cheaper.  Such courses will become cheaper because of the cost savings of online delivery and newer technologies for communication and learning material distribution.

The comparative advantage of scale has faded in importance.  For example, the University of Wisconsin at Madison had an early comparative advantage over the University of Wisconsin at Oshkosh due the large concentration of computing facilities and technicians in Madison.  That advantage is shrinking due to the efficiencies of outsourcing to specialists like eCollege. Blackboard, and HorizonLive.  For more details see http://www.trinity.edu/rjensen/290wp/290wp.htm

The comparative advantage of having a full-line of opportunities for students to choose majors in humanities, science, engineering, business, education, etc. will fade as students will mix and match online courses and degree programs in a variety of institutions.  For example, an online corporate university that elects to offer only business courses will accept humanities core and elective courses from other institutions.  For example, Jones International University (JIU)  is fully accredited online cyber university that only offers three degree programs:

Bachelor of Arts in Business Communication
Master of Arts in Business Communication
Master of Business Administration

This is an example of how corporations intend to segment the education markets and cut into the full-line degree comparative advantages of traditional universities.  There are no biology majors or music majors at JIU.  But JIU will accept transfer credit for biology and music courses taken elsewhere.  Specialties in education may become more lucrative in a manner analogous to how medical specialties are sometimes more lucrative than general practice of medicine.

The online higher education market may become so segmented that specialty courses rarely available on any campus will spring forth from virtual universities.  For example, an online course on Tax Implications of Derivative Financial Instruments may emerge even though the course is not available on any campus.  There may be no students interested in such a course on a given campus, but among all persons in the world, there may be enough students wanting this course to justify its being offered online in a virtual university.

The comparative advantage of campus attractions for living are fading.  The University of Colorado at Boulder can pay lower salaries because so many faculty want to live near mountains and in a relatively small community with short commuting times to campus.  Columbia University has a comparative advantage in attracting faculty who want to be near the New York City culture centers and the financial districts.  In the 21st Century, virtual universities physical locations will not matter and faculty may work out or their homes or in offices located by personal choice.  A distance education instructor will be able to work out of his or her home on a the top of a Colorado mountain, the ocean shore in Maine, a hotel suite on Times Square, or a chalet in Switzerland.  

Except where physical laboratories and expensive equipment are important factors, the comparative advantages of having a concentration of researchers in specialty areas is fading.  Researchers with top reputations now collaborate with comparative ease with co-workers anywhere in the world.  I work closer with some researchers around the world than any single faculty member in my department.  It is no longer such a huge advantage to be at Stanford University if you want to work with a top researcher at Stanford University.


Question 02b
What comparative advantages are growing in importance?

One soaring comparative advantage value of the logo of prestigious universities.  In fact the brand names (logos) of Ivy League universities and other prestigious schools such as the London School of Economics are exploding in value.  Corporations will soon be paying hundreds of millions of dollars to partner with these universities, and the main attraction is the brand name of a university partner.  The discounted present value of a logo such as Columbia or Stanford may well be worth billions of dollars based upon the amazing cash flows these universities are now receiving for very limited online programs and partnerships.  For more details see http://www.trinity.edu/rjensen/245prest.htm

A top administrator at the huge state University of XXXXX phoned me to ask how schools like XXXXX should proceed into this new world. I don't have all the answers, but my first recommendation is for University of XXXXX to partner with similar schools such as ZZZZZ that have huge and powerful alumni connections providing access to top management in many households, corporations, and government. The executive training and education market alone is estimated at $65 billion (which should not all be lost to only a handful of Ivy league online programs).

I am still contemplating if and how I would recommend that small liberal arts universities position themselves in the online "business." If anybody has any ideas, I would like some fresh ideas to take to a presentation that I must do at VVVVV University in a few weeks. Some type of partnering is probably the answer amidst the competition that is emerging from ivy-league type schools. Trinity University might consider its strong connections in Latin America and South America if it decided to partner with other schools to deliver education in the Southern Hemisphere.

To a certain point, threat of extinction can be turned into comparative advantage.  Woodrow Wilson once said that "Changing a University is like moving a cemetery."  Unless there is an outside threat regarding job security, faculty and administrators are very comfortable in there tenure-protected careers and life style freedoms.  These employees have, in the recent past, been a formidable barrier to innovation, change, and adaptations to technology and distance education.  They are less likely to embrace change than employees whose jobs are threatened by program closures or college bankruptcy.  The same can be said about businesses in general.

Clayton Christensen has revolutionized how the world sees innovation.  Established companies, he discovered, pursue innovations that support their existing business models --- a practice that blinds them to radical innovations --- ones that often come from out of the same blue.  His longtime study of sustaining versus disruptive technologies has exploded in popularity as a way of interpreting this era of dizzying change.
Thomas Petzinger, Jr. in "Innovation in the Connected Economy:  A Conversation with Clayton Christensen," Perspectives on Business Innovation, Issue 5, September 2000, 6-12 at http://www.businessinnovation.ey.com/journal/loader.html 


Question 03
Even though online education alternatives are exploding, isn't the learning and communication inferior to onsite learning in traditional face-to-face classrooms?

This is a common question that is too ambiguous to be answered in anything less than 1,000 pages.  First there is the obvious question of what is meant by "learning."  If that term includes learning interpersonal skills and social relationships, there are some rather obvious advantages of face-to-face encounters.  However, research also shows that there are some equally obvious advantages of online encounters.  Pen pals sometimes become closer than brothers living in the same household.  Students who rarely appear in the office of an instructor may have daily email messaging with the instructor that are highly communicative and rewarding.  The same may be said for communications between students in chat rooms and email messages.

Even if the criterion of "learning" is ambiguously defined for experimental purposes, there are huge obstacles in comparing online with onsite education.  One problem is that online learning requires specialized and creative learning materials apart from materials that are suited for onsite courses.  Online learning improves with clever hypertext and hypermedia materials.  Online learning may get poor results due to the poor materials.  Performance outcomes might be greatly improved with improved online materials specially designed for the instructors and the students in an online learning course.  

Another problem is known as the Hawthorne effect problem.  Students may tend to perform better in online courses because they are new and different and, as a result, get a higher level of concentration that cannot be sustained term after term when all courses in an entire degree program are online.

The biggest problem of evaluating the impacts of technologies on learning is that the technologies themselves are changing a breathless pace.  A technology that failed last semester may be replaced by a new technology that succeeds this semester.  This makes it difficult from experiments conducted on obsolete or greatly inferior technology or course content that has been revised for newer technologies.

The multi-million dollar, multi-year SCALE experiments comparing asynchronous versus traditional classroom communication and learning at the University of Illinois suggest that online courses tend to increase communications between instructors and students with course grade performance as good as grades in traditional courses.  In some cases the asynchronous course grades are dramatically higher.  References of possible interest along these lines are shown below:


Question 04
What are the new business models for higher education?

The old business model will continue to thrive/survive for some universities, especially universities having excellent dormitories, fraternity/sorority traditions, and established reputations for full-time undergraduate living, learning, and growing up.  My own university, Trinity University, will continue to survive because of its excellent dormitories, established traditions of small classes, the many years it has been rated as Number 1 of the West by U.S. News, and its huge endowment.  Trinity, along with other universities that have established traditions as places to send fresh high school graduates, will continue to thrive or survive because parents their children to mature socially and well as intellectually outside the family home before being thrust on the streets of the real world.

But universities such as Trinity that carry on with full-time resident students under the present "business models," will experience very little growth in revenue from the traditional onsite "business" model of serving mainly resident students.  Many universities such as Stanford University are experimenting with new (online) business models for distributed education while maintaining the old business model for onsite students.  Traditional onsite programs will have almost no revenue growth in the onsite traditional model and limitless growth in the fledgling online models.

The old business model will change the most among prestigious universities and flagship state universities.  Probably the biggest shock in higher education was the ADEPT program that made a Masters of Engineering available online to thousands of engineers who have taken advantage of the program to date.  The diploma carries the same respect as a diploma for onsite students in Stanford's onsite masters degree in engineering.  Similarly, Duke University shocked the world with its global MBA (GEMBA) online executive MBA degree program (which unlike ADEPT, entails mostly a synchronous pedagogy where students from all parts of the world meet at the same time in virtual classrooms where they see and hear each other much like in a traditional classroom).  Flagship universities have already expanded their business models.  One example is the addition of Penn State Virtual University as an alternative to the traditional "business" models at Penn State for onsite education programs.

One form of business model change is for a prestigious university to form a for-profit-corporation to capitalize on its logo for global expansion of its education programs.  A great example here is the Duke Education CorporationOther universities have also formed for-profit corporations.  Examples include NYUonline, University of Maryland University College, and Temple University.  The new business model is a corporation that can borrow money, sell stock, and earn profits to reinvest or distribute to shareholders in the form of dividends.  It is no longer bound to raising money from existing budgets and endowments of Duke University.  It can raise capital and manage its ventures in ways that are impossible or impractical under the not-for-profit constraints and bureaucratic infrastructure of Duke University.

A second, and probably more popular business model, is for a prestigious university to capitalize on its name brand by partnering with a corporation to conduct the distance education operations of online programs.  A top example is the partnering of UNext Corporation with Columbia University, Carnegie-Mellon University, Stanford University, the University of Chicago, and the London School of Economics.  Whatever UNext paid these universities for initially for developing 15 business courses is not as relevant as to what the future holds for the partnership as a whole.  Each course will remain the property of the university that developed the course specially for online delivery around the world by UNext.  Each university will remain responsible for the course quality and the academic standards (including student grades) even though specially-trained UNext instructors will actually teach the online students and be responsible for communications between instructors and students.  The universities and UNext shareholders will both profit for many years to come if the partnership succeeds under this new and untested business model for higher education.


"Technology, Higher Education, and a Very Foggy Crystal Ball"

I recommend "Technology, Higher Education, and a Very Foggy Crystal Ball," by Brian L. Hawkins, Educause Review, November/December, pp. 65-73.
  1. The New Market Will Be Smaller Than Often Predicted.
    Excerpt:
    Some studies have suggested that more than 128 million new FTEs will be added to the market, in addition to the roughly 4 million additional FTEs entering traditional forms of higher education.  Although these numbers would tempt any entrepreneur, they contain assumptions that may exaggerate the "real" size of the marketplace.  For example, part of the 100 million non-U.S.-based potential FTEs will not want a curriculum presented in English.  While some of the subject matter will transcend language, other elements will not.  There also may be significant cultural challenges.  How effectively will a U.S.-based curriculum enable residents of India or Africa to master computer skills?

    Jensen Comment:
    Hawkins does not mention it, but there will also be an added problem for corporations and colleges trying to expand online fee-based training and education programs.   Free knowledge on the web will cut into the demand for pay sites.  For example, the many free sites listed at LibrarySpot ( http://www.libraryspot.com/ ) have struck a heavy blow on companies attempting to sell encyclopedias, thesauri, dictionaries, almanacs, etc.  Universities may become their own worst enemies.  What will have a heavy impact on education providers will be free knowledge portals such a Columbia's Fathom portal that will provide free tutorials, highest quality drill down tutorials, and very easy-to-find tutorials on a vast array of knowledge.  See http://www.trinity.edu/rjensen/000aaa/portals.htm 

  2. Residential Campuses Will Still Be Significant.
    Excerpt:

    In discussions about distributed education, people often draw the erroneous conclusion that residential education is doomed to a downward spiral.  However, significant erosion of residential education is actually quite unlikely, for two reasons.  First, residential education works.  It is a highly successful formative experience, proven in its ability to move late adolescents across the transom to intellectual and emotional maturity.  Once a "safe haven" available only to the elite, residential higher education has become increasingly accessible over the last fifty years.  The trend is toward more inclusion, not away from it, and this is good.  Residential education provides young people the opportunity to experiment and to explore various academic directions.  It produces positive outcomes in the long run for the students and society.  Whereas this argument can be applied to nontraditional students as well, it is particularly appropriate for the 18-to-22 year-old population.

    Jensen Comment
    Hawkins fails to put growth into perspective.  Even though onsite education is growing, its growth potential is miniscule compared with the growth potential of online education.  At Stanford University, the growth of online revenues in just a few years soared from zero to over $100 million from very limited online experiments in online delivery.  Columbia University has had similar online cash flows.  Onsite campus revenue growth in those universities pale in comparison with the billions of dollars those universities will be receiving from online distance training and education operations in the 21st Century.

  3. An Erosion of Traditional Markets Will Occur.
    Excerpt:
    The most cost-effective departments offer large lecture courses, have minimal library needs, and use high numbers of adjunct faculty.  With low overhead, significant net revenues are possible.  This paradigm is especially evident in schools and colleges of business, and business students are precisely the target market that many of the for-profit competitors are seeking to develop and attract.  This is important because profitable programs are used to subsidize unprofitable ones, helping the college or university achieve its balanced mission of offering courses in a broad spectrum of disciplines.

    The economics of cross-subsidization are not well understood by most members of the campus community.  However, mastering these concepts is essential for coherent planning regarding distributed learning programs.  If a proprietary program, such as an asynchronous business program, begins to significantly erode the enrollments of a given institution's residential program, it will also negatively affect the cross-subsidized economics of other disciplinary units.  This is a particular problem if courses on the network become commodities, resulting in extremely low-cost, academically acceptable course alternatives.  Furthermore, depending on the pricing structure, an institution's new distributed learning program may also destabilize the economic models that a college or university uses to operate in a prudent manner.  The point here is that both internal and external distributed learning efforts may affect the entire economy of the institution.

  4. Institutions Will Not Effectively Participate as Stand-Alone Entities.
    Excerpt:

    Those in higher education have long assumed that not-for-profit educational efforts result in a higher-quality product than commercial efforts.  Yet institutions need to throw off their defensiveness, question this assumption, and embrace the fact that combined for-profit and traditional institutional partnerships may be some of the most successful models for creating and delivering these new learning environments.

    Can higher education learn to effectively "partner" with other not-for-profit and with for-profit ventures?  Its track record so far is not good.  Effective online learning models will rely heavily on collaboration and coordination with external entities.  If higher education develops that ability, new opportunities and new leveraging will result, increasing the likelihood of success.  Yet the jury is still out on whether our institutions can develop these skills.  We may continue to bungle along, to our collective long-term detriment.

    Jensen Comment:

    What Hawkins does not point out is that universities do not necessarily have to partner with corporations in order to raise capital for online programs.  Both Columbia University and Duke University have formed for-profit corporations for online delivery of education under the extended logos of the not-for-profit onsite counterparts.  For example, Duke University formed the Duke Education Corporation.  This is a for-profit company that can sell stock to the public and tap the world capital markets for growth fund.

    Also Hawkins did not stress at this point is the tremendous impact brand name (logo) will have upon success or failure of education programs of the 21st Century.  Prior to the 21st Century, geographic location overcame much of the importance of brand name (logo) on a diploma.  Most students could not be accepted into the top brand (e.g., Ivy League schools and top liberal arts colleges) or they could not afford the tuition and on-campus living expenses.  

    In the 21st Century, students may stay at home and take distance education (synchronous and asynchronous) in their homes across the world.  Geographic comparative advantage will shrink and shrink and shrink.  More importantly, excellent students who could not be accepted as onsite students in prestige universities (due to lack of financing and constraints as to how many can fit into onsite classrooms) face new opportunities to get a prestige degree in their own homes.  Stanford's ADEPT online Masters of Engineering Degree (asynchronous) and Duke's online Global MBA (synchronous) have already provided thousands of students with prestigious diplomas.  Those graduates did not have to attend classes on campus, and their diplomas have the same branded quality as onsite program diplomas.


    Whereas an unknown Microsoft could surpass the prestigious IBM software products, this will not be so easy for upstart education corporations.  Software customers can make decisions on what the software does for them.  Education customers, however, must be more concerned about how the outside world views the prestige of their diplomas.  An online degree from the hypothetical UpNext Corporation may be of higher quality than a Columbia University degree in a given field, but the world will place greater emphasis on the brand name of Columbia University on the diploma.  As a result, UpNext Corporation may pay millions to partner with a prestige university with the main purpose of buying into the logo on the diploma.   

    Two websites of interest along these lines are as follows:

           http://www.trinity.edu/rjensen/245prest.htm 

           http://www.cs.trinity.edu/~rjensen/000cpe/00start.htm 
           (with nearly six hours of
    audio)

    The major problem faced by prestige universities entering into online ventures lies in deciding how many students to admit into online programs.  Probably the most important ingredient in both obtaining and maintaining prestige is selectivity of admissions among the best students of the world.  Prestigious universities can expand into online markets and maintain prestige only as long as admissions remain highly selective.  For example, the online ADEPT Masters of Engineering Degree at Stanford University has high admission standards consistent with its onsite admissions standards.  The Global Executive MBA Degree at Duke University is very selective when evaluating candidates from around the world.   If these programs partnered with a (hypothetical) UpNext Corporation to deliver these degree programs to over one million students worldwide, the prestige of the degrees and the universities would suffer due to less selective admissions.  

    Neither on a stand-alone basis nor in partnership with educational delivery corporations can highest prestige be maintained without selective online program admissions consistent with elitist traditions of the onsite campus programs.  Perhaps this is why prestigious universities such as Stanford University have tended to focus more on online training courses (especially in computer engineering and computer science) rather than courses granting degree credits.  Stanford is presently delivering online training courses with much less rigorous admission standards than the admission standards for both online and onsite education courses.


  5. There Will Be a Significant Market Shakeout.
    Excerpt:

    Ultimately, the shakeout in distributed learning will be driven by the marketplace.  Although many traditional institutions continue to believe they will be the "net providers" of these courses, eventually they will realize the need to become the "net purchasers."  Only after colleges and universities realize that there will be no untold riches coming from this new set of educational ventures will higher education institutions start to make decisions on the price and quality of these courses and on the leverage they provide.  Ultimately, these market factors will define the market shakeout in distributed learning.

  6. New Extra-Institutional Solutions Will Likely Be Required.
    Excerpt:

    Can a distributed learning "business" operate effectively within the confines of the traditional college or university given the current faculty governance model?  Conversely, can our current faculty governance model work in the new market environment?  The answer is "no": successful distributed learning programs will require a more dynamic, more flexible governance model.  It is highly unlikely that a model bolted on to our existing structures would be able to achieve the flexibility, nimbleness, and responsiveness that these new business models may require.

  7. The New Marketplace Will Be Associated with New Models of Faculty Motivation.
    Excerpt:

    Attracting and motivating a new breed of entrepreneurial faculty is likely to be an important challenge.  Some faculty will undoubtedly be willing to trade the security and assurances associated with a tenured position for greater economic opportunities and pay-offs.  If they don't find these options within the academy, they will seek them in the dot-com world.  A wide variety of employment models for faculty recruitment and retention may well be required, but such an approach will be difficult, if not impossible, within the confines of traditional faculty governance and the rather singular set of employment rules at most institutions.

    Although the focus here is on courses offered to students at a distance, the issues apply equally to the traditional campus environment, where faculty need to change their teaching methods to relate to the new learning styles of today's students.  The economics associated with implementing a campus-wide faculty support infrastructure, including course-management systems, are daunting.  Those higher education institutions that are able to quickly devise new conventions for faculty support will have the more felicitous economic position in this changing era of higher education.  Once again, the question turns on the degree of flexibility and adaptability that colleges and universities can develop.

    Jensen Comment:
    One of the emerging problems will be the changing needs for funding of basic research.  Major research universities have tended to subsidize basic research from teaching revenues, especially in disciplines outside the hard sciences.  Much of the basic research of the world depends upon such subsidies since corporations tend to fund mainly applied research.  

    Persons with research credentials and skills generally receive high (usually highest) rewards possible by focusing on basic research in universities.  Thriving online education corporations may one day change the reward structures for both money and life style to where the best and brightest faculty can receive much higher salaries, stock options, and benefits by focusing on teaching and the development of online knowledge bases as opposed to basic research.  For example, an online instructor will not have to commute to work.  He or she may work from a mountain top in Colorado, a chalet in Switzerland, or an island off the coast of Maine.  Universities themselves may begin to challenge the benefits and cost of basic research.  In the past, benefits of basic research were mainly measured in terms of leading journal hits.  In the future, administrators may begin to question what the net benefit to the university really is from journal hits that are not in some way more directly associated with the teaching mission of the institution.  It may well be that new ways of funding basic research will have to be found, especially in disciplines where basic research is not funded by either the government or the private sector.  And the funding will have to be significant to compete for talent with the online corporate education world.

    A related issue is the importance of the traditional PhD degree.  PhD programs focus on research skills.  In the 21st Century, we may see the emergence of some type of advanced degree such as CaEE depicting a certified area of educational expertise.  For selected types of online education, a CaEE may eventually be rewarded more than a PhD diploma.  For example, having a CaEE in international taxation may be more important for online international tax teaching than a PhD in tax research.  If the laws of supply and demand prevail on reward structures, a CaEE may be in very short supply relative to demand among online education corporations and universities.  This, in turn, might induce the brightest students to seek after a CaEE rather than a PhD credential, and in the loss of the best students may degrade the quality of basic research.

  8. The Technology Will Transform College and University Operations.
    Excerpt:

    If such networked communication devices become as important as many predict, a new question arises.  Will that new generation of technology help reduce the digital divide that we are currently experiencing (and seeing widen) in our society, or will the new technology widen the divide even further?  If the technology becomes ubiquitous, and if these other technological changes occur as well, the fundamental operations and the available learning will reshape the "face" of higher education for an ever-larger segment of our society.

  9. The Necessary Library Infrastructure Will Be Missing.
    Excerpt:

    How can colleges and universities provide access to a sufficiently rich and comprehensive body of electronic resources in this distributed environment?  Many institutions have developed initial approaches to offering courses over the Internet, but few, if any, have defined a scalable and viable strategy for making "library" resources available to "distant" learners.  The provision of electronic links to appropriate course-supporting materials has been left to individual faculty members (and, indeed, to the students enrolled in the courses), none of whom have access to the types of services provided by librariesin the traditional campus setting.  Moreover, providing electronic access is extremely difficult under current copyright limitations, which require closed access, key servers, or other restrictions.  The new Digital Millennium Copyright Act (DMCA) has all but erased the issue of fair use.  As a result, defining a strategy, in a distributed learning environment, to provide students with adequate access to primary source material is unclear at best.

    Jensen Comment:
    This is one of the major obstacles to many online programs, especially with unique library collections that cannot be viewed at any place other than onsite at a particular library.  Often, however, some collections such as rare books can legally be viewed via document cameras.  This prevents damage to rare books and makes it easier to view such books remotely.

    The major common problem lies in hard copy documents that cannot be distributed to multiple users across networks due to copyright restrictions.  This problem can be solved in some ways.  Copyright restrictions cannot prevent inter-library loan checkout services, and such services may become more widespread and efficient.  Important items can be shipped overnight.   Napster-like sharing of hard copy may become widespread where owners of copyrighted documents more willingly share these documents. 

    In the U.S., students and faculty can obtain one photocopy of journal articles using inter-library loan services.  Most "card catalog" collections of libraries can now be viewed electronically to help students browse for documents to be requested via inter-library loan.

     Increasingly publishers allow copyrighted books and journals to be distributed in digital form at greatly reduced prices.  WizeUp sells the leading textbooks of the major publishing houses in electronic form at "prices below the cost of used books."  Special devices like the Rocket e-Book, the SoftBook, and the Everybook afford publishers greater copying protections than hardcopy.  For more information on these products and companies like WizeUp, go to http://www.trinity.edu/rjensen/ebooks.htm.


    Librarians themselves will play a larger role in overcoming problems of infrastructure.  One example of this is at University of Maryland University College where students can "chat" with librarians online and ask any questions they might have. Librarians will have to be proactive and learn about the new technologies and make the materials available to students all over the world.

  10. There Will Be an Increase in Institutional Market Segmentation.
    Except:

    The higher education enterprise will be fundamentally different in the next decade or so, with much greater segmentation in the market than we currently find.  For the past several decades, higher education has made an almost inexorable march toward homogeneity, with the vast majority of institutions trying to climb up the "food chain" defined by the Carnegie classifications.  But even as the new technology has created greater possibilities for advancing teaching and learning, higher education has continued to focus on increasing the research agenda.  Institutions will need to be far more selective in choosing content areas to focus on and will need to compete for that intellectual space in a much more aggressive manner.



Accreditation Issues

For general background on accreditation, you can enter the search term "Accreditation" at http://ifap.ed.gov/dev_csb/new/srchsite.nsf/Web+Search+Simple?OpenForm 

There are three sources of accreditation:

Richard Newmark forwarded the following information to me about the relatively new Association for Online Excellence:

For a new entity, AOAE has been quite busy -- they've accredited schools from Adams State College to Youngstown State University. ( http://www.aoaex.org/pbo.htm  ) 

You might want to check to see if your university is on the list -- and the university legal department might want to contact AOAE.

On a related note, tomorrow (Tuesday July 18) I'll be offering an online chat focusing on how to evaluate school websites from 1 to 3, Central time. Drop by http://www.distancelearn.about.com/mpchat.htm to join in.

.Kristin Evenson Hirst 
About.com Guide to Distance Learning
 
http://distancelearn.about.com/  
email: distancelearn.guide@about.com

AOAE has a relatively long list accredited programs, including some major colleges and universities.
Association for Online Excellence

 

Question:  What major publishing company is seeking full accreditation of its corporate university?
Click here for the answer!

 


A Crystal Ball Look Into the Future

Judith Boettcher in Syllabus, June 1999, 18-24 Judith Boettcher is affiliated with CREN. She predicts the following scenarios (which appear to be heavily in line with the emerging WGU programs mentioned above):

1.  A "career university" sector will be in place (with important partnerships of major corporations with prestige universities).

2.  Most higher education institutions, perhaps 60 percent, will have teaching and learning management software systems linked to their back office administration systems.

3.  New career universities will focus on certifications, modular degrees, and skill sets.

4.  The link between courses and content for courses will be broken.

5.  Faculty work and roles will make a dramatic shift toward specialization (with less stress upon one person being responsible for the learning material in an entire course).
(Outsourcing Academics http://www.outsourcing-academics.com/ )

6.  Students will be savvy consumers of educational services (which is consistent with the Chronicle of Higher Education article at http://chronicle.com/free/99/05/99052701t.htm   ).

7.  The tools for teaching and learning will become as portable and ubiquitous as paper and books are today.

An abstract from On the Horizon http://horizon.unc.edu/horizon/online/login.asp  
Will Universities Be Relics? What Happens When an Irresistible Force Meets an Immovable Object? John W. Hibbs

Peter Drucker predicts that, in 30 years, the traditional university will be nothing more than a relic.    Should we listen or laugh? Hibbs examines Drucker's prophesy in the light of other unbelievable events, including the rapid transformation of the Soviet Union "from an invincible Evil Empire into just another meek door-knocker at International Monetary Fund headquarters." Given the mobility and cost concerns of today's students, as well as the growing tendency of employers to evaluate job-seekers' competencies rather than their institutional affiliations, Hibbs agrees that the brick-and-mortar university is doomed to extinction.

 

Time Frame and Feasibility for Technology Acquisition
"Advanced Technologies and Distributed Learning," by Chris Dede, 
Higher Education in an Era of Digital Competition
Edited by D.E. Hanna (Madison, WI:  Atwood Publishing, IBN 1-891859-32-3, 2000, pp. 73-74)
Functionality Uses Time Frame
Hypermedia (nonlinear traversal of multimedia information)

Interlinking of diverse subject matter; easier conceptual exploration; multiple simultaneous representations for learning Current
Cognitive audit trails (automatic recording of user actions) Support for finding patterns of sub-optimal performance Current
Computer-supported cooperative work (design, problem solving, decision support) Facilitation of team task performance

Current
Intelligent tutors and coaches for restricted domains Models of embedded expertise for greater individualization Current
Optical-disc systems with multiple read/write and mixed media capabilities
Support of large data-bases; cheap secondary storage; shared distributed virtual environments Current
Standardization of computer and telecommunications protocols Easy connectivity, compatibility; lower costs Current
User-specific, limited vocabulary voice recognition Restricted natural language input
Current
High-quality voice synthesis Auditor natural language output Current
Sophisticated authoring and user interface management systems
Easier development of applications; reduced time for novices to master a program Current
Widespread, high-bandwidth, fiber optic networks Massive real-time data exchange
3-5 years
Fusion of computers, telecommunications Easy interconnection; universal "information appliances" 3-5 years
Information "utilities" (synthesis of media, databases, and communications) Access to integrated sources of data and tools for assimilation 3-5 years
Microworlds (limited alternate realities with user control over rules) Experience in applying theoretical information in practical situations 3-5 years
Semi-intelligent computational agents embedded in applications Support for user-defined independent actions 5-7 years
Advanced manipulatory input devices (e.g., gesture gloves with tactile feedback) Mimetic learning that builds on real-world experience
5-7 years
Artificial realities (immersive, multi-sensory virtual worlds) Intensely motivating simulation and virtual experience 7-10years
"Information appliance" performance equivalent to current supercomputers Sufficient power for simultaneous advanced functionalities 7-10 years
Consciousness sensors (input of user biofeedback into computer) Monitoring of mood, state of mind
7-10 years
Artifacts with embedded semi-intelligence and wireless interconnections Inclusion of smart devices in real-world settings
2010+

 

 



Recommended References and Links

Bob Jensen's Threads at http://www.trinity.edu/rjensen/threads.htm 

Higher Education in an Era of Digital Competition Edited by D.E. Hanna (Madison, WI:  Atwood Publishing, IBN 1-891859-32-3, 2000).

Michael G. Dolence and Donald M. Norris, Transforming Higher Education: A Vision for Learning in the 21st Century (Ann Arbor, Mich.: Society for College and University Planning, 1995); William B. Johnston, "Global Workforce 2000: The New World Labor Market," Harvard Business Review (March/April 1991).

James J. Duderstadt, "Can Colleges and Universities Survive in the Information Age?" in Richard N. Katz, ed., Dancing with the Devil: Information Technology and the New Competition in Higher Education, (San Francisco: Jossey-Bass Publishers, 1999), 1-25.

147 Practical Tips for Teaching Online Groups:  Essentials of Web-Based Education, by Donald E. Hanna, Michelle Glowacki-Dudka, and Simone Conceicao-Runlee [Overland Park, KS: Atwood Publishing, 2000. ISBN: 189185934X, $12.50 US], is a "how-to guide for college professors, schoolteachers, and workplace educators." Drawing upon their extensive experience in educational communications and instructional design and technology, the authors "describe the reasonable expectations that professors should have of their students; copyright issues that pertain to course content; ways of interacting with students, like bulletin boards and shared documents; and methods of evaluating students online, including portfolios and peer assessments." They also debunk some myths of online teaching regarding time requirements, number of students an instructor can handle, and the reliability of the technology. A review of the book is available online at http://chronicle.com/teaching/books/2000091101b.htm

If you are interested in technology trends, and in particular macro strategies and the broad impact of technologies on business, finance, accounting, and economics, a must see website is http://www.businessinnovation.ey.com/ 


You can download (for free) nearly six hours of MP3 audio and the PowerPoint presentation slides of one of the best education technology workshops that I ever organized.  This was the pre-convention workshop that I organized for the American Accounting Association, August 12, 2000 in Philadelphia.  The speakers, topics, and download instructions are given at http://www.cs.trinity.edu/~rjensen/000cpe/00start.htm 

The presentations apply to education in general and are not particularly focused on accounting and business education.

Workshop Title
Innovative Learning Programs for Accounting and Business:  the Ivy League Goes Online, the Sloan Foundation Experiments in Asynchronous Learning, and Experiments in Self-Learning at Major Universities Using the BAM Pedagogy

Topics include the following:

You can download all of this for free or, alternately, order it all on a CD-ROM by following instructions at given at http://www.cs.trinity.edu/~rjensen/000cpe/00start.htm