Global Online Higher Ed: Matching Content with Demand

By | June 12, 2014

Outside the United States the demand for post-secondary education is at an all-time high. Rapid population growth in Asia, coupled with the need for a increasingly skilled workforce throughout the developing world, has created tremendous demand for high quality technical training and education.   Major vendors  such as Cisco, Microsoft, and SAP have long targeted global communities with their online training and certificate programs.  More recently, much of the growth at online video skills and training providers such as Udemy and Lynda has been from abroad.  And the major MOOC platforms, edX and Coursera, have reported that more than half their registrants are from outside the United States.

Taken together these courses and content create, to be sure, a wholly new level of interactive training available to anyone with a computer and an internet connection.  However the developing world also needs is not commodity content, even high quality content, but customized curricula — specifically scalable, consistently produced online courses that target and complement local universities in the developing world. MOOCs as delivered today, are generally not credit-bearing and, for the time being, fairly arbitrary in their offerings. There is no obligation to offer either a particular course or set of courses on a regular basis. Thus, despite the rich offering of courses, it is difficult to build a curriculum for certificates or degrees.

Custom Course Development and Supply: A Viable Business Model Still Needed

The supplying institutions for the most popular of the online offerings today — those that are free — all are top tier vendors and institutions with healthy balance sheets.  Vendors do so because a large pool of talent familiar with their platforms is strategically important.  Universities that can afford to produce top tier MOOCs are mostly doing so from a marketing angle.

Courses and programs that address region specific problems and opportunities are few and far between. The main reason is that to date there is still no widely accepted business model that supports the development of such custom content at scale.

Unfortunately we believe that truly achieving the revolution in higher education scalable online courses enable will not happen until such a business model is established.  Institutions, departments, and subject matter experts supplying courses must benefit financially on the one side while acquiring institutions must receive access to very high quality targeted curricula on the other.

A Budding Marketplace for Courses and Curricula

The essential economics of the model should be based on matching the supply of courses with large-, but not necessarily massive-, scale demand. Clearly, by serving a larger number of students, course providers can benefit from economic efficiencies and lower per-student costs, which in turn allows for lower tuition per student enrolled—interestingly, these efficiencies begin not at 50,000 or 100,000 students, but instead at 500 and 1,000.

Such a business model is predicated on the basic notion that the entity producing the course need not be the same entity that delivers or certifies the course — known as “unbundling” of higher education. Accepting this basic notion will allow an institution to focus on producing scalable online courses, while a different university acquires and uses these courses as part of their curriculum. The latter might certify or credential the students, or a third party or employer might provide the credentialing. This approach goes a long way to addressing reputational and brand concerns that will almost certainly be among the largest early roadblocks raised within potential partner content-providing educational institutions.

Emerging Now: A Business Model for Scalable Online Course

All successful marketplaces need a clear and sustainable business model. That is the case here. Scalable online courses have the potential to support real and substantial revenues and, in doing so, create a foundation for long-term success benefitting not just providers but acquiring institutions as well.

Damian Saccocio