In part I of this series, How a course-rich world might impact higher education: I. Technology vs pedagogy, I looked at some of the characteristics of the readily-available new college level courses (NCLCs) that have created a course-rich world. In this post, I discuss using this new course-rich resource to create new institutions using higher education business models that are radically different from the faculty-centric model that is traditional in higher education.
In these new models few, if any, traditional, permanent faculty are needed to produce the educational product, which is provided primarily by the NCLCs. Social media increasingly is used to both improve learning and create peer relationships. Examples of such models can be found among the many organizations trying to provide essentially free degrees (e.g. University of the People), parts of typical degrees such as the first two years (e.g. StraighterLine), and lower-cost degrees (e.g. WGU).
As is obvious from these examples, the change in the Resource box of the business model fueled by the NCLCs enables great changes the Process box of the traditional business model. The new Process is online, generally asynchronous and therefore on-demand, generally self paced, not dependent on seat time. Faculty, if there are any, serve primarily as online mentors. These changes in Process impact the Profit Formula box by radically decreasing personnel and facilities costs. Overall, these changes in the overall business model lead to what Raynor describes as a new productivity frontier - relationships of price and value that cannot be obtained using the traditional business models of higher education. Since the focus of the new model is on education, the primary way that it can have sustaining innovation - thus enlarging its productivity frontier and increasing competitive strength- is by increasing the educational effectiveness of its NCLCs and associated social networks.
As is increasingly clear, in order for this NCLC resource to be used most effectively to radically change the traditional business model, another new resource needs to be present - a means of awarding recognizable credit for the courses. In the US, current regional accreditation rules essentially preclude accreditation for faculty-less institutions, so more indirect approaches must be used at this time by most of the organizations using this new resource in a disruptive way. The two most used approaches presently are prior-validation that the course is equivalent to a typical traditional college course (e.g. CREDIT), and post-validation through an exam that the student somehow has learned materials appropriate to a typical college course (e.g.CAEL,CLEP). Students must then shop around these creditials to find an accredited institution that will use them to award real college credit. Of course, a few institutions using this approach, such as WGU, are themselves accredited and can award credit and degrees directly.
It seems likely that this credit situation will change as competency based learning becomes more accepted, and accreditation is based more on outputs such as student learning than on inputs such as number of faculty. Indeed, the backup document for President Obama's State of the Union message states describes his interest in
establishing a new, alternative system of accreditation that would provide pathways for higher education models and colleges to receive federal student aid based on performance and results.
There are also many alternative forms of credentialing being developed that do not depend on accreditation, such as MozillaWiki Badges and certification of course completion from MOOCs such as Coursera. Given all of the new possible pathways to education, it is not certain that a college credit or even a college degree will continue to be the end-all in the future.
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The value proposition of traditional higher education is complex, built around such considerations as opportunity to: interact face to face with research-active faculty and with student peers; experience social growth through campus and residential life; gain an education that will be professionally and intellectually rewarding; and associate oneself with the brand value of the institution. Obviously, not all traditional institutions offer all of these opportunities to the same degree, thus defining a de facto hierarchy within higher education that, for shorthand, I will call the traditional brand value (TBV).
The new institutions created using the NCLCs generally will not have many of the attributes associated with the traditional value proposition: e.g, traditional student social growth components such as sports and residence halls, opportunities for face-to-face interactions with research-active faculty, or brand value built over centuries. The new model does have potentially compensating benefits such as: much lower cost, online courses accessible everywhere and anytime, self-paced courses, potential to shorten time-to-degree. In addition,as noted in part I of this series, the NCLCs also bring with them a new type of brand value. The lower the TBV of a traditional institution, the more likely it will be that a prospective student will decide that the compensating benefits of the new model make it the most desirable choice.
There are, in fact, many educational situations where this new model could be, de facto, a very strong competitor. For example, in many parts of the developing world, there are enormous shortfalls in traditional educational capacity at all brand levels. New institutions built around existing NCLCs provide one of the few opportunities to provide significant new capacity at affordable cost. Since the new institutions are competing primarily with massive nonconsumption, they will not need to improve rapidly in order to attract very large numbers of students. In essence, these innovators can succeed without having to move upstream, thus behaving similar to Raynor's strategic innovators rather than disruptors of the market leaders.
In a country with highly developed tertiary education, such as the US, the new models will have greater challenges. To be sure, there will be a set of students who do find the special attributes of this new model to be highly desirable, as early entrants such as the University of Phoenix have demonstrated convincingly. Of course, the newer entrants such as those mentioned above are bringing price competition into the fray with their low-price strategies. This lower price obviously will increase the total set of potential students who will find it desirable to choose the newer model institutions with their compensating benefits over the traditional institutions. However, because of the many alternatives available, the total number of students who will choose the new model is limited unless the model can move its productivity frontier outward rapidly through improvement in the nonprice values of pedagogical effectiveness and growth of brand.
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Admittedly, we are just beginning to learn about how best to use online techniques. However, many of the components that contribute to the nonprice value of the productivity frontier of online education already are known. The most critical component, as discussed in Part I of this series, is, of course, the pedagogical strength of the online programs themselves. Additional information came from a recent Department of Education meta analysis of research that had compared outcomes in online courses vs those of face-to-face courses reached some very important conclusions. Across a very wide spectrum of different types and levels of courses, the online courses had outcomes that were as good as, or better than their face-to-face counterparts. However, the best learning outcomes came from approaches which involve some relatively small face-to-face classroom experience to support the primary online component.This superiority of this blended approach obviously might change in the future as experiments using social media progress. However, this suggests that the high value, high cost end of the productivity frontier likely will be formed by products that use some form of blended approach or social media approaches that mimic the benefits of the blended approach. We also know that there are a variety of cost-adding online support mechanisms that lead to improved outcomes in online learning, such as tutors, advisers, and coaches. Different mixtures of these will help to define points on the productivity frontier as well. Specialization to meet needs of specific customer groups almost always adds value (and cost), and that will probably be true in online education as well. While the MOOCs are aiming at as broad and large an audience as possible, the partnership of Pearson and Knewton seeks to provide a learning experience tailored to the individual student's strengths, weaknesses and learning style through the use of adaptive learning, and Altius's Helix uses adaptive learning to provide courses that are built around the individual student's interests.
I can imagine several things that might lead to significant increases in the brand value of institutions that are being created using these NCLCs, thus moving the productivity frontier outward. Perhaps the most powerful is the increasing acceptance of competency based learning, which would enable and encourage comparisons of learning outcomes obtained with both the new and the traditional approaches. Because pedagogical advances are very seldom (if ever) adopted by traditional institutions of higher education, newer institutions working at the expanding productivity frontier should rapidly be able to demonstrate superior outcomes when compared to an ever widening variety of traditional institutions. As noted above, increased focus on outcomes could lead to changes in accreditation standards that could enable many of these new institutions to gain accreditation, another booster of brand.
Since many, if not most, students who will chose one of these newer institutions over a traditional institution are highly focused on career advancement, adaptive learning approaches might potentially offer a way to build brand among a key target audience - employers. For example, the scenarios and the resulting presentation of course materials in a Helix-like interest focused adaptive approach could be developed in conjunction with groups of potential employers looking for employees with that interest. A student who followed the same interest throughout her studies would then get both a degree and a certificate from an employers group testifying to the pertinence of the education to a particular field.
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I have discussed above several new types of online institutions that take advantage of the profusion of NCLCs. However, we see many new institutions of the type I describe being created around their own proprietary courses. Why do that when there are so many different existing and available NCLCs out there? Surely, creating new, home-made courses must add significantly to the cost of the product.
Creating its own courses obviously enables the new company to create courses that closely match the value proposition that the company wants to achieve, e.g. the desired level and focus of course material, desired level of pedagogy, desired social media, etc. Obviously, any start-up should be looking at how well it could achieve its desired value proposition using available NCLCs, and at the cost differentials between building and buying. Some, such as the Minerva Project, will conclude that existing NCLCs provide little overlap with the value proposition that they are seeking, thus making it obvious that the Resource box of their business plan must be built around their own courses.
Because of the added costs of producing and continuously improving proprietary programs, one can guess that most of the institutions using their own programs will be clustered around the high cost, high value portion of the productivity frontier, and that most of the institutions using models built around the NCLCs will be found around the low and middle cost/value ranges of the productivity frontier. However, as discussed in part I, many of the NCLCs themselves will be continuously improving their capabilities. An example of this is the recent partnership of Pearson and Knewton that brings adaptive learning to their NCLCs. Thus, as time goes on,many value propositions that can be created today only with built programs will become possible with improved NCLCs. That is what expanding the productivity frontier is all about.
The third and final post in this series is How a course-rich world might impact higher education: III. existing traditional institutions
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