The Impact of MOOCs on Smaller Universities: A Blessing or a MOOClear Disaster?

Inside the MOOC

by Alex Katsomitros, The Observatory: http://www.obhe.ac.uk/newsletters/borderless_report_june_2013/impact_moocs_on_smaller_universities

Several pundits and think tanks, including the credit rating agency Moody's and Pearson, argue that MOOCs pose a threat to smaller higher education institutions, as the online revolution favours elite institutions over the rest. 

Udacity founder Sebastian Thrun claims - perhaps hopefully in his case? - that by 2060 there will be 10 universities left in the world. 

A more plausible approach is to suggest that MOOCs create opportunities for smaller institutions because of their potential to increase international visibility and create new streams of revenue.

A crisis

Top-ranking institutions appear to be in an advantageous position when it comes to online provision. The vast majority of students cannot access these institutions because of a selection process that admits only the brightest and the richest. 

MOOCs may gradually diminish the fee obstacle, thus depriving smaller universities of a big chunk of students. 

This makes more sense if you consider the power of the brand, which is important on the internet, particularly for students from the developing world, and you have a market that may come closer to an oligopoly.

These pressures will be all too evident if the status of a middle-ranking degree is questioned by the spread of e-learning, and if forms of certification are recognised by employers as legitimate alternatives to degrees. 

Some students may bypass traditional higher education, particularly in disciplines where the borderline between theory and practice is blurry and learning by doing is the norm: computer science, data analytics, marketing, accountancy, design and the arts. 

If young Indians or Brazilians are able to get a skilled job with an edX or Coursera certificate, those parts of the HE sectors in the US and the UK that base their business model on international student recruitment will be in trouble. 

Smaller universities that do not specialise in specific subject areas may suffer the most.

MOOCs were motivated at least in part by a mission to widen and increase access to higher education. 

But if the rise of alternative credentials lags behind an increase in provision, they may also give rise to two tiers of graduates: those with a degree from a brick-and-mortar university and those with an online or blended qualification. Such may be the price of the massification of higher education to new levels. 

Even so, an education system free of an obsession with degrees is not such a novelty. Eric Hobsbawm noted in The Age of Revolution that one remarkable thing about technical education during the Industrial Revolution was that there was so little of it. On-the-ground training for engineers was the order of the day.

And an opportunity

Is there hope for universities beyond the great research-led ones? The answer is yes, if they design their own MOOCs, focus on what they are good at and develop an entrepreneurial bent. A key factor for a successful MOOC platform is to focus on employability and connect students with employers.  

Udacity and Coursera both do this and charge fees to hiring companies. Enabling employers to contact graduates early and directly, rather than waiting for them to apply for jobs, is something for universities to consider.

This will be a global game. According to a study by the Accenture Institute of High Performance, there is no global shortage of STEM skills but location mismatches between employers and graduates. 

Engineers might be in short supply in the UK but in abundance in China. This is a gap that creates business opportunities for intermediaries who can connect employers with workers. Universities can be the intermediaries and build social recruiting platforms as a part of their MOOCs.

The medium is the message: Small can be big online

 Mid-tier universities should also try to harness the internet’s viral tendency. What would be the equivalent of the Harlem Shake meme in a higher education context? University leaders could use MOOCs to make particular strengths visible globally. 

Humanities departments could launch writing competitions in more than one language or turn MOOC meetups into literature festivals. 

Media departments could encourage their online students to create news websites, using the language skills of their international talent pool to cover current affairs all over the world. Every subject area can have its own innovative application online. 

Such a strategy would serve three purposes: equipping students with practical experience for employability, creating new streams of revenue through student start-ups, and building global reputations in niche areas. 

Towards the ‘university-entrepreneur’

In contrast with earlier online education platforms, Coursera and edX are interactive platforms, and thereby have the potential to create global communities of learning. 

They can fully exploit Web 2.0 revenue sources such as crowdsourcing and crowdfunding. These platforms include a social element, with tools such as peer grading to reduce costs.

As we know from the other industries that have faced similar challenges, the real added value on Web 2.0 is not necessarily the content but the social activity that emanates from content: the interaction and sharing between by users, who are just as much the product as the customer.

This is where big data might enter the equation. Data constitute an undeveloped source of revenue for higher education institutions. Student data generated on MOOCs can be used for various purposes, from HR and market research to advertising. 

Crowdsourcing can enable institutions to provide market research services to publishers, retailers or anyone willing to pay for them, through platforms such as Mechanical Turk.

Some may balk but they could also sell advertising space on online lectures, as YouTube does, or partner with publishers and charge for content. 

An example is Coursera's new partnership with Chegg, a website for textbook rental and purchase. Students taking Coursera courses will be able to access content for free through Chegg's e-reader during their course.

Crowdfunding could be a new revenue stream. MOOC platforms are virtual academic hubs where millions of people with similar interests meet; these can be engaged as small donors and study participants. 

Private companies may also make use of these platforms if they see that crowdfunded research can be viable as an R&D strategy. Mikroryza is a crowfunding platform for science research grants that enables researchers to post proposals online and solicit donations. 

And University World News reported in May that researchers at Deakin University are using Pozible, another crowdfunding website, to raise money from the Australian public. 

MOOCs can be platforms for student entrepreneurship. Students develop apps and can create startups. University leaders and administrators will have to develop new skills for this: they will have to learn how to run a ‘university-entrepreneur’ that can operate as an angel investor and be active in sectors other from education.

In order to make all that possible, MOOCs from smaller universities will have to reach as many people as possible around the world. This is not an impossible task: the big MOOCs platforms outsize every single brick-and-mortar university. 

But these are all separate considerations from those currently occupying most minds, most notably the integration of MOOCs into credit-bearing degree courses and, hence, revenue.

Avalanches and storms are coming, so we are told. Universities are all going to the wall. Outrageous predictions and measured suppositions are given equal consideration. 

But online education is here to stay. The bulk of middle-ranking institutions cannot avoid disruption but can do a lot to make it work for them.