The price of (distance) education

1. Concluding
2. Good education does not come cheap.
3. Can education be provided in a competitive market?

1. Concluding

Good quality education, whether online or face-to-face will cost money. Which form of education, or rather which combination, is appropriate depends on the context. For 18 – 24 years old, the campus university seems optimal, although the more independent attitude of young people is reflected in a more critical approach to education. They seem to choose for a combination of work and (distance) education, adding to the more adult learners. Also, for big audiences or a large geographical spread of learners, online distance education could be more effective, but not necessary less expensive.

The transformation of costs of education into the fees of the learners is a political choice. By setting the size of the overall budget and the part spend on education, it determines the access and price of education. Of course, governments will ask organizations to organize education in an efficient and effective way. However, the usage of for-profit organizations to realize the educational goals would require that they provide the same or higher quality of education at 60% of the costs of not-for profit organizations, which seem quite a challenge.

The challenge for government agencies is to make sure that the for-profit organizations align their (profit) goal with the goals of the students and the governmental goals, preventing misuse and fraud as described by Carey.

2. Good education does not come cheap.

When someone writes:“The price of college is breaking America”, the problem seems sever. Yet, Kevin Carey also has the answer: It also doesn’t explain why colleges have failed to take advantage of the best opportunity to radically drop the price of a good …………The answer is online learning.[..]. This is how universities could break the tuition cost curve—by making the price of online degrees proportional to what colleges actually spend to operate the courses.”

In a reaction to this Paul Prinsloo wrote at twitter: “[..] working in a mega public distance/blended institution with more than 350,000 students calls forth grappling with the three vectors of the “iron triangle”  – access, quality, cost. I classify under ‘quality’ the issue of student:instructor ratio […] So balancing cost, quality & access (an unholy trinity) per se means compromise. You cannot touch one of three vectors without impacting the other two. Appointing ‘cheap’ adjuncts, increasing class sizes & redefining good quality to “good enough” is the name of the game”.

In my experience, working for 30 years in distance education, there are some rules of the thumb:

• The total costs of developing good distance learning courses (DLC) are about the same as classroom courses (F2F). However, costs in DLC mostly fall in the design and production phase, whereas F2F-courses require more efforts (and costs) in the exploitation phase.
  Two comments on this rule are (a) that many costs of F2F-courses are hidden for the administration; preparations for the September-courses often takes place in the summer or are disguised as research; (b) quality in DLC is not defined as the student:instructor ratio, but rather as the absence of instructors. Perfect (non-existing) course materials do not require any explanations. And yes, although much of the knowledge of the original designer is made explicit in the materials, it will be imperfect and adjuncts are used to help students.
• Different courses require a different approach. We try (tried) to embed basic knowledge in courses that can be studied independent of tutors, other students and place and time. Other courses, for example advanced courses or competences courses require academic reflection and discussion, so students are grouped together and mentored when needed. In the last case, there are didactical reasons for
• There seems to be a relationship between the number of students, their geographical location and the most costs-effective teaching style. Small groups in each other neighborhood will be best served with F2F-courses. For groups divided over large areas or large amount of students DLC may be cost effective. Two simple examples: we had a set of independent DLC-s which were taught to 300-400 students using 7 lectors. Because we added research competences into the course, it is now taught in groups of 20 students, requiring 15 tutors. When the amount of students rose towards 500 students, the amount of tutors increased to 25 (but in reality, we also increased the amount of students/group). The group of students who are writing a master thesis, meet in Utrecht, which involves train trips up to 200 km., on average students and teachers travel 50 km to attend these colleges.

Therefore, in different situations, DLC-s can be more cost-effective. However, good education does not come cheap. Just filming your classes and putting them on the internet can provide others with good educational resources, but does not creates good education. The same applies for an unrestricted increase of the number of face-to-face meetings, sometimes students have to read and work as individuals. Yet, in my opinion, there is no iron triangle; the relationship between quality (in a broad sense), access and costs is mainly a financial decision. As we experience in DLC, the decision to cut costs in the design phase has its consequences in the later phases of the course, including failing students or increasing tutoring costs. Only when the government agencies or the management of the educational organization set a fixed budget, the triangle becomes fixed. And as teachers cannot influence access or costs, it will be the quality which will be adjusting.

The idea that online learning will decrease prices of education as students only pay for the teaching (activities) and not for football, buildings and buffets, is an old one. Christensen et al. (2010) predicted the disruption of education because of distance and online learning. As we saw above, there is no necessity that good quality DLC will be cheaper than F2F education; only that it will be more cost-effective per student.

One exception is as an organization uses existing materials and competences to develop online education. For example commercial educators hire university professors to develop courses, which can be sold cheap. However, the professors are trained by and do research at institutions financed by public funds, so part of the costs are carried by the public sector. Following Carey, American universities are organizing this competition themselves with the help of socalled ‘online program managers’ (OPMs): for-profit firms taking the educational programs of these institutions and putting them online, in exchange of 50-60% of the tuition fees.

Carey then makes two important points with respect to the costs of education:

• By comparing the fee of an online course, set at a breakeven point by Georgia Institute of Technology ($ 6,000) with the fee of similar courses, which are offered for fees up to $65,000.
• Based on the financial rapports of 2U, an OPM, he gives a breakdown of costs, resulting in a 43% profits (divided 50:50 over 2U and the universities), 43% program costs (developing the program, subscription & administration and marketing & sales, 19%) and 14% instructional costs.

The ratio between program costs and instructional costs is a problem when quality is measured in student:instructor ratios. If the developed online materials are of good quality, our rule of the thumb says that investing in good materials can reduce the required amount of tutoring. There is not much to be said about it without any data on students’ progress, degrees awarded and student intentions.

3. Can education be provided in a competitive market?

More disturbing are the figures with respect to profits and fees as mentioned above. If profit is the only reason to offer an educational program, there seems to be an inclination to raise the fee for students up to 11 times the costs and spent more on marketing and sales than on instruction.

Whereas much of the comments on Carey focus on the costs aspect of online education (see Lederman, 2019). However, from my (European) point of view, I find the examples given of for-profit-firms who use the tax and educational policies to generate business without any regard to quality much more disturbing. Lederman (2019) interviews Terry Bates, who stated, “Certainly in the U.S.A., OPMs are sucking money out of the system, as are for-profits. However, neither of these conditions apply in Canada. Tuition fees are lower because provincial governments in Canada better support higher education institutions financially than do the state governments in the U.S.A”.

He point out two choices that influence an educational system. Firstly, the political choice to support education or not. On a budget level, educational outlays compete with other spending, whereas the overall budget depends on the amount of tax revenues. Therefore, the costs of education for students and learners are not only a design choice of teachers and educational institutions but also of national and state governments. Secondly, if for-profit organizations provide services or goods, part of the price (fee, charge) will be profit. If the quality of service a not-for profit organization is as good as the for-profit organization, society will be better off when the not-for profit organization is chosen. The reason to choose for a for-profit organization to organize online education should be in the fact that this organization can offer courses or a program at a total of costs and profit below the costs of the production by the not-for profit organization. In terms of the figures of 2U, the costs of the combined 2U/university offering should be 43% lower than the costs of the online program by the university. When we add to that, that a public financed university should not advertise as often as a for-profit organization, the total costs of the combination have to be 63% below the costs of the university.

And, perhaps Trace Urdan (Tyton Partners, cited in Lederman, 2019) is right that Carey “blames capitalism” [..] and “doesn’t like profit making in higher education” [..]. Nevertheless, as illustrated above, the positive effect of capitalism rests on the assumption that for-profit firms are about 60% cheaper than not-for profit organizations given the same level of quality.

Furthermore, a free market does only make sense if one the demand side consumers have consumers-freedom, meaning that they are free to choose. However, in (formal) education students only get to choose the once and are then locked in. Schoeni (2018, 457) shows for military expenditures that innovation through private-public partnerships are bad for innovation as: [..] “competition is once and done. It occurs early in the process, then vendor lock ensures that incumbents have a ready buyer for decades. P3s would only exacerbate that problem. By definition they lock in a single supplier for the long term”.

Urdan argues that: “But higher education pricing at the master’s level is not cost based. Among the elite schools that Carey holds up, it is value based. [some are higher priced], but because these are the prices that buyers believe these programs are worth”. Which shows that regular market-laws do not apply to education.

More disturbing are the examples Casey mentions where for-profit educational firms ignore all levels of quality and see students only as a mean to derive income from. Or as Casey describes: “There was the recruiter who described hunting for students outside welfare offices in poor, mostly black neighborhoods. A prospect was considered qualified if he could “breathe, scribble his name, had a driver’s license, and was over 18 years of age,” the recruiter explained”. Subsidy hunting is of all times and places, but it cannot be an argument for the use of for-profit organizations in education.

Literature

Carey, Kevin. (2019). The creeping capitalist takeover of higher education, Huffpost, April 1, 2019, https://www.huffpost.com/highline/article/capitalist-takeover-college/

Christensen, C. M., Johnson, C. W., & Horn, M. B. (2010). Disrupting class. McGraw-Hill.

Lederman, Doug. (2019). What Kevin Carey Got Right (and Wrong), Inside Higher Ed, April 10, 2019. http://www.insidehighered.com/digital-learning/article/2019/04/10/expert-roundup-what-kevin-carey-got-right-and-wrong-about-opms

Reed, Matt. (2019).The Assumption that Online Teaching is Cheaper, Online education, costs and the OPM debate, April 11, Inside Higher Ed, http://www.insidehighered.com/blogs/confessions-community-college-dean/assumption-online-teaching-cheaper

Schoeni, L.C.D.E. (2018). Whither Innovation?: Why Open Systems Architecture May Deliver on the False Promise of Public-Private Partnerships. Administrative Law Review, 70(2), 409-458.

Platforms and Education: a good combination?

Education and platforms

An update:

The Networked University of Jeffrey J. Selingo

https://www.edsurge.com/news/2017-12-21-deeper-collaboration-is-the-answer-to-higher-ed-s-challenges?utm_content=buffer9aa96&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Now, a new type of alliance is emerging in higher education that is centered around the need to solve common problems rather than to simply bond around mission or geography. One early version of this new kind of partnership was used to build and deliver Massive Open Online Courses (MOOCs) through alliances like Coursera and edX. Now we’re seeing the development of similar alliances to rethink student success for low-income students (such as the University Innovation Alliance) or deliver technological improvements in teaching and learning (Unizen).

To survive and thrive in the changing environment for higher education, more institutions must move to form deep alliances and collaborative platforms around nearly every function on a campus—from academic affairs to career services. Imagine if a group of colleges cooperated more to provide their back-office functions of admissions (beyond just sharing a common application), so that they could focus more on recruiting students. Or what if they shared career services resources so that a group of small colleges could better compete against larger universities for the attention of companies looking to hire. On the academic side, institutions can more easily build programs in emerging disciplinary areas such as data analytics or artificial intelligence by doing it together rather than on their own.

In my former blog The Platform Economy I gave a short introduction of platforms in e-business. In my view the major points were:

1. A platform is a broker (either acting as an intermediary in goods and serves or in financial aspects)
2. To attract enough participants both on the consumer and supplier sides, the platform has to provide a special value offer to both.

Problem is to define what the differences are between a platform, a network or an embedded organization.Wilfred Rubens wrote a nice blog (in Dutch) on why platforms shouldn’t be applied in education.

Some views on distance learning, based on my experiences working at the Dutch Open University:

a. Good distance learning courses are more expensive to make, but less labor intensive to exploit.
b. Good blended learning is expensive to make and expensive to exploit.
c. There is a difference between information, knowledge and education.d. Even with modular educational programs, there is a build-up of knowledge.

I think there are some misunderstandings with respect to the usage of platforms in education. Rubens starts with quoting Scott DeRue, who –inspired by the large student debt in the USA- proposes a system in which rich universities develop free courses, which can be used as basic materials in less well-to-do educational institutions, making education more affordable. Of course as side-effect will be that students from a rich background will get the teachings from the man or woman itself, whereas others may watch the video. The diversion between rich and poor becomes even more explicit when he argues that the costs of an on-campus experience should depend on its (life changing) quality and destroy the programmatic structure of education by splitting it up in micro-credentials.

Higher education is not for every citizen, and it must be earned. [..] we need policy makers and business leaders to come together at the same table to help universities, families and students pay for this education in much smarter ways than we are doing today.
Scott Derue

Yet, In this sense, platforms and the “Netflix”-university will increase inequality and segregation in society, without removing the basic problem: the fact that an education has become an individual investment resulting in large debts.

Furthermore, Netflix is an intermediary between the owners of films, series on one side and viewers (end consumers) on the other side. When free courses are used as a replacement of free text books, this educational platform is a kind of B2B network, whereas the final education is delivered by the minor universities.

Amy  Ahearn points out that platforms as Spotify aren’t as successful for the artists as they might be for the investors.  She points out that also on existing educational platforms, teachers are paid badly. An additional problem, in her perception, is that teaching is by and large a female occupation, so the low earnings will enhance the income gap between male and female.

[..], platform business models undeniably have huge upsides for instructors. They let people all over the world step into the role of “teacher” for the first time, bringing their niche skills and experiences to an audience of learners. They allow educators to focus on course design instead of having to create and maintain their own digital infrastructure. A platform can also aggregate demand, allowing students who arrive looking for one type of course to organically stumble upon a related offering. These platforms also invest in advertising that drives new customers to courses [..] To contextualize this trend, it’s important to note that teaching has historically been a female-dominated industry, with correspondingly low salaries and low status.
Amy  Ahearn

In 2011, I have written about the motives of participating in Open Education, for example marketing motives for HEI’s. Generating an individual income from offering OER or MOOCs is not one of them. Most of the contributors to Open Courses do this either as a side job, or social engagement, or expected reputational gains.

Elearningsherpa.com does state: You’re busy.  You don’t always have all the time in the world to work on you, but you still need gain new skills and get better in order to be successful in your career.  Online learning is the best way to pick up new skills and perfect those you already have, and fast.

Originally, the supply of open (distance) education was divided into two kind of platforms, the commercial, for-profit platforms (with commercial investors as Coursera) which provide free courses to learners, but try to earn a profit through additional services (assessments, certificates), by transforming the free courses into in company training, or selling the data on the students. The other platforms offer free education because of different motives, for example learning analytics and research, experimenting with distance learning, marketing, inclusion (policy) or a mix of these motives (EdX, FutureLearn, OpenupEd).

New online learning platforms (which have to be distinguished from what publishers call ‘learning platforms’) sometimes offer some free courses, temporally free trail periods, and exploit the freemium model. The earning models depend on getting the attention through the free courses, converting this interest into demand for paid courses. Examples are PluralSight, Lynda.com (Linkedin education), Threehouse and Udemy. Some seem to have their own teaching staff (Threehouse), others contributors (Lynda, Udemy, PuralSight), mostly paid per view.

Interestedly, there is a parallel with business models, where we can distinguish for profit organizations, social entrepreneurs, who do not aim to make a profit, but have to survive independently of new sponsors and not-for-profit foundations, which live to spend subsidies of third parties.

Also new are firms like LumenLearning (USA) and Homuork (Spain) which act as an intermediary between available free educational resources and educational institutions or learning organizations. Are these firms platforms, or not? Their earning model is based on the fact that their customers (firms or schools) do not know where the right free materials are available, nor have they the competences necessary. Instinctively, these firms are excluded from the platforms because they do more than just provide a marketspace were suppliers and consumers of education meet.

Online, Distance and E-Learning

So there is a lot of dynamic in the e-learning sector. And with that, boundaries become unclear. The diffusion between terms does complicate discussions. Some authors talk about e-learning, others about distance learning, open learning or MOOCs. I think it is important for the discussion to make explicit what kind of learning is meant.

In my view, Online and E-learning consists of all kinds of education which involve computerized education. This includes flipping the class room by offering the standard tutorials and assignments in a closed learning management system, freeing face to face time for discussion and complex topics. When online learning is part of a traditional curriculum, it will not fundamentally change education.

Open education, including freemium systems, are also delivered through the Internet (with the exception of Open Classes and Studium Generale, where people are invited to attend open f2f lectures). When it takes the form of MOOCs, the courses can be studied independent of tutors and other students. In the case of OER, some teacher has to design a course out of the resources as they often cannot be used by learners. Problem is are the awarding of degrees, the exams and other activities which require staff-student interaction.

Distance education, whether open or closed, uses a different didactical approach than traditional f2f teachings. However, it isn’t necessarily less expensive than traditional programs. Good distance education requires a larger investment in the materials than face to face programs. Both the online components as the f2f components of E-learning have to be integrated in the materials. Yet, as the additional costs of teaching are almost zero, it will be less costly in exploitation.

In the words of Christensen, distance education has the potential to disrupt the educational sector, as it can provide formal education at lower costs for students. Open Education misses the formal component, so it becomes an excellent instrument to further knowledge in specific fields, where formal acceptancy is less important. Furthermore, when learners move from the free space into the paying space of the ‘platforms’, education becomes either distance education (given the serious suppliers), or it just become MOOCs in their worst form.

Online education is just a new supplement, which can change class room education fundamentally, but does not change the system or the costs of education.

Again platforms and education

So will platforms stimulate, disturb or even damage education? Firstly, we have to define what is meant by a platform. Netflix-like platforms as FutureLearn, OpenupEd and other MOOCs-platforms will offer opportunities for learners (but no official recognition) and can function as free textbook providers reducing educational costs. In the last case, they can be disruptive for the text book publishers, but only stimulating for the educational sector.

Unaccredited (for-profit) short courses and programs, aimed at professionals, try to reduce their costs by paying low fees (income-per-view). This will reduce the income of independent tutors and authors, but as they do not replace formal educational programs within HEI’s, they will not directly influence teacher’s wages. Question is if these kind of providers can be described as platforms, or just for-profit educational organizations. They will only become real disruptors when the authorities accredited the programs and they are capable to set up a system of assessments without increasing their costs (and prices).

Another challenge is the transformation of the MOOCs-platforms from subsidy spending foundations into social entrepreneurs, so they will survive even when sponsors and subsidizers shift their attention elsewhere.

There is no doubt that MOOCs and for-profit HEI’s can impoverish higher education and deteriorate the position of teaching staff. However, it is naïve to blame educational platforms, especially because several of them provide Open Education because of social motives. The struggle between private and social entrepreneurship in education is caused by a suspicion that public organizations are inefficient and ineffective compared with private organizations, especially in the United States, but also in several European Countries. Yet, as I started out, a good quality of online or distance education demands large investments which probably will not be earned back at a profit as several investors in commercial MOOCS-platforms are experiencing.

 

 

 

 

Business models in international education: what is possible? How local is education in your view?

 

In No education crisis wasted: On Bridge’s “business model in Africa (July 13, 2017), Hengeveld criticizes the way Bridge International Academies (Bridge) organizes their educational model in countries like Kenya (2009), Uganda (2014), Nigeria (2015), Liberia (2016) and India (2017). At their own website, they describe their Academy-in-a-Box: We re-engineered every part of the education system, from teacher training and support, to lesson delivery, construction and financial administration, as well as pupil and teacher feedback to monitor progress, to make it as efficient, effective – and very affordable for the communities we serve….The global education crisis means that it’s essential our education model is sustainable and scalable, that’s why we aren’t an NGO. The model includes 24/7 support of the teachers; following the national curriculum of the countries, incorporating the local context and standards, collaborate with local education ministries; personalized instructions using Wi-Fi handhelds, recording student data, freeing teachers to concentrate on teaching instead of administrative functions; streamlining managerial tasks, freeing managers to concentrate on teachers, families and communities.

According to a report of the Global Initiative for Economic, Social and Cultural Rights (GIESCR),  Bridge uses “school in a box” model, employing a highly-standardized approach to education. At BIA, every school looks the same, the material used is the same in each classroom, and most importantly, the lessons are the same across all the academies of the same country. BIA uses a system of scripted lessons, and its teachers – who are mostly secondary school leavers without formal teaching qualifications – receive lesson plans on an e-tablet, which they have to follow word by word”. This report criticizes Bridge for several reasons. Firstly, they show that the tuition fees are such that poorer students cannot participate. Secondly, they dispute the compliance with local legal and educational standards. The report points towards research in Kenya(*), that “the majority of BIA students are taught by unqualifed, overworked, teachers using teaching scripts (developed in the US) read from tablets. The school infrastructure is basic and viewed by many as inadequate. [..]. Regular payments are strictly enforced and students who are behind with payments are excluded from the classroom”. Both GIESCR and Hengeveld argue that public investors, as the Dutch government and the World Bank should reconsider their contributions.

Whether Bridge International Academies does violate national legal educational and labor regulations is something which I cannot determinate.  The arguments in the contra-Bridge rapports are convincing, but Bridge of course deny the observations mentioned above.

A different question is whether the business model of Bridge is viable altogether. Taking the strategic paradox De Wit and Meyer (2014**) on internationalization of organizations, they distinguish two perspectives, the global convergence perspective and the international diversity perspective. The first builds on international centralization of management, economies of scale in purchasing policies and sales, increasing efficiency. The second perspective accepts that there are fundamental differences between local markets, customers and governments.

Education is a sector which is certainly characterized by international administrative and legal diversity. So each organization which wants to operate on a global scale should take account of the local rules and regulations with respect to curricula, but also to privacy legislation and labor market regulations. react severely when –in their experiences- an organization disrespects or even violates these national laws. Especially when the organization offers formal degrees, local accreditation is essential for recognition.

Another question is how general is ‘education’. Is it possible to develop educational materials for the teachers or even for the students which can be used globally? To profit from the economies of scale, there has to be some synergy between either resources (reallocation, specialization), activities (pooling, specialization or competitive local advantages) and in the product offering (standardization, cross-border competition). For example, by designing an international oriented MOOC, the assumption is that the didactical methods are internationally usable. Whether it is an American textbook on sociology, a MOOC on global pollution or a distance course on chemistry, the designers/authors use a didactical method, specific examples and language. What makes some materials broader usable than others; what makes authors think that their materials are internationally usable? For example, starting European students of economics in the 80’s knew more about the American Federal Reserve than of the monetary systems of other European countries.

Bridge, but also MOOCs and OER implicitly assume that educational materials are broader adaptable than the development environment. Bridge even states that the material they make available through their tablets can be supplemented by the advice of central organized experts. Of course, the materials made available by Bridge are their own resources. MOOCs are available under creative common copyrights, but are often not adjustable, taking the form of a static text book for use in other environments. Only OER available under the most flexible creatives commons are adjustable and reusable by third parties (teachers). Yet, adjusting these resources, translating them in other languages, subtitling and adding local examples will be a lot of work. If the critique on Bridge’s central approach is right and local education is more effective with local teaching, this also removes the arguments of the possibility to provide less costly education, available for all social classes and incomes. If Bridge’s education isn’t more effective, more accessible and of a higher quality than the local teachings, the business model of this kind of education disappears.

But if the central globalization approach doesn’t work for Bridge, will MOOCs and OER be usable outside of the developers’ environment. Three of the shortcomings of MOOCs as listed on the website Online Course Report (OCR, 2016) are the teaching methods, the way content is presented and their Anglo-Saxon orientation. And these are listed as general limitations, not specifically because of local methodology.

I would like the opinion of teachers among my readers, How local is education in your view?

* Bridge versus Reality: A study of Bridge International Academies’ for profit schooling in Kenya; Report, Education International/Kenya National Union of Teachers, December 2016

** De Wit, B., & Meyer, R. (2014). Strategy synthesis: Resolving strategy paradoxes to create competitive advantage. Cengage Learning EMEA.

 

 

Openness, lessons from innovation for education

 

From: http://www.eoi.es/blogs/alfonsomedal/

In two seminal papers, Dahlander and Gann (2010) and Huizingh (2011) try to define openness as used in open innovation.  Here, I try to use these definitions of openness in describing openness in education, drawing some lessons for both sectors.

Definitions on openness in innovation

Although Huizingh (2011) bases its definitions on Dahlander and Gann (2010), it is easier to start with his distinction between the innovation process and the innovation outcome. Openness in terms of the process is determined by the amount of knowledge which is obtained externally, or developed internally. The openness of the outcome is determined by the fact if the resulting process or product is proprietary or made freely available for external partners.

Innovation process:	Innovation outcome:
	Closed	Open
Closed	Closed Innovation: proprietary innovation developed inhouse.	Public Innovation: the outcome is available for others, whereas the innovation was developed inhouse.
Open	Private Open Innovation: a proprietary innovation, developed with the input of external partners.	Open Source Innovation: both the development as the result of the innovation are open.

Source: Huizingh (2011, p. 3)

Closed innovation is the traditional way innovations were developed. The aim of public innovation often is the development of a standard. For example, by making the PC the standard in computing during the 80’s, IBM could control part of the market for personal computers.

Another way to divide open innovation is to make a distinction between inbound and outbound innovation. In the definition of Huizingh (2011, p. 4): Inbound open innovation refers to internal use of external knowledge, while outbound open innovation refers to external exploitation of internal knowledge. Dahlander and Gann (2010) combined these types with the question whether there is money involved or not.

	Inbound Innovation	Outbound Innovation
Pecuniary	Acquiring	Selling
Non-pecuniary	Sourcing	Revealing

Source: Dahlander and Gann (2010, p. 702)

Revealing seems to be used to attract collaboration, especially in situations without strong IPR regimes. It also resembles Public Innovation of Huizing (2011), in aiming to set a market standard. Sourcing refers to the absorption of external available knowledge to create new products and services. The literature suggests an inverted U-shaped curve: searching for external knowledge will be profitable up to a certain level, after which the “over-search” will become more costly than profitable.

There seems to be a paradox in openness: as Huizingh (2011) states, companies perform more inbound than outbound activities (which recently confirmed by studies of the open innovation network, http://oi-net.eu/), yet inbound activities of one organization should generate reciprocal outbound effects from other organizations?

Openness in education

As we noted elsewhere (De Langen, 2013), there are a lot of definitions of openness in education. Openness in the sense of free to obtain (MOOCs), free to use (OER) or the absence of entry barriers (Open Universities).

Via: http://www.elearnspace.org/Articles/OE_presentation.htm

If we define the process as a measure of openness of the process, leading to the product, we can distinguish between free to access, free to use or even collaboration in design and production. The outcome is the education, the course or the program. Traditional education is mostly distributed in a closed form: it is exclusively for students of the institution. Traditional education is often designed and developed by a single teacher, by an internal group of teachers (both examples of closed process) and in some cases with developers outside of the own institution (often subsidy-led) or the usage of open resources and MOOCs. The Open Outcome-side describes the production of open educational products and services. The closed production of open outcomes are typically of the production of MOOCs. A situation of open production and open outcomes is found in situations where communities both develop and use educational resources. For example in the case of knowledge bases and portals, developed and exploited by communities of fellow teachers; two examples are MERLOT and FEmTechNet.

Educational process:	Educational outcome:
	Closed	Open
Closed	Closed Education: traditional education with an one-to-one relationship between students and teachers.	Free to use: the outcome (courses, programs) are open to use, but the teaching/developing process is closed. We can distinguish different regimes: a.       Traditional education without fees, as in large parts of Europe is practice; Open Universities b.      MOOCs, where the product is free, but the process of developing the course is proprietary. c.       Certain forms of Open Access, in the sense that the production process belongs to the researchers (holding the copyrights, sometimes having to pay a fee), whereas the published research results are free for the public.
Open	Use of free: the use of free (open) resources to develop educational resources for traditional institutions; for example Lumen Learning offers to teach educators to use OER to develop courses and programs for usage within traditional institutions.	Open Education: Open educational resources, DOCCs, communities of practice and alike.

If we look into the role of money in (open) education, than is the pecuniary side of the inbound knowledge acquisition the fact that most teachers use standard textbooks, produced and sold in a for-profit-business model by publishers. Of course, in traditional education teaching is one of the courses of income, however there are more opportunities. For example,

	Inbound education	Outbound education
Pecuniary	Acquiring textbooks and materials.	Selling knowledge, texts and competences.
Non-pecuniary	Sourcing: collaborating to acquire knowledge and resources.	Revealing: collaborating to supply knowledge, competences and resources.

Another model

Another way to categorize education is based on Yunus et al. (2010). In their view, organizations optimize either financial profit or social value. On the other dimension, they distinguish the way organizations are financed: either they have to earn back the invested capital, or they don’t. In this last case, another organization will supply the funds necessary for the long term survival of the organization. Traditional HEI’s were placed either in the Not-for-profit category for public education; or in the For-profit-category for private educational firms. Interesting are those organizations (websites, portals, knowledge bases ect.) which resulted in the past years, as result of inter-organizational collaborations, subsidies or individual initiatives.

	Financial	Profit Maximization
No recovery of	Not sustainable in the long term	For profit organizations	Repayment of
Invested capital (depending on external funds)	(Traditional) Not-for-profit organizations	Social businesses	Invested capital (self-sustainable)
	Social	Profit Maximization

Next to the educational knowledge and competences, their survival will depend on the capability to generate funds to reimburse the capital used in the production and exploitation of open education.

Literature

Via http://oi-net.eu/

Dahlander, L., & Gann, D. M. (2010). How open is innovation?. Research policy, 39(6), 699-709.

De Langen, F. H. T. (2013). Strategies for sustainable business models for open educational resources. The International Review of Research in Open and Distributed Learning, 14(2), 53-66.

Huizingh, E. K. (2011). Open innovation: State of the art and future perspectives. Technovation, 31(1), 2-9.

Open Innovation in European industries (2015), study for the European Commission, http://oi-net.eu/.

Yunus, M., Moingeon, B., & Lehman-Ortega, L. (2010). Building social business models: lessons from the Grameen experience. Long Range Planning, 43, 308-325.