Moocs, education from service to product and back.

At this moment, all kinds of enterprises experiment with the change of “Product Dominant Logic” towards Service Dominant Logic”.  Value creation is seen in the usage of a product, which implies that the interaction between supplier and consumer becomes more important. We don’t sell simple products anymore, but the product is part of a consumer-experience and the firm accommodates this experience. Products become services and customers co-creators, interaction becoming a major competitive force.

In education, however, we see an opposite movement. Distance learning, whether open or not, involves the translation of the didactical interaction, the presentation of the content and the experiences of the teacher into an electronic product, which could be uses independent of the individuals who made the online course. Again, because of the required quality and completeness of the course materials, a good online distance course will be much more expensive to develop than a face-to-face course. The quality and completeness are requirements which follow from the fact that the student should be allowed to study most of this material independently from tutors or peers.

By packaging the teacher into an electronic self-sufficient educational product, education moves from a service orientated sector towards a product orientated sector. In a sense it is showing a shift seen before in the performing arts. Baumol showed that labor productivity did not rise for a long time in performing arts; a performance of King Lear did require a standard amount of actors and the amount of spectators was constrained by the physical possibilities (space and time); leaving the ration spectators/actors roughly constant. However, through movies, television and –later- internet made it possible that the same performance was seen by millions of people, over and over again. So this altered the ratio spectators/actors largely, reducing the costs per spectator to almost nil.

The same applies for ODL: whereas production costs are above the development of face-to-face education, once the product is available, the delivery costs depend largely on the amount of students interested in the course. So if the course becomes Massive in usage, the delivery costs will go towards zero, justifying a free and open supply of online courses. In this sense, ODL is the answer to stagnating marginal labor costs in education and the logical  way to increase total factor productivity through capital intensive innovations.

The declining marginal costs do not solve the problem of covering the initial cost of development. At this moment there are three models developed to cover these costs:

  • Institutions bear the costs themselves for different reasons: for example marketing motives, the universities as MIT and the OU-UK who were frontrunners in OER reported on the rise in new students; others invest in potential future earnings by selling the program to third parties.
  • Institutions and the participating individuals use materials which are developed in a different context(regular programs) for which is paid by students and the government thereby reducing   the investment in ODL or Mooc.
  • Several governments and private foundations funded initiatives in the OER-movement; for example the Hewitt foundation, the Gates foundation and at present the Obama administration.

Of course, institutions do combine the three sources of funding to reach an optimal solution. The shift from education as interaction towards education as a product does not only provide the possibilities for a commercialization of education, this shift is expected to generate new sources of income, as described by different authors [ 1, 2].

In line with the Bottom of the pyramid –approach of Prahalad and the Blue-Red Ocean approach Kim and Mauborgne Moocs are the ultimate version of this development: strip your product of every unnecessary feature, leaving the bare supply which meets the demands of the customer. The decline in costs (and price) will make the product widely available, reaching customer segments comparable products will not.

This commoditization of products results in a downward spiral, were competition brings down prices and quality in a shark infested ocean, coloring the water red as only “the strongest survive”. Yet, several thinkers have suggested a way out of this situation. By moving from the commodity towards an experience, seeing a service instead of a product, firms can add unique features to their product offerings.

It is interesting to notice that what took the private sectors decennia to develop, is adapted by the educational sector within two years. Fred Mulder, the Unesco-chair on open educational resources,  proposed a system in which the content was separated from other educational features as tutoring, assessment and  certificates; describing a kind of Mooc before it really existed, but also foreseeing that independent sustainability requires additional sources of income. Thomas Friedman implicitly describes the flipped class room:

Therefore, we have to get beyond the current system of information and delivery — the professorial “sage on the stage” and students taking notes, followed by a superficial assessment, to one in which students are asked and empowered to master more basic material online at their own pace, and the classroom becomes a place where the application of that knowledge can be honed through lab experiments and discussions with the professor. There seemed to be a strong consensus that this “blended model” combining online lectures with a teacher-led classroom experience was the ideal.

In these approaches Moocs become a kind of electronic text book, used by others in their education. It will become a matter of time for the suppliers of the Moocs to ask a contribution of either the students or the institutions which make use of their materials. Yet, if this is the only contribution of Moocs to education, this is hardly to be called disruptive.

In several publications, we can see that Coursera, edX and Udacity are thinking about alternative earning models. These models all involve some kind of service to accompany the electronic lessons within the Mooc.  So in this sense, Moocs are no disruptive innovation, nor a treat to traditional education. However, Moocs can be a change agent in the sense that they facilitate educational innovations as flipping the classroom, integrating learning and working or stimulating quality (why sit through a boring class when you can take the content from a first degree university or teacher).

Also do Moocs open up education for people who otherwise would not be in a position to attend classes. This will, however, depend on two factors:

  1. The attitude of employers to free online courses; will they have a civil effect or will employers still hold onto official degrees?
  2. Openness in Moocs should be redefined not only in terms of barriers of entry, but also in the availability of the course over the year.

Within two years, Moocs become full circle. From a publicly founded service related activity (education) towards to a free product orientated electronic course, a commodity; towards a privately funded experience by adding exclusive services to the free commodity.

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Education as a service: Moocs, ODL and production of knowledge.

Education As Service by Jiddu KrishnamurtiAs I have argued elsewhere, education resembles a service more than a product. The characteristics of a service are that production and consumption are simultaneously. Yet, education is special, in the sense that sharing is non rival; it has this characteristic in common with information and knowledge. When you teach something to someone, the knowledge is doubled in the sense that you both have the knowledge, whereas in the case of a rival service or product the seller transfers the use of the sold good over to the buyer. And sometimes the process of education increases the knowledge of the teacher throughout the process.

 The linkage between educational production and educational consumption is broken by the usage of distance learning. Instead of standing before a class delivering a lecture, the teacher designs a course, taking into account the perceived problems of students. In Open Education, Moocs or otherwise, students will be more diverse than in traditional education. To quote Andrew Ng

Throughout the entire MOOC creation process, educators must constantly be student-focused, figuring out what is the most useful content for their students to experience next. With no admissions office, on-line students are vastly more diverse than the students in a typical college classroom. They vary in educational background, learning ability, and culture. Students are also at different points in their life, and range from teenagers to working professionals to retirees, and may have different learning goals. Educators have to make classes accessible without underestimating student ability.

This could be interpreted as the hypothesis that good distance education requires better teachers than face-to-face education because of both the distance (making their didactical skills explicitly available) and the heterogeneity of students.

 A misunderstanding with regard to ODL is that on-line education is less expensive than face to face education. Experience shows that the costs of developing high quality distance materials is more expensive than developing a classroom lecture. However, the deliverance costs of distance education are less than those of the classroom lecture. Having made some calculations for a program we would develop in collaboration with traditional f2f-educational partners, we estimated that the break even point between the two methods was around the 60-100 students; below this amount of students, the higher development costs of ODL were not compensated by lower deliverance costs in comparison with the costs of the face to face situation. Of course each course can have a different break even point, but as a rule-of-the-thumb 100 students is a save number.

Part of these higher development costs is caused by breaking the direct linkage between teacher and student. In our experience at the Dutch Open University, the classroom teacher can partly be replace by high quality materials, partly by offering distance tutoring (email, webinars) and partly by organizing meetings between experts and students. In this sense I do not agree with the caricature Bob Samuels sketches in Inside Higher Ed, describing ODL:

The web also creates the illusion that all information is available and accessible to anyone at any time. This common view represses the real disparities of access in our world and also undermines the need for educational experts. After all, if you can get all knowledge from Wikipedia or a Google search, why do you need teachers or even colleges? In response to this attitude, we should recenter higher education away from the learning of isolated facts and theories and concentrate on teaching students how to do things with information. In other words, students need to be taught by expert educators about how to access, analyse, criticize, synthesize, and communicate knowledge from multiple perspectives and disciplines.

A Wikiversity Logo for Open Educational Resour...

(Photo credit: Wikipedia)

As we all know, there is a difference between data, information, knowledge and competences. The facts and figures resulting from web-research have to be put into a context to be understood. However, there is a world of difference between the facts and figures of the CIA Worldfactbook and ODL. And even within ODL we can make a distinction between simple components offered as Open Educational Resources (OER), full OER-courses as by Saylor.org, taped lectures and assignments (Moocs) and the distance courses as developed and offered by the Open Universities and similar institutions.

Each of these resources or courses, free or paid for, is designed within a certain didactical context, whether you agree with the chosen method or not. The free availability of information and data on the Internet should not be perceived as a treat to teaching, but as an advantage, at most a challenge when there are conflicting opinions on subjects.

I think that more free available information demands more (educational) experts to provide contexts and meaning to this avalanche of data. However, it still remains to be decided in which context the traditional teacher of Samuels is better than the on-line teachings in ODL. This does not only (and perhaps not even mostly) depend on the costs of producing education, but on the nature of the competences to be learned, but also on the economical and social situation of the learner. As Amanda Ripley showed us, ODL-courses can play a major role in the development of poor learners in developing countries/regions, or the underprivileged in richer countries.

However, as we see in the Netherlands, it are not only underprivileged or remote learners who profit from ODL. There are individuals studying degree programs to further themselves; there are also individuals and groups studying a single object or course because of a gap in their former education.

And agreed, in some situations, the “canned” teacher or peer support will not be enough. Other kinds of tutoring should and can be offered without relying on f2f support alone.

So from an international and even a national perspective on economic and social growth, distance education can be a good investment. Yet, good distance learning will not come cheap, unless there are very large groups of students interested in following the same subject at the same institution; putting the Massive in Moocs. Question is why educational institutions should participate in these programs.

Well, Kevin Kiley, in Mainstreaming MOOCs, interviews Mark Becker, Georgia State’s president. Kiley states that:

“He sees open, on-line courses as benefiting the university in three ways: by providing content — and therefore potential courses — that the university doesn’t offer, such as languages or highly specialized topics; by meeting demand that exceeds what the university has resources for, such as for some introductory classes; or by supplementing what faculty members do in the classroom. The technology could also allow for more flexible scheduling. Georgia State serves a high number of low-income students who often have to work, as well as nontraditional students who might have other demands on their times”.

So, ODL’s including but not exclusively Moocs, can be used to involve non-traditional groups in education (low-income, working). It can make education more efficient by providing education at lower costs and similar or higher quality and -assuming that more institutions participate- broaden the choices for students by collaborating in ODL, accepting each other courses and credits. However, openness may be taken equivalent to free, but it will still demand a lot of effort (and costs) to develop good quality ODL.

Another interesting feature is that open distance education either on paper or through the Internet is available for more than a quarter of a century. The correspondence education goes back to the 1800’s, the open universities were developed in the second part of the last century.

Open educational resources as a concept emerged in the 1990’s, the first projects were about the same time. Yet, the discussion on electronic and open learning as a disruptive mechanism to education is only started with the emergency of the first Moocs and their hosting companies as Edx an Coursera. From a business economics perspective, it is interesting to know if this has to do with the reputation of the providers, the acceptance of social media and openness or has their popularity to do with their commercial potential which is perceived but not yet realized?

On another note, I don’t think that Moocs are a true disruptive innovation to education as some argue; but that’s for another blog.

The Evolution of Distance Learning to the Digital Age