MIT-Harvard edX disruptive business model
Higher education in the US has reached a breakpoint, where underlying and conflicting trends force an abrupt and often unexpected change in how a market works. The conflicting trends for education are that families’ and governments’ ability to pay for rising college costs has fallen at a time when individuals, states and our nation need higher education more than ever.
Typically, when products become more expensive, consumers buy less. But the demand for college education continues to grow as wages for lesser degrees largely erode. So, what will give?
When I was an MIT economics doctoral student, we learned that services like education, healthcare and government would increasingly represent a higher share of GDP because they would never achieve the efficiencies observed in manufacturing and agriculture. One teacher even referred to this expected outcome as the “Europeanization of the US economy.”
But today’s MIT faculty would disagree. They are shifting the efficiency equation, exploiting the Internet and its ability to scale higher education by partnering with Harvard to create an on-line academy, edX. Introducing edX, outgoing MIT President Susan Kockfield wisely commented, “You can choose this era as one of threatening change and unsettling volatility or you can see it as a moment charged with the most exciting possibilities presented to educators in our lifetimes with the possibility of better understanding of how we learn and sharing the transformative power of education far beyond the bounds of any single campus.”
MIT’s foray into on-line learning started with MIT Open Coursework in 2001, a platform for professors to upload content and supplemental material. It gave rise to an MIT culture of blending classroom and on-line learning. From there, MIT started MITx, an open platform that allowed outsiders to access MIT on-line courses. Its first course offering, Circuits, attracted 120,000 registered students, a number larger than the entire MIT alumni base. This self-paced learning platform features video-content, embedded quizzes, immediate feedback, student-ranked questions and answers and on-line laboratories.
edX, the next evolution, backed by $30M from both Harvard and MIT, utilizes the MITx platform. The partnership makes sense as both institutions have different areas of academic excellence. Also, the brand combination will create a powerful marketplace story, important as other top-notch schools and brilliant solo professors also disrupt higher education. (E.g., Andrew Ng, a computer science professor from Stanford, started the for-profit company Cousera and taught 100,000 students last year about machine learning.) The edX platform will be open, enabling other universities to utilize the technology platform and add their on-line courses to the MIT and Harvard offering.
Neither institution sees edX as a replacement for residential education, but rather as a complement. But will the job market agree?
Today, students must “show what they can do” through internships, etc. to land good jobs. If a non-residential student passes all the edX software courses and can demonstrate her programming excellence to Google, will she need a college degree to get hired? My bet is that edX and its peers will accelerate separation of the credentialing role of college from the educational experience role.
There are many reasons to celebrate expanded access to top-notch education through on-line business models. First, they’ll drive out the low-quality providers in the industry, especially the for-profit educational institutions that offer very weak courses with very poor financial returns for students. These institutions exist more to generate Pell grant revenue than career advancement for students.
Second, brilliant professors will be better able to monetize their unique skills, drawing more top-notch talent into the Academy.
Third, non-elite colleges across the US will be able to offer top-notch content from the best universities, supplemented with hands-on application work and classroom discussion. We’ll improve the value of education for all.
Fourth, on-line education can open university education to the entire developing world and not just its elite families.
Fifth, with millions of students taking these classes, databases and experiments will help researchers learn more about how students best learn and retain and apply knowledge.
Finally, all high schools and not just those in upper-income school districts will be able to offer courses for college credit.
Like all disruptions, some people will suffer. Many academics should reinvent themselves as learning coaches, using content from the masters, to avoid suffering. But all in all, on-line higher education brought to you by the best academic lecturers in the US is something we should all cheer about.
If this is higher education disruption, bring on healthcare disruption!